Defendant Name:
McAfee, Inc.
Defendant Type:
Public Company
SIC Code:
7372
CUSIP:
57906410
Document Reference:
complaint_06-cv-00009
Document Details
Legal Case Name
Document Name
SEC v. McAfee, Inc. (f/k/a Network Associates, Inc.)
Document Date
04-Jan-2006
Document Format
Civil Proceeding
Case Number
06-cv-00009
Federal District Court
California, Northern District of California
Allegation Type
Issuer Reporting and Disclosure
Document Summary
In the Complaint, the SEC alleged that: "McAfee, Inc., formerly known as Network Associates, Inc. (hereinafter referred to as 'McAfee'), a publicly-traded manufacturer and supplier of computer programs and hardware based in Santa Clara, California, carried out a multimillion dollar financial fraud between 1998 to 2000. During the period, McAfee overstated its revenues by $622 million in order to meet revenue and earnings targets and understated its cumulative net losses by $353 million. McAfee stuffed its distribution channel and improperly recorded hundreds of millions of dollars of revenue on sales transactions with distributors in violation of the antifraud and other provisions of the federal securities laws. In a fraudulent scheme to oversell its products and immediately record the revenue from those transactions, McAfee secretly gave its distributors substantial cash payments, price discounts, rebates, and other concessions as inducements to continue buying, as well as to not return, McAfee products that the distributors had no reasonable expectation of selling to customers. McAfee also inflated its revenues in certain quarters during the relevant period by engaging in sham sales transactions that lacked economic substance and by improperly selling its accounts receivables in certain quarters, in order to perpetuate the misleading impression that McAfee had robust, non-discounted product sales."
