Informix Corp. has settled charges brought by securities regulators that it fraudulently inflated revenues and earnings between 1994 and 1997, the U.S. Securities and Exchange Commission said today.
In a case that was filed and settled today, the database software vendor is accused of "fraudulently and otherwise improperly" inflating revenues by US$295 million and earnings by $244 million between 1994 and the first quarter of 1997, the SEC said in a statement.
Informix agreed to the settlement without admitting to or denying the SEC's findings, and the Commission's investigation continues, the SEC said.
Through former employees, Informix violated antifraud provisions of the federal securities laws, the SEC said, as well as the reporting, books and records, and internal control provisions of the Securities Exchange Act of 1934.
The Commission also found that Informix, through former employees, made materially false and misleading filings with the SEC between 1994 and 1997. The company's books and records during those periods were falsified, and Informix failed to employ a sufficient system of internal accounting controls, the SEC said.
As the alleged illegal conduct came to light, managers at the company acted fraudulently to avoid restating Informix's financial results, the SEC found.
After its former managers were replaced, Informix uncovered more than $100 million of accounting irregularities and restated its financial results, the SEC said.
Informix was ordered to stop violating various securities laws and cooperate with the SEC's continuing investigation.
Informix officials said no monetary fines or penalties were imposed against the company, and Informix will cooperate with the ongoing investigation.
"The company is gratified to have resolved the investigation," Robert Finocchio Jr., the chairman of the company's board of directors, said in a statement.
"The resolution of the investigation and the recently announced settlements of the private securities litigation mean that the Company has closed the book on the past and now can concentrate on the future."
Informix announced last month that it had settled shareholder lawsuits related to the irregularities.
Informix shares on the Nasdaq stock market were trading at $9.50 late this afternoon, down 75 cents, or about 7 percent, from yesterday's closing price.
The SEC's statement can be viewed on the Web at http://www.sec.gov/news/informix.htm/.
Informix, in Menlo Park, California, can be reached at +1-650-926-6300, or on the Web at http://www.informix.com/.