Michael Cully and Douglas Newton

San Jose, CA: (Jul-02-07) The US Securities and Exchange Commission (SEC) filed civil charges against the former chief executive Mark Leslie and four other senior managers of Veritas Software Corp., alleging that they engineered financial fraud while at their positions in the company. The SEC charged Mark Leslie, former Chief Financial Officer Kenneth Lonchar, former Executive Vice President Paul Sallaberry, former controller Michael Cully, and former Assistant Controller Douglas Newton in US District Court in San Jose. Leslie, Lonchar and Sallaberry were accused of artificially inflating revenue and earnings through a "round-trip" transaction with America Online Inc. in 2000 and then lying to independent auditors. The SEC claimed that the fraudulent transaction inflated revenue by $20 million. Cully and Newton were accused of manipulating results between 2000 and 2003. The two did not admit to or deny the SEC's charges, but agreed to a settlement. The settlement reached included Cully agreeing to return about $181,000, pay a $35,000 fine and be subject to a five-year ban on work as a corporate officer or director. Newton agreed to return about $37,000 and pay a $25,000 fine. A $30 million settlement with between the SEC and Veritas was announced in February 2007, but the company neither admitted nor denied charges of securities and accounting fraud. It restated earnings in 2003 and 2004. [SAN FRANCISCO BUSINESS JOURNAL: VERITAS FRAUD]

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Published on Jul-4-07