SEC Charges Two Former Top Executives At OCZ Technology For Accounting Failures

(RTTNews) - The U.S. Securities and Exchange Commission charged two former top executives at OCZ Technology Group Inc. for accounting failures at the now-bankrupt seller of computer memory storage and power supply devices.

In a complaint filed in the Northern District of California, the SEC alleges that OCZ's former CEO Ryan Petersen engaged in a scheme to materially inflate OCZ's revenues and gross margins from 2010 to 2012. It separately charged OCZ's former chief financial officer Arthur Knapp for certain accounting, disclosure, and internal accounting controls failures at OCZ. Knapp agreed to settle the SEC's charges without admitting or denying the allegations against him. The SEC's litigation continues against Petersen.

The SEC charged Petersen with violating the antifraud, certification, books and records, internal controls, and clawback provisions of the federal securities laws. It also charged him with lying to accountants and aiding and abetting OCZ's violations of the reporting, books and records and internal controls provisions. The complaint seeks a permanent injunction, payment of his allegedly ill-gotten gains plus prejudgment interest, a civil penalty, an officer and director bar, and forfeiture of Petersen's stock sales profits and bonus.

The SEC charged Knapp with violating certain antifraud provisions, and the certification, and internal controls provisions, and with aiding and abetting OCZ's violations of the reporting, books and records, and internal controls provisions. Knapp agreed to be permanently enjoined from violating or aiding and abetting violations of these provisions, to be barred from acting as an officer or director of a public company, to pay a total of $130,000 in disgorgement, prejudgment interest, and civil penalties, and to forego any claims against OCZ for $170,000 in unpaid compensation. The settlement is subject to court approval.