SALON

Tuesday, Dec 18, 2012 8:00 PM UTC

TheStreet.com company, 3 executives settle charges

By

Topics: From the Wires,

WASHINGTON (AP) — The company that operates the financial news website TheStreet.com and three executives have settled federal civil charges of accounting fraud.

The Securities and Exchange Commission said Tuesday that the company, TheStreet Inc., and the executives engaged in a scheme in 2008 to artificially inflate the company’s revenue and mislead investors. The co-presidents of a company subsidiary and a former chief financial officer of the company agreed to pay a total of about $409,000 to settle the charges.

Co-presidents Gregg Alwine and David Barnett were barred for 10 years from serving as officers or directors of any public company. Former CFO Eric Ashman was barred for three years.

TheStreet Inc. and the three executives neither admitted nor denied the allegations but agreed to refrain from future violations of the securities laws.

Attorneys for the executives and company representatives didn’t immediately return calls seeking comment.

The company filed false financial reports throughout 2008 which reported revenue from sham transactions at the subsidiary, which it acquired in 2007, the SEC said. The subsidiary conducts promotions such as sweepstakes on the Internet.

The agency said Alwine and Barnett made the phony transactions and also fabricated and backdated documents to enable the fraud.

Ashman caused TheStreet Inc. to report revenue before the company had earned it, the SEC said in a civil lawsuit filed in federal court in Manhattan.

The company restated its 2008 earnings in February 2010 and disclosed several accounting improprieties for the subsidiary, the SEC said.

“Alwine and Barnett used crooked tactics, Ashman ignored basic accounting rules and TheStreet failed to put controls in place to spot the wrongdoing,” Andrew Calamari, director of the SEC’s regional office in New York, said in a statement. “The SEC will continue to root out accounting fraud and punish the executives responsible.”

Under the settlements Alwine agreed to pay a civil fine of $120,000 and Barnett is paying a $130,000 civil fine. Ashman agreed to a $125,000 civil fine and to reimburse TheStreet Inc. $34,240.40. The SEC recovered the money for the company in a so-called “clawback,” under an anti-fraud law that requires senior executives to repay bonuses and stock profits they received during a period in which their company violated financial reporting rules.

TheStreet.com was co-founded in 1996 by former hedge fund manager James Cramer, who is the host of cable TV network CNBC’s “Mad Money” show.

In September, TheStreet Inc. announced its purchase of The Deal LLC for $5.8 million. The digital publication specializing in news on mergers and acquisitions brings a customer base of 40,000 professionals, including bankers, lawyers and partners in private equity firms, TheStreet said.

By Marcy Gordon

More By Marcy Gordon.

Next Article

You Might Also Like

More Related Stories

Featured Slide Shows

Gripping photos: The people of the Turkey protests (slideshow)

close X
  • Share on Twitter
  • Share on Facebook
  • Thumbnails
  • Fullscreen
  • 1 of 11
  • The protests take on a festive element as police forces move out of the park and square. Wearing a gas mask, this young man dances to traditional Turkish music in front of Taksim Square’s Ataturk Monument.

  • In Gezi Park since March 31st, this protester, originally caught off-guard by the Government’s teargas and water cannons, went out and bought a Russian army mask from WWII, preparing for what was to come.

  • This rambunctious boy seems to be enjoying the chaos. After taking this picture he threw a stone at the already destroyed building in the background.

  • Forming a line, the police face off directly with protesters in Taksim Square. After a while, they retreated and there was a general cheer – a back-and-forth dance that has been common since the beginning of this protest.

  • An elderly woman in Gezi Park reads the news. The tent community occupying the park was violently destroyed on June 16th.

  • Many different groups had set up booths to promote their cause in Taksim Square and Gezi Park. Standing in front of one, this man waves his flag while posing with conviction.

  • Many home-remedies are used to minimize the effects of tear gas. This woman has put a milky solution on her face, removing her mask after the tear gas dissipated. Before sunrise, the police came again for another round of teargasing.

  • People capitalize on the uprising -- selling flags, beer, gas masks, sky lanterns and spray paint to name just a few of the popular items.

  • On Monday morning, June 11, the police execute a strong offensive. Many plain-clothed police officers, like the ones seen here, clash with protesters in the side streets away from the main stand-off in Taksim.

  • The authorities seem to be most aggressive in the night, pushing protesters away from the square and park. After being teargassed this young woman catches her breath with other protesters on Siraselviler Street.

  • Recent Slide Shows

  • Share on Twitter
  • Share on Facebook
  • Thumbnails
  • Fullscreen
  • 1 of 11

Related Videos

More Related Stories

Comments

 0 Comments

Comment Preview

Your name will appear as username ( settings | log out )

You may use these HTML tags and attributes: <a href=""> <b> <em> <strong> <i> <blockquote>

follow salon

Most Read

Popular on Reddit

links from salon.com

From Around the Web

Presented by Scribol
listener_new_rect The Listener: "We Are All Completely Beside Ourselves": Growing up primate

Recommendations