The Securities and Exchange Commission has filed financial fraud cases against Logitech International and Ener1. Logitech, a technology manufacturer, will pay $7.5M to resolve the charges. Its former controller, Michael Doktorczyk and ex-accounting director, Sherallyn Bolles, will pay $50K and $25K penalties, respectively.<\/p>\n
The SEC said that the two companies and their former executives committed accounting-related violations that caused investors to not have an accurate portrayal of what was going on financially at Logitech and Ener1.<\/p>\n
According to the regulator, Logitech fraudulently inflated its financial results for the 2011fiscal year to satisfy earnings guidance, as well as committed other accounting violations over five years. The SEC also filed charges against the technology company\u2019s former CFO, Erik Bardman, and ex-controller Jennifer Wolf, accusing them of purposely minimizing the write-down of millions of dollars of extra component parts for a product that had inventory in excess.<\/p>\n
For the company\u2019s financial statements, Bardman and Wolf are accused of falsely assuming that the company would construct the components into complete products even though they knew of contrary events and facts. Also, ex-CEO Gerald Quindlen, who is not accused of misconduct, gave back $194,487 in stock sale profits and incentive-based compensation that was given to him during a time when alleged accounting violations were taking place.<\/p>\n
In the Ener1 financial fraud case, the battery manufacturer consented to pay penalties for its materially overstated assets and revenues for year-end 2010, as well as overstated assets from 2011\u2019s first quarter. The SEC said that the financial misstatements were a result of management\u2019s failure to impair certain receivables and investments. Ex-CFO Jeffrey A. Seidel, ex-CEO Charles Gassenheimer, and ex-chief accounting officer Robert Kamische consented to pay $50K, $100K, and $30K, respectively.<\/p>\n
The SEC said that Robert Hesselgesser, who was the engagement partner of Price Waterhouse Coopers LLP\u2019s audit of Ener1\u2019s financial statements of 2010, violated auditing standards when he did not conduct the proper procedures to back his audit findings that Ener1\u2019s management had properly accounted for revenues and assets.<\/p>\n