SunEdison's Shares Surge After Investigative Committee Determines No Material Misstatements Or Evidence Of Fraud

Sunedison Inc SUNE reported on Thursday the completion of an investigation conducted by the Board of Director's audit committee and independent directors. The investigation began in late 2015 and focused on the accuracy of the company's anticipated financial position based on allegations made by former executives and current and former employees. The committee concluded that it found no identified material misstatements in the company's historical financial statements and no substantial evidence to support a finding of fraud or willful misconduct of management. Shares of SunEdison surged higher by more than 45 percent following the release of the report. However, the investigation's findings contrasted with management's "overly optimistic culture and its tone at the top." Specifically, management's cash forecasting efforts lacked sufficient controls and processes, certain assumptions made by the board and management were overly optimistic, management has not responded appropriately when targets were not met, and the company lacked sufficient controls to manage its cash flow. The report added that the board's independent directors will require the implementation of improved cash forecasting systems and the need to fully communicate any changes in outlook directly with the board. The independent directors also require management to provide an improved transparency system in regards to cash management practices and to ensure assumptions and estimates are made with a reasonable basis.