SEC Announces Fraud Case Against Logitech
The U.S. Securities and Exchange Commission (SEC) recently announced a financial fraud case against Logitech International S.A. (NASDAQ: LOGI) and former executives accused of various accounting failures that left investors without accurate depictions of company finances.
In this case, technology manufacturer Logitech agreed to pay a $7.5 million penalty for fraudulently inflating its fiscal year 2011 financial results to meet earnings guidance and committing other accounting-related violations during a five-year period.
The company’s then-controller, Michael Doktorczyk, and then-director of accounting, Sherralyn Bolles, agreed to pay penalties of $50,000 and $25,000, respectively, for violations related to Logitech’s warranty accrual accounting and failure to amortize intangibles from an earlier acquisition.
The SEC filed a complaint in federal court Thursday against Logitech’s then-chief financial officer, Erik Bardman, and then-acting controller, Jennifer Wolf, alleging that they deliberately minimized the write-down of millions of dollars of excess component parts for a product for which Logitech had excess inventory in fiscal 2011.
For Logitech’s financial statements, the two executives falsely assumed the company would build all the components into finished products despite their knowledge of contrary facts and events.
In the Logitech case, former CEO Gerald Quindlen was not accused of any misconduct but has returned $194,487 in incentive-based compensation and stock sale profits received during the period of accounting violations.
Shares of Logitech were trading up 1.2% at $15.71 on Friday, with a consensus analyst price target of $16.50 and a 52-week trading range of $12.52 to $16.62.