Wells Notices for Former Delphi Execs

A number of executives were forced to resign last year in the wake of an SEC probe, including the CFO, the chief accountant and controller, and the treasurer.

The Securities and Exchange Commission has sent Wells notices to at least seven former executives of Delphi, which is being investigated for possible accounting fraud, according to the Detroit News, which cited two lawyers familiar with the investigation.

A number of executives were forced to resign last year in the wake of the SEC probe, including vice chairman and chief financial officer Alan Dawes; chief accountant and controller Paul Free; treasurer Pam Geller; and vice president of treasury, mergers and acquisitions John Blahnik. At least some of these individuals are believed to have received Wells notices, the News reported; lawyers for all four declined to comment.

Jonathan Scott, the lead SEC lawyer on the case, also declined comment to the newspaper; Delphi assistant general counsel Joseph Papelian said only, “We continue to cooperate with the SEC.”

Under SEC procedures, a Wells notice indicates that the staff has made a preliminary decision to recommend that the commission bring a civil action; recipients have the opportunity to respond to the SEC staff before a formal recommendation is finalized.

The Department of Justice is also investigating whether Delphi officials altered financial results to meet internal earnings goals and hide the company’s deteriorating financial condition, according to the newspaper.

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