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Technology Stocks : Corel Corp. -- Ignore unavailable to you. Want to Upgrade?

To: Lola who wrote (7580)	10/15/1999 7:22:00 AM
From: A. Reader	Respond to of 9798

OSC charge... ...A hearing, which is a civil proceeding conducted within the confines of the OSC, is scheduled for Oct. 28. Staff at the regulator are expected to argue that the trading ban on Mr. Cowpland and his personal holding company should be extended indefinitely because the "likelihood of convictions are factors which could affect the price of Corel shares." ....Critical to the OSC's investigation was determining what information or knowledge Mr. Cowpland had about his company's third-quarter results at the time he sold almost a third of his 20% stake in Corel. In its statement of allegations, the OSC claimed that Mr. Cowpland knew that Corel would fall short of its forecasted sales for the third quarter of 1997 by "a significant margin." According to the regulator, Mr. Cowpland learned that rather than posting sales of $94-million (US) in the third quarter of 1997, he was told on Aug. 6 that the best Corel could achieve would be $63-million (US) in sales. That information was not disclosed to public investors. As well, the OSC says Mr. Cowpland then instructed his sales staff on Aug. 7 to place "as much inventory as possible with Corel's largest distributor to make up the shortfall between actual sales and the sales forecast for the quarter." Many software companies sell their programs to vendors on consignment, which means it's not actually a sale to be recorded in the accounting records until the vendor actually sells the product to a third party and money changes hands. If the vendor can't sell the products, they they go back to the software company. *It was while Corel staff negotiated a $70-million (US) consignment deal with a major distributor to try to make up the $31-million shortfall in sales, that Mr. Cowpland sold his 2.4 million shares.* However on Sept. 9, three weeks after Mr. Cowpland sold his stock, Corel "determined that a substantial portion of the revenue for the $70-million sale could not be recognized for the quarter." The next day, the company announced it would post a loss rather than a profit, which had been expected by analysts and investors. nationalpost.com