Wireless hardware and bar-code maker Symbol Technologies
announced Thursday afternoon that it may be facing a fine after it received a so-called “Wells Notice” from the Securities and Exchange Commission. The SEC has been probing the Holtsville, N.Y., company’s accounting practices, which Symbol announced in August of last year.
The notice gives the company a chance to argue against the SEC’s plans to recommend civil actions against Symbol and some individuals over alleged violations of federal securities laws and regulations.
The company said that as part of an ongoing audit of its 2002 revenues, it discovered that departmental-level accrued expenses were improperly understated or applied, resulting in a $9 million error on its books.
The company said it fired the individual responsible for the error. On Tuesday, its chief auditor, Robert Korkuc resigned after close to 13 years with the company. Mark Greenquist, chief financial officer, is filling the slot in the meantime, the company said.
As a result of the $9 million error on its unaudited financial results, Symbol said it did not meet a minimum threshold for performance bonuses for some employees and executives. “As a result, no executive bonuses will be paid for 2002,” the company said.
It also expects to issue financial restatements covering periods from from 1999 through 2002 and that it expects to file the restatements by June instead of by March 31.
Shares of Symbol, which closed at $10.70 just before the announcement, fell to $8.70 in after-hours trading Thursday.