U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23523 / April 20, 2016
Securities and Exchange Commission v. Bardman, et al., Civil Action No. 3:16-cv-02023-RS (N.D.Cal.)
SEC Files Case Against Erik Bardman, former CFO, and Jennifer Wolf, former Acting Controller, for their Roles in Materially Misstated Financial Statements of Logitech International, S.A.
The Securities and Exchange Commission today announced fraud and other charges against the former chief financial officer and the former acting controller of Logitech International, S.A., a publicly-traded manufacturer of technology products.
In a complaint filed on April 18, 2016, the SEC alleges that Erik K. Bardman of Los Altos, California, and Jennifer F. Wolf, of Campbell, California, fraudulently inflated Logitech's fiscal year 2011 financial results in order to meet earnings guidance. Specifically, Bardman and Wolf: (1) improperly valued inventory of component parts for a slow-selling product by falsely assuming that Logitech would build those parts, which the Company was attempting to sell at discounts, into finished goods; (2) misrepresented to Logitech's independent auditor that the Company's excess component parts would be used in production; and (3) misrepresented to the independent auditor the proper amount of Logitech's write-down of finished goods inventory by failing to incorporate probable future pricing adjustments. As a result of this misconduct, Logitech overstated its fiscal year 2011 operating income by $30.7 million, or over 27%. Bardman and Wolf's actions allowed Logitech to report operating income that met the Company's already-lowered guidance for fiscal year 2011.
The SEC's complaint charges Bardman and Wolf with violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5, as well as books and records and reporting violations. The SEC seeks permanent injunctions, financial penalties, disgorgement of ill-gotten gains, and officer-and-director bars.
Logitech has settled charges arising from Bardman and Wolf's conduct. In the Matter of Logitech International, S.A., et al., Administrative Proceeding 3-17212 (April 19, 2016).
The SEC's investigation was conducted by Paul Gunson and Matthew Finnegan, and supervised by Douglas McAllister. The litigation is being led by Paul Kisslinger and Kevin Lombardi, and supervised by Bridget Fitzpatrick.