CFO fined $400G for cooking books

The SEC charged a database producer and an ex-exec with accounting fraud that lost the firm more than $437 million.

The SEC today charged a Michigan database company and a former executive with an accounting fraud that resulted in the company losing more than $437 million in market capitalization and caused its stock price to drop by more than half during a two-month period in early 2006.
The Securities and Exchange Commission alleges that Scott Hirth, the former vice president of finance and chief financial officer for ProQuest LLC, made fraudulent manual journal entries at the end of monthly and quarterly reporting periods in 2001-2005 as a way of favorably altering financial results.
The regulator also alleges that Anne Arbor, Mich.-based ProQuest failed to devise and maintain a system of internal accounting controls that could have prevented Mr. Hirth’s scheme and failed to apply other basic accounting principles.
Mr. Hirth will pay $233,676 in disgorgement, $54,474.25 in prejudgment interest, and a penalty of $130,000.
He also consented to be permanently barred from serving as an officer and director of a public company and from practicing as an accountant before the SEC.
Both Mr. Hirth and ProQuest, which is now known as Voyager Learning Co., have agreed to settle the SEC charges without admitting or denying the allegations.