The SEC today announced it settled its lawsuit against McAfee Inc., which will pay a $50 million penalty. The Santa Clara, Calif., software company neither admitted nor denied the SEC's charges of inflating its revenues between 1998 and 2000 but agreed to the penalty, which the SEC will use to pay investors harmed by the company's overstatement of revenues, according to an SEC news release. McAfee also agreed to appoint an independent consultant to examine its accounting practices and recommend improvements.
The SEC also sued Prabhat Goyal, former CFO, and Terry Davis, the former controller, for their roles in the fraudulent accounting at McAfee. Dispositions of those suits are awaiting the resolution of criminal proceedings brought against the two defendants by the U.S. Attorney's Office for the Northern District of California.
The company's largest institutional investors as of Sept. 30 were Lord Abbett, Allianz Global Investors, Fidelity Management & Research, Putnam Investments, Mellon Financial, Goldman Sachs, T. Rowe Price, Oppenheimer Funds, State Street Corp. and AMVESCAP.