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Bankrate to Pay $15M to Settle SEC Fraud Charges

     (CN) – Bankrate Inc. will pay $15 million to settle charges it cooked the books to ensure its claimed financial results met analyst expectations, the U.S. Securities and Exchange Commission announced Monday.
     The agency also announced it has reached a $180,045 settlement with the company’s former vice president of finance Hyunjin Lerner.
     Bankrate is a consumer financial information provider based in New York. It is perhaps best known as the operator of Bankrate.com, a personal finance website.
     According to the SEC, Bankrate’s former chief financial officer, Edward, DiMaria, allegedly threatened to rip the head off a subordinate if the executive did not claim that $500,000 in revenues the company never realized.
     Prosecutors said Bankrate posted the artificially inflated results on July 12, 2012, causing its share price to rise 10.2 percent the next day. They claim DiMaria later sold $2 million of company stock at inflated prices, and that Lerner also engaged in some profit taking.
     In agreeing to the settlement, neither Bankrate nor Lerner admitted to any wrongdoing.
     The SEC said it will continue to pursue a case against DiMaria and Bankrate’s former director of accounting Mathew Gamsey. In a release the agency said the two men worked with Lerner to “fabricate revenues and avoid booking certain expenses to meet analyst estimates” for earnings.
     Attorneys for both men said their clients did nothing wrong and intend to mount a vigorous defense in regard to the allegations made against them.

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