, the SEC has charged five companies with earnings management based on its EPS Initiative. The first two charges were announced on September 28, 2020, when the SEC charged Interface, Inc. and Fulton Financial Corporation. In 2021, the SEC charged Healthcare Services Group, Inc. The fourth charge was in 2022 against Rollins Inc. Finally, in 2023, the SEC charged Gentex Corporation as well. All five of these companies had manipulated their earnings so that the reported earnings per share (EPS) met the markets expectations. Interface, Inc. is a flooring specialist that sells several flooring products. The SEC charged Interface with manipulating accruals for management bonuses, consulting expenses, and stock-based compensation. The SEC (2020b) stated that the entries made by Interface did not comply with generally accepted accounting principles and artificially inflated Interfaces income and EPS, which resulted in Interface meeting or beating consensus estimates for EPS and showing earnings growth. Interface and executives agreed to refrain from any future violations. In addition, Interface was fined $5 million while the executives were fined $115,000. The executives are suspended from practicing as accountants before the Commission. However, they are allowed to apply for reinstatement. Fulton Financial Corporation is a regional, financial services holding company that provides consumer and commercial banking products and services in five states in the mid-Atlantic area. Fulton was charged with manipulating its earnings through the process and amounts used in the valuation account for its mortgage servicing rights (SEC 2020a). The SEC (2020a) commented that Fultons actions created the appearance of consistent earnings trends across reporting periods and deprived investors of the ability to understand managements involvement in fair value calculations. Fulton agreed to refrain from any future violations and paid $1.5 million in penalties.

do you think these charges fines, and penalties assessed on the guilty parties by the SEC were adequate? why,why not?