Financially troubled Revolution Lighting Technologies has been charged by the Securities and Exchange Commission (SEC) with accounting fraud for falsely inflating its reported revenues from late 2014 to mid-2018.
The Stamford firm ”“ which has weathered a number of challenges over the past couple of years, including staff resignations, being delisted from the Nasdaq, and a plan by CEO Robert LaPenta to take the company private, only to rescind that offer — is said to have improperly recognized revenue for sales much earlier than is permitted by accounting rules or Revolution”™s own written revenue-recognition policies.
LaPenta, former CFO James DePalma, and two former CFOs of Revolution”™s largest division, Allen Garner and Daniel O”™Neal, were also charged for their roles in causing Revolution Lighting to misreport its revenue.
In addition to violating antifraud statutes, the SEC has charged LaPenta and DePalma with making false certifications in Revolution Lighting’s filings, and DePalma, Garner, and O’Neal of circuimventing accounting controls or falsified records. It also alleges Garner misled Revolution Lighting’s auditor.
Without confirming or denying the allegations, the four executives have consented to judgments permanently enjoining them from future violations of the charged provisions and requiring them to pay penalties of $1.25 million, $192,768, $100,000, $25,000, and $25,000, respectively.
Garner also agreed to be prohibited from acting as a public company officer or director for five years.
“Companies are required to provide accurate disclosures of material information so investors are able to understand and evaluate the company’s businesses,” Paul Levenson of the SEC’s Boston Regional Office said in a statement.
