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UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION ___________________________________________ : SECURITIES AND EXCHANGE COMMISSION, : : Plaintiff, : : v. : COMPLAINT : GARY V. MORRIS, : : Defendant. : ___________________________________________ : Plaintiff Securities and Exchange Commission (“Commission”) alleges as follows: SUMMARY 1. Gary V. Morris, while serving as the Chief Financial Officer (“CFO”) of

Halliburton Company (“Halliburton” or “the company”), was responsible for ensuring the accuracy and completeness of the financial information Halliburton disclosed to the public. During 1998 and 1999, Morris failed to discharge that responsibility. Along with others, Morris was responsible for Halliburton’s disseminating materially misleading financial information in its public filings with the Commission, in earning releases and in analyst teleconferences. 2. In the second quarter of 1998, Halliburton changed its accounting principles

and practices, as well as its accounting estimates (hereinafter, collectively, “accounting change”) to recognize as income claims – arising from cost overruns – that Halliburton had not resolved with its customers. Previously, the company recorded income from a claim only after the claim was resolved with the customer. Since at least 1993, Halliburton had set forth this approach to recording income from claims in its periodic filings with the

Commission. The departure from Halliburton’s prior conservative claims accounting resulted in enhanced income for Halliburton. For example, by including unresolved claims as income in its financial statements, Halliburton’s audited pre-tax income for 1998 was 46% greater than it would otherwise have been without the claims. 3. Over six reporting periods, spanning approximately 18 months between

1998 and 2000, Halliburton failed to disclose the accounting change, or its impact on Halliburton’s income. In the absence of any disclosure, the investing...