Shearman & Sterling LLP | Government Regulatory Enforcement Blog | New Criminal Charges or Enforcement Actions Logitech and Ener 1<br >  
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  • New Criminal Charges or Enforcement Actions Logitech and Ener 1
     
    05/02/2016
    On April 19, the SEC announced significant enforcement actions against two separate companies – Logitech and Ener 1 – and certain of their officers.  The cases are unrelated, but both include allegations of accounting fraud.  The Logitech matter primarily involves section 10(b) claims that Logitech inflated its earnings by failing to write down excess inventory in a timely fashion.  The SEC settled its case against Logitech in an administrative proceeding, and filed a complaint in federal court against two company officers – the former CFO and Controller – who are contesting the allegations.  Shearman & Sterling is representing the former CFO in this matter.  The Ener1 matter primarily involves section 10(b) claims that Ener1 failed to impair investments and receivables timely.   The SEC filed two separate settled administrative proceedings relating to these allegations – one against the company and certain executives, and one against the former audit partner from PwC.  While each case involves different claims, and none of the defendants admitted the allegations, the SEC’s decision to announce the actions jointly highlights its continued aggressive focus on possible accounting fraud and earnings management.
    CATEGORY: Financial Fraud