U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 20104 / May 3, 2007
Auditing and Accounting Enforcement Release No. 2606 / May 3, 2007
Securities and Exhange Commission v. Gary V. Morris, Civil Action No. 4:04-CV-3096 (S.D. Tex.)
Claims Dismissed Against Former Halliburton Officer for Failure to Disclose a 1998 Change in Accounting Practice
The Securities and Exchange Commission announced that the U.S. District Court in Houston has dismissed the Commission's claims against Gary V. Morris, Halliburton's former chief financial officer. The district court's order came at the request of the Commission to dismiss the claims "in the interests of justice." The Commission's case, filed in 2004, concerned Halliburton's failure to disclose a 1998 change to its accounting practice. As a result of that undisclosed change, the Commission alleged that Halliburton's public statements regarding its income in 1998 and 1999 were materially misleading.
In 2004, Halliburton and its former controller, Robert C. Muchmore, Jr., settled the Commission's enforcement actions by consenting to a Commission order to cease and desist from committing or causing future securities law violations. Additionally, Halliburton and Muchmore paid penalties of $7.5 million and $50,000 respectively, in a related civil action. Halliburton's penalty for the disclosure failure reflected lapses in the company's conduct during the course of the Commission investigation, which commenced in mid-2002.