Pier 1 Imports Fires Its CFO Over $19.3-Million Fund Loss
The chief financial officer of Pier 1 Imports was fired Friday in the wake of bad unauthorized investments that cost the specialty retailer $19.3 million.
Robert G. Herndon, 61, had been with the company for a decade and was put on leave while an outside financial advisor investigated the trading.
A message left on Herndon’s home answering machine was not immediately returned.
The Fort Worth-based company had announced Dec. 26 that it would take a pretax loss because of “inappropriate” trading in a discretionary account by a firm hired to manage the company’s excess cash and short-term investments.
Shortly after the company’s disclosure, a Beverly Hills-based advisory firm run by financial consultant Jay Goldinger acknowledged it was the advisor. Goldinger shut down the firm, Capital Insight, a few days later.
According to a report made to the board of directors Friday, no outside member of the board knew of the company’s relationship with Goldinger or Capital Insight or that the trading strategy had not been authorized.
The board also directed an independent management firm to make a thorough review of the company’s control policies, treasury and finances.
An attempt to recoup the lost funds through the courts also is being considered.
“The loss of the funds invested with Goldinger remains a bitter pill for the company to swallow and is an unfortunate blemish on our company record,” said Clark A. Johnson, chairman and chief executive. “The company’s going to take all appropriate action to recover its money.”
Pier 1 Imports shares closed down 78 cents at $12.953 on the New York Stock Exchange.The company sells decorative home furnishings and related items in 691 stores in 47 states, Puerto Rico, Canada, Britain and Mexico.
