United Parcel Service Inc., the Atlanta-based global shipping and logistics company traded on NYSE as UPS, has had a $45 million Fair Fund activated by the Securities and Exchange Commission, with Epiq appointed as fund administrator, following UPS’s settlement in November 2024 of charges that it materially misrepresented its earnings by failing to properly impair the goodwill associated with its UPS Freight business unit in 2019 and 2020. The May 22, 2026 order appointing Epiq sets a bond amount of $45 million, matching the full settlement amount, and authorizes payment of Epiq’s fees and expenses from the Fair Fund.
The $45 million will be distributed to harmed investors under a plan to be approved by the court. The underlying accounting failure, which the SEC described as repeatedly ignoring UPS’s own well-founded sale price estimates in favor of an outside consultant’s unreliable valuation, caused UPS to overstate goodwill on its balance sheet by nearly $500 million across two fiscal years, materially inflating its reported earnings, net income, and shareowners’ equity before the Freight unit was sold to TFI International for $800 million in April 2021.
UPS Knew Freight Was Worth $350M to $650M but Kept It on the Books at $1.4B for Two Years
In 2019, UPS’s own corporate strategy group analyzed whether to sell UPS Freight, its less-than-truckload shipping division, and concluded the business would likely sell for only $350 million to $650 million. UPS carried Freight on its balance sheet at a carrying value of approximately $1.4 billion, including approximately $500 million in goodwill. Under GAAP, fair value is defined as the price a company would receive to sell an asset in an orderly transaction between market participants. UPS’s own internal estimate made clear that Freight’s goodwill was substantially impaired. Recording that impairment would have required UPS to write down its books by nearly $500 million and materially reduce its reported earnings.
Rather than record the impairment, UPS commissioned an outside valuation consultant to assess Freight’s fair value. According to the SEC’s order, UPS provided the consultant with information insufficient to conduct a proper valuation, resulting in a higher estimate that did not reflect the price UPS would realistically receive to sell the business. UPS used the consultant’s inflated figure, ignored its own internal analysis, and recorded no goodwill impairment for fiscal year 2019. The same pattern repeated in 2020. Had UPS properly recorded the impairment when its own analysis identified it, its fiscal year 2020 income from continuing operations would have been reduced by approximately 6%, net income by approximately 20%, goodwill balances by approximately 13%, and shareowners’ equity by approximately 32%.
UPS Sold Freight to TFI International for $800M in April 2021 After Two Years of Inflated Reporting
UPS ultimately sold UPS Freight to TFI International in April 2021 for $800 million — above the low end of its own $350M-$650M internal estimate but still far below the $1.4 billion carrying value at which UPS had been reporting the business on its balance sheet. At the point of sale, UPS was required to recognize the impairment it had deferred for two years. The SEC’s enforcement action covers the period during which UPS carried the inflated valuation and reported materially overstated earnings to investors who were buying and selling UPS shares without knowing the Freight unit’s goodwill was impaired.
The SEC found violations of Section 17(a)(2) and (3) of the Securities Act and multiple provisions of the Exchange Act including Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B), covering reporting, books and records, internal accounting controls, and disclosure controls. In addition to the $45 million civil penalty, UPS agreed to cease and desist from further violations, adopt training requirements for officers, directors, and certain employees, and retain an independent compliance consultant to review its fair value estimation processes and disclosure obligations. UPS did not admit or deny the findings.
Epiq Is Appointed Fund Administrator with a $45M Bond as the Fair Fund Moves Toward Distribution
The May 22, 2026 SEC order appointing Epiq as fund administrator is the procedural step that moves the $45 million from the Treasury-held Fair Fund account toward actual distribution to harmed investors. Epiq, a global legal services company that regularly administers SEC Fair Funds and class action settlements, will submit invoices for its fees and expenses to the Commission staff for payment from the Fund. The $45 million bond requirement is standard for fund administrators handling distributions of this size and ensures accountability for the assets during the distribution process.
A plan of distribution for the Fund must still be proposed and approved before any payments reach investors. The SEC noted in its February 2025 harmed investor notice that the Fair Fund includes the full $45 million paid by UPS plus any accrued interest. The SEC’s investigation was conducted by Joseph Zambuto Jr. and supervised by Assistant Director Rami Sibay. The order also noted the investigation is continuing as to other parties, meaning additional enforcement actions related to the same conduct may follow.
Conclusion
The UPS Freight case is a straightforward accounting enforcement action: a company had internal analysis showing its business unit was worth far less than its book value, hired a consultant without giving that consultant the information needed for an accurate assessment, and used the resulting inflated figure to avoid recording a nearly $500 million goodwill impairment for two years. Investors who held or traded UPS shares during 2019 and 2020 made decisions based on financial statements that overstated net income by approximately 20% in the year the impairment should have been recorded. The $45 million Fair Fund, now moving toward distribution with Epiq as administrator, will compensate those investors. The SEC’s investigation into other parties in the same conduct is ongoing.
