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Street Patrol
Gateway Execs Pumped Up Earnings Way Back In 2000
- 2/3/2012 7:13:03 AM
It took a long time to pierce the veil, but a recent settlement shows that top executives of Gateway, Inc. were falsely pumping up the former computer maker's earnings as long ago as 2000. According to KTIV-TV in Sioux City, Iowa, the Securities and Exchange Commission said former Gateway CEO Jeffrey Weitzen and ex-controller Robert Manza engaged in fraud when they increased the company's revenues by claiming income of $47.2 million from the one-time sale of fixed assets to another company. Regulators also charge that Manza and John Todd, Gateway's former chief financial officer, improperly claimed $21 million in revenue from computer sales that had not yet been completed. Gateway restated its earnings a year later, showing $75 million less than previously claimed, and slashing its worldwide work force by 25 percent. Now, Weitzen has agreed to pay a $110,000 civil penalty, KTIV said. Manza will pay a $270,000 penalty, and is barred from serving as an officer or director of a publicly traded company for five years. The case against Todd is pending, the TV station reported. In 2007, Gateway was acquired by Acer, Inc. for $710 million.
