McAfee stung with $50m fraud penalty
SEC reaches settlement with anti-virus vendor over allegations of inflated revenues
The US Securities and Exchange Commission has hit IT security software vendor
McAfee with a $50m (£28.5m) penalty after the company settled over charges of
accounting fraud.
The SEC had alleged that from the second quarter of 1998 through 2000, McAfee
-formerly Network Associates – misled investors by overstating revenue and
earnings by hundreds of millions of dollars. During this period McAfee was said
to have inflated cumulative net revenues by $622m, with a revenue overstatement
of $562m in 1998 alone.
McAfee agreed to an order the sees the company pay a $50m civil penalty
without admitting or denying the allegations. The SEC will seek to distribute
the money to harmed investors.
Simultaneously, the SEC also announced a further settlement with another
software company, Applix. However, in this case the settlement does not involve
a financial penalty.
