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March 3, 2017

Posted  April 5, 2017

Mexico-based homebuilding company Desarrolladora Homex S.A.B. de C.V. has agreed to settle charges that it reported fake sales of more than 100,000 homes to boost its claimed revenues by more than 355% (about $3.3 billion) over a three year period.  The SEC used satellite imagery to help uncover the accounting scheme and illustrate its allegation that Homex had not even broker ground on many of the homes for which it reported revenue.  According to the SEC’s complaint, Homex filed for the Mexican equivalent of bankruptcy protection in April 2014 and emerged in October 2015 under new equity ownership.  The SEC separately issued a trading suspension in the securities of Homex.  As part of the settlement, Homex has agreed to be prohibited from offering securities in the U.S. markets for at least five years. SEC

Tagged in: Accounting Fraud, Securities Fraud,