Feeds

L&H subpoeanead by SEC

Accounts sous investigatione

  • alert
  • submit to reddit

Choosing a cloud hosting partner with confidence

Speech and language specialist Lernout & Hauspie has been subpoeanaed by the SEC because the agency wishes to investigate its previous years' accounts.

Such an action is more serious than a previous action by the SEC concerning how research in progress was accounted for - a move that the SEC also made against a considerable number of other US companies.

This time the investigation is centred on what are called related party transactions between entities in which the co-chairmen Jo Lernout and Pol Hauspie do or may have an interest, and L&H the company. One example is the enigma of the Brussels Translations Group that was acquired by L&H after it completed a contract to improve Internet machine translation for L&H. It is unusual that the $62 million of goodwill shown on L&H's books is being amortised over 15 years, in view of the speed of development of the technology.

Messrs L&H are adamant that there was no L&H money in the company, and the original shareholders - as the Belgisch Staatsblad of 28 March 1997 makes clear - were Van Deun Consult of Arendonk, Belgium and
Cevennes SA, a company registered in Luxembourg.

A question about the accuracy of L&H's claims for its substantial claims about its Korean sales was raised in a Wall Street Journal article last month.

The worldwide mid-year audit that L&H called for from it auditor KPMG after the allegations is still in progress. L&H said in a statement that it was cooperating fully with the SEC investigation. In addition, L&H's audit committee has initiated an investigation and retained counsel, although whether this is a defensive move or whether defamation actions are contemplated is not known. The criterion for judgement will be whether shareholders have suffered as a result of any relate party transactions. Meanwhile, L&H says it is business as usual.

Marc Cohodes of Rocker Partners, a prominent shorter of L&H stock, is jubilant at the SEC news, claiming it was "game/set/match" and "a total scam here". Last night, L&H's share price closed at $15.125, down $6.125 on the day. ®

Related Stories

L&H returns fire as the class actions roll in
Urbane Bastiaens heads for L&H ambassador role
After Gaston, new L&H CEO focuses on nuts and bolts
Bastiaens bails from L&H
The Reg visits Korea to assess L&H's sales
L&H goes on Korean offensive against WSJ
The trouble with LearnHowTospeak Korean

Providing a secure and efficient Helpdesk

More from The Register

next story
Preview redux: Microsoft ships new Windows 10 build with 7,000 changes
Latest bleeding-edge bits borrow Action Center from Windows Phone
Google opens Inbox – email for people too thick to handle email
Print this article out and give it to someone tech-y if you get stuck
Microsoft promises Windows 10 will mean two-factor auth for all
Sneak peek at security features Redmond's baking into new OS
UNIX greybeards threaten Debian fork over systemd plan
'Veteran Unix Admins' fear desktop emphasis is betraying open source
Entity Framework goes 'code first' as Microsoft pulls visual design tool
Visual Studio database diagramming's out the window
Google+ goes TITSUP. But WHO knew? How long? Anyone ... Hello ...
Wobbly Gmail, Contacts, Calendar on the other hand ...
DEATH by PowerPoint: Microsoft warns of 0-day attack hidden in slides
Might put out patch in update, might chuck it out sooner
Redmond top man Satya Nadella: 'Microsoft LOVES Linux'
Open-source 'love' fairly runneth over at cloud event
prev story

Whitepapers

Choosing cloud Backup services
Demystify how you can address your data protection needs in your small- to medium-sized business and select the best online backup service to meet your needs.
Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Storage capacity and performance optimization at Mizuno USA
Mizuno USA turn to Tegile storage technology to solve both their SAN and backup issues.