SEC: Comscore and former CEO to pay $5 million and $700,000
Topics: COMSCORE SERGE MATTA SEC
The SEC's orders find, among other things, that from February 2014 through February 2016, Comscore, at the direction of its former CEO Serge Matta, entered into non-monetary transactions for the purpose of improperly increasing its reported revenue.
Through these transactions, Comscore and a counterparty would negotiate and agree to exchange sets of data without any cash consideration.
Comscore recognized revenue on these transactions based on the fair value of the data it delivered, which had been improperly increased in order to inflate revenue.
The SEC's orders also find that Comscore and Matta made false and misleading public disclosures regarding the company’s customer base and flagship product and that Matta lied to Comscore's internal accountants and external audit firm.
This scheme enabled Comscore to artificially exceed its analysts' consensus revenue target in seven consecutive quarters and create the illusion of smooth and steady growth in Comscore's business.
To settle the charges, without admitting or denying the orders' findings, Comscore and Matta agreed to cease-and-desist from future violations of the antifraud provisions of the federal securities laws and to pay penalties of $5 million and $700,000, respectively.
Matta also agreed to reimburse Comscore $2.1 million representing profits from the sale of Comscore stock and incentive-based compensation pursuant to Section 304(a) of the Sarbanes-Oxley Act and to the entry of an order barring him from serving as an officer or director of a public company for 10 years. ■