Alere (NYSE:ALR) has agreed to pay more than $13 million to settle charges claiming it committed accounting fraud through its subsidiaries, according to an SEC release posted today.
The Commission said that Alere was charged with committing accounting fraud through its subsidiaries to meet revenue targets and making improper payments to foreign officials to increase sales in select countries.
The charges are against the South Korean subsidiary of Alere which sells diagnostic testing equipment, according to the SEC. The SEC said it issued an order which found that the subsidiary “improperly inflated revenues by prematurely recording sales for products that were still being stored at warehouses or otherwise not yet delivered to their customers.”
“Our securities laws give investors the right to a fair picture of public companies’ finances. For Alere, that picture was distorted by multiple accounting failures and by outright fraud,” SEC Boston Regional Office director Paul Levenson said in a prepared statement.
The SEC said its order also found that subsidiaries in India “obtained or retained business” by making improper payments, through distributors or consultants, to officials of government agencies or governmentally controlled entities. It also stated that Alere “failed to maintain adequate internal controls to prevent the payments,” and had inaccurately recorded the payments in its records.
Without admitting to or denying the findings, Alere agreed to pay $3.3 million in disgorgement for ill-gotten gains, as well as interest of $495,196 and a penalty of $9.2 million, according to the SEC.
In August, a Massachusetts federal judge dismissed most of a securities fraud class action case against Alere, saying that the complaint did not support the claim that Alere senior management had prior knowledge of the company’s alleged wrongdoing.
The post Alere to pay $13m to settle SEC accounting fraud charges appeared first on MassDevice.
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