The SEC alleges that TheStreet Inc., which operates the website TheStreet.com, filed false financial reports throughout 2008 by reporting revenue from fraudulent transactions at a subsidiary it had acquired the previous year. The co-presidents of the subsidiary – Gregg Alwine and David Barnett – entered into sham transactions with friendly counterparties that had little or no economic substance. They also fabricated and backdated contracts and other documents to facilitate the fraudulent accounting. Barnett is additionally charged with misleading TheStreet’s auditor to believe that the subsidiary had performed services to earn revenue on a specific transaction when in fact it did not perform the services. The SEC also alleges that TheStreet’s former chief financial officer Eric Ashman caused the company to report revenue before it had been earned.
The three executives agreed to pay financial penalties and accept officer-and-director bars to settle the SEC’s charges.
“Alwine and Barnett used crooked tactics, Ashman ignored basic accounting rules, and TheStreet failed to put controls in place to spot the wrongdoing,” said Andrew M. Calamari, Director of the SEC’s New York Regional Office. “The SEC will continue to root out accounting fraud and punish the executives responsible.”
Of course the people named were fined (not jailed) and "agreed not to break the law again in the future."
Meanwhile how many people are tossed in prison every day for robbing a local store of $50?
That's what I thought.
12:49 CT: Well I'll be damned, CNBC just reported it
Where We Are, Where We're Heading (2013) - The annual 2013 Ticker
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