SAN FRANCISCO (CN) – Silicon Valley technology company VeriFone Holdings juggled its books to inflate its income in 2007, and when the tricks came to light in December that year, VeriFone stock priced dropped by 46 percent, costing shareholders $1.8 billion in market capitalization in a single day, the SEC says in Federal Court.
The SEC sued VeriFone and its former supply chain controller, Paul Periolat. It claims Periolat juggled the books to make it appear that the company was earning as much as it predicted. Actually, the SEC says, VeriFone had suffered from declining gross margins for three consecutive quarters in 2007. It demands an injunction and penalties.