Gemstar Settles SEC Case for $10M6/23/2004 9:50 AM Eastern
Gemstar-TV Guide International Inc. stock rose 21 cents (5%) to $4.82 Wednesday after the company agreed to pay the Securities and Exchange Commission $10 million to settle a lawsuit filed by the agency.
The SEC filed a complaint against Gemstar-TV Guide Wednesday and immediately settled the case against the interactive-program-guide vendor, which had been accused of overstating its revenue by $250 million between 1999-2002.
The SEC said Gemstar recorded IPG revenue for expired, disputed and nonexistent agreements, and it also inflated IPG-advertising revenue by improperly recording and reporting revenue from “multiple-element” transactions and barter deals, among other allegations.
“The magnitude of the improper conduct at Gemstar, together with its initial lack of effective cooperation or remedial efforts, warrant the imposition of a significant monetary penalty,” said Randall Lee, director of the SEC’s Pacific regional office, in a prepared statement. “We are continuing to pursue our case against former Gemstar senior management.”
Under the SEC settlement, Gemstar admitted no wrongdoing. The SEC has separate cases pending against former Gemstar CEO Henry Yuen and former chief financial officer Elsie Leung.