Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

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Wednesday, February 21, 2007

Veritas settles earnings management charges

The SEC filed a complaint in the U.S. District  Court  for  the    District of Columbia yesterday charging Veritas  Software  Corporation with securities fraud for engaging in an  earnings  management  scheme and filing false and misleading financial statements from 2000 through 2003. Veritas was also charged with fraud in connection with  improper round-trip  transactions,  including  a  round-trip  transaction  with  America Online, Inc. (AOL), as well as aiding  and  abetting  AOL's fraud. Veritas was acquired by Symantec Corporation on July 2, 2005.

Without admitting or denying the allegations in the complaint, Veritas consented to the entry of a judgment that  enjoins  the  company  from violating the antifraud, reporting, books and  records,  and  internal control provisions of the federal securities laws, and from aiding and abetting securities fraud violations by  other  parties.  Veritas  was also ordered to pay a $30 million civil penalty, which the  Commission will seek to distribute to harmed investors pursuant to the Fair Funds provision of the Sarbanes-Oxley Act of 2002. [SEC v. Veritas  Software
   Corp., Civil Action No. 07-364 (D.D.C.)] (LR-20008; AAE Rel. 2562)

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