Veritas plans to hand SEC $30m to end accounting saga

10 May 2005

Veritas expects US regulators to hit it with a $30m charge to settle up a long-term investigation into the company's accounting practices.

Veritas has been upfront about the US Securities and Exchange Commission's look at its books. The software maker has admitted to a series of accounting mistakes and controversial practices and has restated financial results from the fiscal years 2000, 2001, 2002 and 2003. Earlier this year, Veritas was forced to delay the filing of a year-end report with the SEC as it struggled to meet the new Sarbanes-Oxley requirements.

In a filing today with the SEC, Veritas said the following, "(The company) is in discussions with the staff of the Securities and Exchange Commission regarding the Commission's review of the Company's accounting for certain transactions in 2000 with AOL Time Warner and other parties, and certain accounting matters applicable to the Company's 2001 through 2003 financial statements . . . Based on recent communications with the staff of the SEC, as of the date of this current report, the Company expects these discussions to result in a settlement in which the Company will be enjoined from future violations of certain provisions of the securities laws and required to pay a penalty of approximately $30 million."

That $30m charge will be tacked on to Veritas's first quarter results, which were reported last week.

There's no lack of irony in Veritas's accounting troubles. For one, the company's name means "truth" in Latin - a fact that was highlighted by reporters a couple of years back when Veritas's CFO was fired for faking information on his resume. Secondly, Veritas sells a line of software meant to help companies meet regulatory requirements.

The company is currently being acquired by Symantec and doesn't expect the SEC matters to affect this deal.

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