Granite Construction Clears Legal Hurdle and Secures Major California Contract

Granite Construction US3873281071

A significant legal overhang for infrastructure firm Granite Construction has been resolved. The U.S. Securities and Exchange Commission (SEC) has closed its fraud case against a former company executive, drawing a line under accounting issues from several years ago. In a simultaneous operational boost, the company has been awarded a multimillion-dollar state contract.

Granite Construction's project portfolio has expanded with a new award from the California Department of Transportation (Caltrans). The contract, valued at approximately $20 million, involves rehabilitating a 13-mile segment of Highway 101 near King City.

Fully funded by federal sources, this project enhances the company's backlog in its transportation division. Granite plans to source asphalt materials from its own facility in Coalinga for the work. Construction is scheduled to commence in the latter part of the first quarter of 2026, with completion targeted for the first quarter of 2027.

This development comes as the company's shares closed at $120.74 on Friday. Granite Construction currently commands a market valuation of around $5.27 billion.

SEC Investigation Concluded

In a pivotal move last Friday, the SEC dismissed all civil fraud allegations against Dale Swanberg, the former head of Granite's large project division. The allegations were tied to accounting adjustments made for the periods spanning 2017 to 2019.

The defense successfully demonstrated that cost projections for the twelve major projects in question had received approval from both internal management and external auditors at the time. The case was dismissed "with prejudice," legally preventing the allegations from being revived. This action concludes a prolonged judicial matter that had periodically weighed on investor confidence.

Financial Context and Forward Focus

The resolution of the historical accounting questions removes a key obstacle for the company's market perception. Granite's most recent quarterly report showed revenue of $1.43 billion and earnings per share of $2.70.

Institutional investor activity presented a mixed view in the third quarter. AlphaQuest LLC increased its stake by roughly 41.5%, while Great Lakes Advisors LLC reduced its position by approximately 38.3% during the same period.

With the legal chapter closed, management's operational focus now shifts to executing its project pipeline for 2026, including the imminent start of work on Highway 101.