DETROIT -- Former Delphi CEO J.T. Battenberg must pay $215,000 for violating U.S. securities laws, a federal judge ruled last week.
U.S. District Judge Avern Cohn determined that Battenberg received $198,500 in extra bonus money because Delphi inappropriately booked a payment it made to General Motors in 2000. The misrepresentation resulted in Delphi artificially inflating its bottom line, which boosted Battenberg's bonus pay.
Cohn ordered Battenberg, 68, to pay back the ill-gotten bonus money, plus $16,500 in fines. Cohn's judgment against Battenberg did not bar the former executive from being a member of corporate boards, which sometimes is leveled as a penalty for SEC violations.
The judge's ruling marks the end of a 5 1/2-year saga in which Battenberg, who once led the world's largest auto supplier, fought to clear his name as several other former Delphi officials settled allegations against them.
"J.T. is very glad it's over," Battenberg's lawyer, William Jeffress, told Automotive News last week. In an e-mail, Battenberg declined to comment.
In 2006, the U.S. Securities and Exchange Commission sued Battenberg and 12 other former Delphi employees and people who did business with the parts supplier. Most of them agreed to pay fines to settle allegations ranging from fraud to improper bookkeeping.
The SEC's civil complaint against Battenberg centered on a $237 million payment that Delphi made to GM in September 2000. The SEC claimed that the money was entirely to compensate GM for warranty claims on faulty parts that Delphi supplied while it was a division of GM, before Delphi's 1999 spinoff.
But Delphi officials, with Battenberg's knowledge, improperly booked most of the payment as an adjustment to pension expenses, spread over many years, thus inflating its earnings, SEC lawyers alleged.
At the trial, Battenberg argued that he had struck an agreement with GM executives that the $237 million was mostly to compensate GM for pension and other employee-benefit costs that GM got unexpectedly as a result of the spinoff. He also said he wasn't involved in the ways Delphi accounted for the payment.
Battenberg was partially vindicated in January, when a jury cleared him of two fraud charges. But the jury found the former CEO responsible for three claims of improper bookkeeping and misrepresentations to accountants, leading to the fines.
"I'm not bitter," Battenberg told Automotive News after the jury's verdict. "I'm just disappointed that the process allows this to happen. It takes a lot out of you and your family and your ability to work."