SEC Notice to Satyam Was Issued in 2009

Jack Humphrey, Regulatory journalist
October 02, 2010 /

The U. S. Securities and Exchange Commission has sent notice to India’s Satyam Computer Services advising the company a market regulator may file charges alleging fraud in a civil suit against the company.

Last year Satyam Computer Services,Ltd, was involved in the biggest corporate fraud scheme in India. The Saytam corporation revealed it had received the SEC notification in 2009 regarding the intention for the charges to be filed. Clarification from the company was not given why this information was made public at this time.

At this writing there was not a response provided from a representative from Satyam or the SEC regarding the filing for the alleged fraud.

Saytam previously stated the notice received from the Division of Enforcement at the SEC advised a civil suit would be filed alleging SEC violations including fraud, and seeking monetary relief along with permanent injunctions for fraud. The company also stated the SEC decision had not yet been decided.

The founder and former chairman of Satyam, Ramalinga Raju, advised investors in 2009 profits were overstated in the financial report. He also told the investors the numbers regarding assets where falsified in an alleged fraud involving over $1.5 billion in reported revenue for the company.

Satyam has self disclosed the authorities located in India and the SEC are investigating the company also for the accounting ploy called “round tripping”. This investigation includes time period before and up to April 2002. Round tripping is know as a technique in accounting used to inflate revenue records for technology companies.


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