SEARCH NEWS:

 

Bally averts SEC penalty; ex-execs face action

LAS VEGAS, Nevada -- The U.S. Securities and Exchange Commission settled two actions against slot machine maker Bally Technologies on Wednesday, but it filed an administrative action against two of the company's former financial executives.

The SEC began investigating Bally in February 2005 in relation to the company's financial statements in 2003, the first two quarters of 2004 and the second and third quarters of 2005.

Under the settlement, Bally consented, without admitting or denying the SEC's findings, to a cease and desist order. The company is required to remain in compliance with federal securities laws and regulations relating to financial reporting, record keeping and internal controls.

A similar cease-and-desist order was settled with former Bally Chief Financial Officer Robert Saxton.

In a statement, Bally Technologies said it fully cooperated with the SEC during the investigation. There were no allegations of fraud against Bally and the company was not assessed any fines, civil penalties or monetary sanctions.

"These actions indicate that individuals fraudulently recognized revenues on Bally sales transaction and were responsible for Bally's false financial statements and misleading disclosures," said Donald Hoerl, acting regional director of the SEC's Denver office. "Our strong action in this case should serve as a message to those who seek to put shareholders at risk by publishing false and misleading financial information."

Meanwhile, a civil action was filed in U.S. District Court Wednesday against former Bally Chief Financial Officer and Chief Accounting Officer Steve Des Champs and former Vice President of Finance Martha Vlcek. They are alleged to have engaged in an accounting scheme to artificially inflate the company's reported revenue and present misleading information to investor's about Bally's earnings.

Hoerl said the case will proceed in the same manner as the settled cases. Des Champs and Vlcek will have time to respond to the charges.

As of March, Des Champs was chief financial officer of slot machine route operator United Coin. Vlcek is chief accounting officer for Elixir Gaming Technologies.

Copyright GamingWire. All rights reserved.

< Gaming News