WASHINGTON- The U.S. Securities and Exchange Commission (SEC) on Monday charged dialysis provider American Renal Associates Holdings Inc and three former senior executives with engaging in a revenue manipulation scheme.

ARA improperly used certain revenue adjustments called "topsides" to boost its financial performance from 2017 through at least November 2018, the SEC alleged. In September 2019, ARA restated its financials, showing the company had overstated its net income by more than 30% for 2017 and more than 200% for the first three quarters of 2018.

Two of ARA's former chief financial officers, Jonathan Wilcox and Jason Boucher, and its former controller Karen Smith were also charged for their misconduct relating to the scheme, SEC said. The defendants misled their auditors in an attempt to prevent discovery of the improper accounting practices, the SEC said.

The SEC charged the defendants with violations of antifraud, accounting controls and books and records provisions of U.S. securities laws, according to the complaint filed in federal court in New York.

ARA, which did not admit or deny the findings, agreed to settle the lawsuit by paying a $2 million civil penalty. A company spokesperson said ARA is "committed to strong internal financial controls and compliance efforts".

The SEC said it is seeking civil penalties and industry bars for all three executives and is trying to claw back incentive-based compensation from the former chief financial officers. Reuters previously reported  the agency was looking to utilize this infrequently-used power.

Matthew Kane, an attorney for Wilcox, said in an email: "We disagree with the allegations set forth in the SEC's complaint and we look forward to vigorously litigating these issues."

Attorneys for the two other executives did not respond immediately to requests for comment.

(Additional Reporting Jonathan Stempel in New York Reporting by Chris Prentice; Editing by Aurora Ellis) ((christine.prentice@thomsonreuters.com; +1 (202) 843-6464;))