Former Quovadx execs agree to SEC fines
Two former executives of software company Quovadx Inc. have agreed to fines levied by the Securities and Exchange Commission for their part in a scheme to inflate the company's revenue.
The SEC said Thursday Lorine R. Sweeney, the former CEO, and Gary T. Scherping, the former CFO, didn't admit or deny the allegations but agreed to pay civil penalties. Sweeney will pay $75,000 and Scherping will pay $70,000.
Both former executives also are barred from serving as a corporate officer or director for five years.
The SEC alleged the two in 2003 orchestrated "the fraudulent recognition of over $12 million in software licensing revenue" by Greenwood Village-based Quovadx. Because of their actions, the SEC said, Quovadx overstated its software revenue by about 9 percent. The SEC also found similar fraudulent activity in the third quarter of 2002 payday loans application.
Sweeney and Scherping, the SEC alleged, lied to the company's auditor, circumvented internal controls and falsified books and records.
In addition to the fine, Scherping was suspended from appearing or practicing before the SEC as an accountant. He can apply for reinstatement after five years.
The SEC closed its investigation into Quovadx in July 2007. The company's settlement did not involve a fine, but a pledge to halt any future violations of securities laws.
The SEC launched its investigation in April 2004 after Quovadx was forced to restate its financials when a company in India ordered millions of dollars of software but ultimately failed to pay. Sweeney, Scherping and other executives later quit.
Filed under: business, technology by Finance Boss