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Toy maker Mattel agrees to pay $3.5 million to settle SEC charges



(Reuters) — Toy maker Mattel Inc. has agreed to pay $3.5 million to settle U.S. Securities and Exchange Commission charges of financial improprieties in 2017, the agency said on Friday.

El Segundo, Calif.-based Mattel, which makes toys for Barbie and Fisher-Price, misstated its losses in the third and fourth quarters of 2017 because of tax reporting errors, the SEC said. The problem went uncorrected until November 2019, and the lack of internal control over financial reporting related to the error remained unknown. The company’s CEO and the audit committee were not told about the error.

A spokesperson for Mattel, who did not acknowledge or deny the SEC’s findings, said the company is pleased to have the matter behind it.

The SEC said it is separately opening legal proceedings against a former audit partner at PricewaterhouseCoopers LLP to determine whether he engaged in professional misconduct and violated auditor independence rules.

The auditor failed to verify that the $1

09 million uncorrected error was documented, even though he knew about it, the SEC alleged. He further failed to maintain the auditor’s independence by advising Mattel’s then-CFO on who should be selected for a senior position in the company.

A PWC spokesperson declined to comment.

The matter will be scheduled for a public hearing before the commission, the SEC said.


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