WASHINGTON (Reuters) - Mexico-based home builder Desarrolladora Homex SAB de CV (HOMEX.MX) has agreed to settle charges it reported fake sales to boost revenues in what U.S. authorities said on Friday was a $3.3 billion accounting fraud.
The U.S. Securities and Exchange Commission said in a statement that it used satellite imagery to show that Homex, one of Mexico’s largest homebuilders at the time, “had not even broken ground on many of the homes for which it reported revenues” over a three-year period.
Homex agreed to the settlement, which must still win court approval, without admitting or denying the charges, the SEC said.
“The company will abide by the SEC resolution and continue to collaborate with the Commission and will provide any information requested by the authority relating to third parties,” Homex said in a statement.
Shares of Homex have been suspended until March 17, the SEC said separately, citing “a lack of adequate and accurate information” in the company’s annual reports. On Thursday, its shares closed down at less than 1 peso per share.
Homex said that for a period of five years it will not participate in the U.S. stock market and will not publish any financial or business information in English on its website or any other electronic information distribution service.
Mexico’s National Bank and Securities Commission said it worked with the SEC during its investigation and slapped a 12 million peso ($613,977) fine on Homex in October 2015 for improperly preparing its financial statements.
The settlement follows the SEC probe announced last year against Homex, which filed for bankruptcy in 2014.
The homebuilder had been saddled with mounting debts and struggled with a shift in government policy over subsidies. In 2015, the company emerged from bankruptcy and top officers were placed on leave.
“Homex has since undertaken significant remedial efforts and cooperated with the SEC’s investigation,” the agency said on Friday, adding that its settlement reflected the cooperation of the new company leadership.
Reporting by Susan Heavey in Washington and Alexander Alper and Anthony Esposito in Mexico City; editing by Dan Grebler and Cynthia Osterman