Aon Corp. said the Securities and Exchange Commission’s review of its financial reporting had concluded with only a slight reshuffling of the company’s past results, Thursday’s Wall Street Journal reported.
Last week when the Chicago-based insurance broker released second-quarter earnings, Aon said it had received an SEC comment letter and might have to restate prior-year earnings. The SEC had questioned the company’s accounting treatment of certain investments, business-transformation charges and disputed insurance proceeds that Aon is trying to collect. Aon’s shares fell 30% on the news. Wednesday, Aon’s shares jumped 22% after the company issued its latest statement.
Aon said the SEC advised the company would have to restate its fourth-quarter earnings to record an allowance for potentially uncollectible reinsurance of $90 million related to Sept. 11. Aon had expected to collect on the reinsurance policy after it paid the insurance claims of beneficiaries of its employees who died in the Sept. 11 terrorist attacks. Aon will restate its fourth-quarter results, lowering them by 20 cents a share, while simultaneously adding 20 cents a share to its first-quarter results, as it had previously recorded the allowance in the first quarter of this year. Aon said in its statement that the SEC found Aon doesn’t need to restate its results for any of the other issues the regulator had previously raised.
Patrick Ryan, Aon’s chief executive, said in an interview Wednesday that the SEC’s review was “routine” and that the company had been unfairly punished by stock traders who sell off any company whose name is connected with SEC matters.