Ex-Dynegy execs settle fraud case

The U.S. Securities and Exchange Commission on Monday said that three former Dynegy Inc. executives settled charges for their role in a $300-million accounting fraud that involved disguising a loan as operating cash flow.

Former Chief Financial Officer Robert Doty will pay more than $375,000 to settle the SEC charge, the agency said in a statement.

Gene Foster, the energy company’s former vice president of taxation, and Helen Sharkey, former manager of accounting-deal structure, also settled charges that they were involved in creating and implementing the scheme, known as Project Alpha.

Dynegy’s stock lost more than half its value on April 26, 2002, the day after the Houston-based company disclosed an SEC investigation into the project.

The company later agreed to pay $465 million to settle a shareholder lawsuit, paid a $3-million penalty to the SEC and had to restate its 2001 earnings downward.

Foster and Sharkey agreed not to appear or practice again before the SEC as accountants but are not paying any fines. In the settlements, none of the three former executives admitted or denied wrongdoing.

Shares of Dynegy gained 20 cents Monday to close at $9.44.