SEC charges VMware with misleading investors
(Reuters) — The U.S. Securities and Exchange Commission said Monday it charged cloud computing company VMware Inc. with misleading investors by obscuring its financial performance.
The company was charged with misleading investors about its order backlog management practices, which the agency said enabled it to push revenue into future quarters by delaying product deliveries to customers, thereby concealing the company's slowing performance relative to its projections.
Without admitting or denying the findings in the SEC's order, VMware consented to a cease-and-desist order and will pay an $8 million penalty, the SEC said. VMware confirmed in a statement of its own that it reached a settlement with the SEC and agreed to pay the penalty without admitting or denying the SEC’s findings.
The SEC said it found that beginning in fiscal-year 2019, VMware began delaying the delivery of license keys on some sales orders until just after quarter-end so that it could recognize revenue from the corresponding license sales in the following quarter.
