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  3. on february 28, 2011, the sec charged dhbindustrie

On February 28, 2011, the SEC charged DHBIndustries Inc. (DHB), a major supplier of body...

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Accounting

On February 28, 2011, the SEC charged DHBIndustries Inc. (DHB), a major supplier of body armour to the U.S.military and law enforcement agencies, with engaging in a massive accounting fraud. The SEC alsocharged three of the companys former outside directors and audit committee members for their complicity in the fraud. The SEC complaint also alleged thatthe directors actions allowed DHBs David Brooks, Dawn Schlegeland Sandra Hatfieldto divert corporate funds to a controlled entityfor personal gain.Hatfield and Brooks were convicted in September 2010 on various chargesarising out of a $200 million fraud.

Using fraud theory, analyse and explain the fraud committed by David Brooks.

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