The Securities and Exchange Commission is bringing charges against a telecommunications equipment maker and two of its former executives for improperly recognizing as revenue over a million dollars’ worth of inventory.
The SEC’s Enforcement Division alleges that Newport Beach, Calif.-based AirTouch Communications Inc., former president and CEO Hideyuki Kanakubo, and former CFO Jerome Kaiser orchestrated a fraudulent revenue recognition scheme that violated GAAP by recognizing revenue on the inventory, which was shipped to a Florida warehouse, but never sold. They are also accused of defrauding an investor from whom they secured a $2 million loan for the company based on misstatements and omissions associated with the shipments.
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