Prabhat Goyal found guilty of securities fraud
Former McAfee Chief Financial Officer, Prabhat Goyal, was found guilty by a San Francisco jury of fudging accounting to hide losses and pump up the company's revenue figures from 1998 through Jan 2001.
By PTI |
SILICON VALLEY: Former McAfee Chief Financial Officer, Prabhat Goyal, was found guilty by a San Francisco jury of fudging accounting to hide losses and pump up the company's revenue figures from 1998 through Jan 2001.
As a result of Goyal's actions, federal prosecutors argued that McAfee Inc., then known as Network Associates, improperly recorded more than $ 470 million in revenue and understated its losses by more than $ 330 million, according to LAW.com
The government alleged that Goyal based company revenue on the number of software licenses sold to distributors, rather than on the number of licenses sold by distributors to actual customers.
Prosecutors also said Goyal gave millions of dollars in payments disguised as discounts and rebates to convince distributors to not return unsold products, and to purchase more products than they could sell to customers, the legal publication reported.
These actions and others ended up inflating the company's stock price, which in turn allowed Goyal to enrich himself, the government alleged. The fraud originally spurred the December 2000 resignations of Goyal, Network Associates chief executive Bill Larson and President Peter Watkins, according to media reports.
Each count carries a maximum penalty of 10 years in prison and a $ one million fine, according to the US Attorney's office for Northern California.
"It is an unjust result and we will do everything we can to have it corrected," said Goyal's attorney, Wilmer Cutler Pickering Hale and Dorr partner Stephen Jonas.
Jonas said he would seek to have the conviction overturned by the judge at a hearing on July 27. If that failed, Goyal would file an appeal, Jonas said.
A year ago, McAfee agreed to pay $ 50 million to settle its own accounting fraud charges and end an investigation by the SEC.
Federal jury yesterday convicted the former chief financial officer of McAfee of securities fraud stemming from a plan to conceal $ 330 million in losses from investors.
Download
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
Download
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
ADVERTISEMENT
