McAfee and Applix agree SEC settlement terms
Dialling for dollars
McAfee is coughing up $50m and establishing an ethics "hotline" for customers and partners to report suspicious behavior by the company, following a US Securities and Exchange Commission (SEC) investigation.
The SEC investigation, begun in 2002, accused the security vendor of inflating net revenue by $622m between 1998 and 2000.
Under the settlement McAfee has promised not to violate future provisions of the US securities laws, without admitting or denying any wrongdoing.
Securities regulators have also settled a separate action against Applix, which began in 2003. The business performance management and business intelligence (BI) vendor has, also without admitting or denying the SEC's findings, agreed to comply with future federal securities laws and appoint a consultant who will assist in reviewing Applix's compliance procedures.
The SEC had alleged Applix improperly recognized revenue in two transactions, with the company forced to re-state earnings in 2001 and 2002.
Both settlements were accompanied with an SEC announcement of new guidelines to help assess fines imposed on traded companies that breach trading regulations. Penalties will be principally assessed according to how far the business gained from a securities violation and the degree to which the fine will cause further harm to shareholders.
Additional guidelines will also measure the extent of injury to innocent parties and whether the violating is widespread throughout the corporation. ®
Sponsored: Today’s most dangerous security threats