SEC charges window maker View, ex-CFO over accounting fraud (updated)

View

03/07/2023 19:21

(Adds comment from defendant Prakash's lawyer, closing stock
price, in paragraphs 10-11)
    By Jonathan Stempel
       July 3 (Reuters) - The U.S. Securities and Exchange
Commission on Monday charged View Inc  VIEW.O , the maker of
"smart" windows whose tinted panes adjust with the sun, and a
former chief financial officer for understating the costs of
replacing defective windows, leading to a restatement.
    View won't have to pay a fine because it reported the error,
took remedial action and cooperated with the SEC. The company, 
based in Milpitas, California, did not admit or deny wrongdoing.
    Former CFO Vidul Prakash, 55, was charged in San Francisco
federal court with negligence-based fraud, disclosure and books
and records violations between December 2020 and May 2021.
    View went public through a $1.6 billion merger in March 2021
with a Cantor Fitzgerald-backed special-purpose acquisition
company.
    The case arose from a defective sealing component in View's
smart windows, which are often used in office buildings.
    According to the SEC, View disclosed $22 million to $25
million of liabilities, largely for manufacturing replacement
windows, but should have disclosed $48 million to $53 million of
liabilities, incorporating shipping and installation costs.
    The SEC said Prakash was told multiple times that View would
pay for shipping and installation, but failed to have staff
assess whether the costs were probable and could be reasonably
estimated, which would require disclosure.
    In November 2021, View said it would restate more than two
years of financials, and it replaced Prakash as CFO.
    View and its lawyer did not immediately respond to requests
for comment.
        Prakash's lawyer Craig Martin said he was disappointed
the SEC decided to sue. "At all times, Vidul acted reasonably,
and we look forward to vindicating him in court," Martin said.
  
        View's share price is down nearly 99% since the SPAC
merger closed. The shares rose 0.7 cent to 12.8 cents on Monday.
View asked shareholders last month to approve a reverse stock
split.
    

 (Reporting by Jonathan Stempel in New York; Editing by Devika
Syamnath and Leslie Adler)
 ((jon.stempel@thomsonreuters.com; +1 646 223 6317; Reuters
Messaging: jon.stempel.thomsonreuters.com@reuters.net))