MILWAUKEE (CN) – The CEO and CFO of Merge Healthcare juggled the books of the medical software and imaging company, costing the company $500 million in market capitalization and whacking two-thirds off its stock price, the SEC says in a settled complaint.
Merge, its CEO Richard Linden of Barrington, Ill., and CFO Scott Fish of Whitefish Bay, Wisc., settled with the SEC without admitting anything.
Linden will pay $590,000 and Veech will pay $290,000. Both will be barred from directing a public company for 5 years, and the SEC told them not to do it again, ever.
The SEC said the executives’ book juggling overstated Merge’s net revenue by 26 percent and its net income by 230 percent in annual and quarterly reports from the first quarter of 2002 through the second quarter of 2005. “The accounting fraud ultimately cost the company more than $500 million in market capitalization” the SEC said in a statement accompanying its federal filing.