one monkey of their back
Signal Tech settles SEC probe, ex-officers sued
By John Poirier
WASHINGTON (Reuters) - Signal Technology Corp. , a provider of wireless technology products, has settled allegations of accounting fraud during the 1990s, U.S. regulators said Wednesday.
The Danvers, Massachusetts-based company, which agreed to the settlement without admitting or denying any wrongdoing, was not fined, the U.S. Securities and Exchange Commission said.
Simultaneously the SEC said it sued seven former officers, accusing them of inflating the company's earnings by more than $9 million from 1996 to 1998.
Former Chief Executive and Chairman Dale Peterson is among the defendants named in a 34-page civil complaint the SEC filed in federal court late Tuesday in San Jose, California.
The SEC alleged that the company's Florida-based Keltec unit, which experienced severe financial difficulties due to cost overruns on its defense contracts, failed to record known losses on major contracts and premature revenue recognition.
The alleged improper accounting practices also included failed write-offs of worthless inventory, the SEC said.
The SEC said it found that in 1996 and 1997 and for the first quarter of 1998, Signal Tech overstated its revenues and net income in annual and periodic filings made with the SEC.
But SEC enforcement attorney Celia Moore said the SEC did not feel it was appropriate to fine the company because it is now led by new management, which found the unrecorded losses.
Signal Tech's board opened an examination into the company's books, which were eventually restated for fiscal years 1996 and 1997, the SEC said.
Shares of Signal, which was formerly based in Sunnyvale, California, were unchanged at $7.95 on the Nasdaq. They have ranged from $3.52 to $11.70 in the past 52 weeks.
Peterson, who was CEO from 1994 to mid-1998, and former Chief Financial Officer Russell Kinsch were accused of knowingly directing and approving the accounting lapses and signing the company's books. They allegedly misled the company's auditors, the SEC added.
The SEC complaint also named former President James Walsh, vice presidents Richard Nabozny and Michael Smith, Keltec president Wayne Armstrong and Keltec controller Charles Balentine for their alleged roles.
Attorneys representing the defendants and Smith, who is not represented by any attorney, could not immediately be reached for comment.
The SEC said it is seeking fines from the defendants and to bar Peterson, Kinsch, Walsh, Nabozny and Smith from acting as officers or directors of any pubic company. |
