Gateway computers CFO 'misled investors'
CFO and financial controller of US company Gateway colluded to 'close the gap' in struggling company's figures
A US court has found the former chief financial officer of a computer
manufacturer guilty of fraud, making false statements to accountants and other
securities abuses.
John Todd, the former CFO of Gateway and his former controller, Robert Manza,
were
both
in court facing charges relating to their deliberate inflation of the
company’s 2000 figures.
Manza and Todd inflated revenues through a variety of ‘improper and
extraordinary transactions’ in order to ‘close the gap’ between Wall Street’s
expectations and the company’s actual performance, the FT reported.
While some of the transactions involved millions of dollars, at least one
transaction contributed only a penny per share to the company’s earnings,
according to the
SEC.
‘That penny was the penny that allowed them just to meet Wall Street
expectations,’ said Randall Lee, the SEC’s Pacific regional director.
Lee added that the case showed that ‘even small accounting tricks and
deceptive practices can be fraudulent and even material to investors’.
Further reading:
UPDATE
– US jury: ex-Gateway execs manipulated earnings
Former
Gateway execs liable in fraud case