Siebel Systems fined for misleading statements
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Siebel Systems has become the latest technology company to fall foul of financial regulators seeking to clean up corporate America.
Siebel has been fined $250,000 by the Securities and Exchange Commission (SEC) for allegedly misleading comments made by CEO Tom Siebel.
He was accused of making optimistic comments about his company's prospects, in a speech to about 200 investors in November 2001, just weeks after making negative comments about the company in public.
The distinct messages represented a breach of the SEC's Regulation Fair Disclosure (RegFD) rule, which prevents the disclosure of market-moving news to select groups of people.
Siebel Systems is one of four technology companies that have been probed under the RegFD rule, which was adopted in August 2000 but has not been enforced until now. The SEC is also investigating security software vendor Secure Computing, defence contractor Raytheon and telecommunications equipment maker Motorola.
Not everyone within the SEC supports the fresh investigations, however. Two of the organisation's five commissioners, Cynthia Glassman and Paul Atkins, have taken the unusual step of publicly criticising the penalty against Siebel this week.
Their objections will raise fresh questions about the scale of the SEC's scrutiny of the IT industry.
Ray Paquet, a vice president of market analyst Gartner, says he fears that the technology sector is now being victimised by regulators. "The Enron debacle has given the SEC licence to go on a witch-hunt," he says.
Those concerns come at a time when an increasing number of technology executives have fallen foul of the SEC.
Last week, a federal grand jury indicted Phillip White, the former CEO of database software company Informix, on financial accounting fraud charges. White, 60, faces a maximum of 10 years in prison for each of the eight counts alleged in the indictment.
Also last week, federal prosecutors won their first conviction in the investigation of Peregrine Systems, the asset management software company. Ilse Cappel, a former assistant treasurer, admitted she participated in a conspiracy to falsify invoices and manipulate key financial data. Cappel, 40, faces a maximum penalty of five years in prison and a $250,000 fine.
