Bankrate Inc.'s Successor in Interest Agrees to Pay $28 Million to Resolve Securities and Accounting

https://www.justice.gov/opa/pr/bankrate-inc-s-successor-interest-agrees-pay-28-million-resolve-securities-and-accounting

Department of Justice
Office of Public Affairs

FOR IMMEDIATE RELEASE
Wednesday, March 6, 2019

Bankrate Inc.’s Successor in Interest Agrees to Pay $28 Million to Resolve Securities and Accounting Fraud Charges

Baton Holdings LLC, as the successor in interest to Bankrate Inc., a financial services and marketing company (Bankrate), has entered into a nonprosecution agreement and agreed to pay $28 million in combined monetary penalties and restitution to resolve the government’s investigation into a complex accounting and securities fraud scheme carried out by former executives of Bankrate.
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Bankrate admitted in the resolution documents that former executives engaged in a complex scheme to artificially inflate Bankrate’s earnings through so-called “cookie jar” or “cushion” accounting, whereby millions of dollars in unsupported expense accruals were purposefully left on Bankrate’s books and then selectively reversed in later quarters to boost earnings. In addition, Bankrate admitted that former executives misrepresented certain company expenses as “deal costs” in order to artificially inflate publicly reported adjusted earnings metrics, and also made materially false statements to Bankrate’s independent auditors to conceal the improper accounting entries. As a result of the scheme, Bankrate admitted that the fraudulent conduct caused Bankrate’s shareholders to suffer at least $25 million in losses. According to the resolution documents, Red Ventures Holdco LP, which acquired Bankrate in November 2017 after the securities and accounting fraud scheme took place, also agreed to certain terms and obligations under the agreement but had no involvement in the underlying criminal conduct.
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Potential victims of the scheme can find information about their rights under relevant law at the following website: https://www.justice.gov/criminal-vns/case/edward-j-dimaria.