SALT LAKE CITY (AP) -- Two former ClearOne Communications executives have agreed to pay fines and comply with injunctions to settle allegations by the Securities and Exchange Commission that they inflated revenue to boost stock prices.
Frances Flood, who was chief executive at the West Valley City-based maker of audio and visual conference equipment, and Susie Strohm, the former chief financial officer, consented to federal court injunctions without admitting any of the charges against them.
Ken Israel, SEC district administrator in Salt Lake City, said, "We got all the relief we were seeking."
Under terms of the court's final order issued Friday, Flood is forbidden from ever again serving as an officer or director of any publicly held company. She also surrendered nearly $71,000 in "performance-based compensation" she received from the company and agreed to pay a $70,000 fine.
Strohm was fined $25,000 and agreed to surrender $25,000 she received from ClearOne for her on-the-job performance.
Israel said the lesser penalty against Strohm was accepted in light of the findings of U.S. District Judge Dale Kimball that there was evidence Flood knowingly filed false or misleading financial statements, but that the evidence of Strohm's knowledge of the alleged scheme was weak.
The SEC had alleged the company, Flood and Strohm ran a scheme between 2001 and 2002 to artificially inflate revenue and net income by stuffing ClearOne's distribution channels with more merchandise than distributors could sell.
ClearOne settled the charges against it in December without receiving any fine or admitting wrongdoing.
Strohm's attorney, Steve Marsden, said the judgment against his client "reflects the judge's finding that Susie didn't act with any ill intent. From my point of view, it's a fairly minimal order. It's a good result."
(Copyright 2004 by The Associated Press. All Rights Reserved.)