Former Gateway execs deny SEC fraud charges
Expect to be exonerated
Three senior former Gateway executives charged with fraud by the US Securities and Exchange Commission last week have denied any wrongdoing.
Last Thursday, the SEC filed a civil action law suit against Gateway's former chief financial officer John Todd as well as former chief exec Jeffrey Weitzen and controller Robert Manza.
The three are charged with masterminding a scheme to illegally manipulate company earnings to meet analyst expectations three years ago and for lying about the state of Gateway's PC business at the time. The SEC wants the courts to fine the trio and pass an order preventing them from becoming company directors ever again.
But Todd this week hit back with a statement through his lawyers denying the charges.
"This suit is wrong and should never have been authorised," said attorney Robert Rose of Sheppard, Mullin, Richter & Hampton in a statement on behalf of Todd.
Both Todd and Weitzen say they expect to be exonerated in court, IDG reports.
The three accused executives departed Gateway in early 2001 during a shakeout of its top management ranks. Gateway has since restated its results over the period (Q2 and Q3 2000) over when the alleged fraud took place. Late last year, Gateway settled shareholder litigation related to the alleged misstatement of company earnings.
The SEC last week said it had ended its near three-year investigation into the company’s accounting practices. Gateway has "neither admitted nor denied any wrongdoing" but agreed to the entry of an administrative order prohibiting any future violations of US securities laws (i.e. it's on probation).
After satisfying itself that Gateway has put its house in order, the SEC has agreed not to fine the company. ®