Fran Tarkenton, Others Fined in Fraud Sweep
A nationwide sweep by federal regulators targeting alleged accounting fraud has led to settlements with former NFL quarterback Fran Tarkenton, executives of a bankrupt San Juan Capistrano software firm and 64 others involved in 15 publicly held companies, officials said Tuesday.
In the Securities and Exchange Commission’s first “coordinated assault on financial-reporting misdeeds,” regulators said defendants agreed to pay $630,000 in fines.
The agency is seeking about $9 million in restitution and wants to bar 10 of the individuals involved from serving as officers or directors of publicly traded companies.
SEC Chairman Arthur Levitt has been pushing publicly traded companies to improve their financial reporting and avoid manipulating their earnings to meet Wall Street analysts’ projections.
The SEC said the cases involved a “cookbook of recipes” for fraudulent accounting, including reporting income from shipments that never were made, shipping products without customers’ wanting them, creating phony invoices and inflating the value of inventories.
In Tarkenton’s case, the Hall of Fame quarterback and 10 other former executives of his computer software and consulting firm, KnowledgeWare Inc., were accused of inflating by millions of dollars the company’s earnings in reports for its fiscal year ended June 30, 1994.
The former Minnesota Vikings quarterback agreed to pay a $100,000 fine and $54,187 in restitution. He did not admit any wrongdoing.
Executives of San Juan Capistrano software firm Wiz Technology Inc. allegedly misled investors with false financial statements that inflated the company’s stock price, then sold their shares for a profit, according to a lawsuit filed in U.S. District Court in San Francisco.
“It was a small company and the chief executive and the president and the chief financial officer ran it as though it belonged to them instead of the shareholders,” said Helane Morrison, district administrator for the SEC in San Francisco.
Associated Press was used in compiling this report.