The Securities and Exchange Commission settled civil charges with the former CFO and CEO of a defunct solar energy products company for their alleged roles in a financial fraud case.
Allen Barnett, the former CEO of AstroPower Inc., and Thomas Stiner, the former CFO, agreed to pay civil penalties of $65,000 and $40,000, respectively. AstroPower is no longer an operating company. Its common stock was cancelled and its assets liquidated through bankruptcy in 2004. According to the SEC’s complaint, Barnett and Stiner made material misstatements, engaged in fraudulent accounting practices, and signed filings made with the commission that they knew, or were reckless in not knowing, contained materially false and misleading financial statements.
The SEC charges that at the direction of Barnett and Stiner, AstroPower improperly recognized about $4 million in revenues from four transactions executed over the course of the second and third quarters of 2002. As a result of improperly recognizing revenue from these transactions, AstroPower’s net income was overstated by about $160,000 or 80 percent for the second quarter of 2002, and about $440,000 or 113 percent for the third quarter of that year, according to the SEC.
The commission alleged that these material misstatements of revenue and net income were included in regulatory filings that Barnett and Stiner signed.
Without admitting or denying the allegations made in the complaint, Barnett and Stiner consented to a ban from acting as officers or directors of any public company, in addition to paying the civil penalties.
Stiner, again without admitting or denying the commission’s findings, also consented to a suspension from appearing or practicing before the SEC as an accountant. Stiner served as CFO of AstroPower from December 1997 through May 2003. He had previously served as the company’s controller from May 1993 through November 1997.
In May 2003, AstroPower’s board accepted Stiner’s resignation after an expanded financial statement audit and an internal investigation uncovered improper revenue recognition practices and significant deficiencies in AstroPower’s internal accounting controls and bookkeeping, according to the SEC. He is now a self-employed homebuilder.
Barnett founded AstroPower and served as its chief executive officer and president, and as a director from 1989 through 2003. On May 23, 2003, AstroPower’s board accepted Barnett’s resignation.