Former McAfee official settles fraud charges |
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By SearchSecurity.com Staff
01 Nov 2006 | SearchSecurity.com |
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A former McAfee Inc., official is agreeing to pay more than $757,000 to settle fraud charges by The Security and Exchange Commission (SEC).
Eric Borrmann, who served as a senior financial officer at McAfee, was charged with aiding and abetting a multimillion dollar financial fraud at McAfee from mid-1999 until his departure from the company in July, 2000. The complaint further charges that Borrmann engaged in insider trading, profiting over $314,000.
Under the terms of the settlement, Borrmann is barred from serving as an officer or director of a public company for five years, according to the SEC.
Borrmann served as McAfee's treasurer, and was responsible for all financial planning and investor relations at the company.
The complaint alleges that "through regular meetings with McAfee's senior executives and managers, Borrmann learned of certain fraudulent schemes that McAfee was using during 1999 and 2000 to inflate its revenues. In the second quarter of 2000, Borrmann assisted McAfee's executives and senior managers in the preparation and dissemination to investors of false and misleading information about McAfee's financial results, including its inflated revenues and earnings," according to the SEC.
The SEC has been investigating McAfee since 2002. In October, McAfee fired its president and its chief executive stepped down as part of a stock option investigation.
In January, McAfee paid $50 million to defrauded investors and appointed an independent consultant to clean up its internal accounting controls under a proposed settlement announced by the SEC.
The Commission's action against Borrmann is the SEC's fifth civil enforcement action related to the accounting fraud at McAfee. Previously, the Commission filed civil actions against McAfee, Inc., McAfee's former Chief Financial Officer Prabhat Goyal, and two former Controllers Terry Davis and Evan S. Collins.
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