WASHINGTON, D.C. (Bloomberg) — Three MicroStrategy Inc. executives agreed to pay $11 million to settle regulators’ fraud charges that they caused the data management software company to inflate its financial results for 21 months.
MicroStrategy Chief Executive Michael Saylor, co-founder of the Vienna, Virginia-based company, agreed to pay $8.6 million of the total to settle the Securities and Exchange Commission charges. Chief Operating Officer Sanjeev Bansal and former Chief Financial Officer Mark Lynch will pay the remaining $2.4 million.
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MicroStrategy shares have tumbled about 95 percent from a 52- week high of $333 last March, when the company said it was restating its earnings. The stock was trading at $15.37 last week.
These are young, brilliant men who know their business inside-out but didn’t have the same knowledge of accounting rules,” said Saylor’s attorney, Harvey Pitt of Washington.
The flamboyant Saylor, 36, founded MicroStrategy in 1989, and Bansal, his one-time Massachusetts Institute of Technology classmate, joined the company a year later. It went public in 1998.
The SEC alleged that the three senior executives caused the company to prematurely book revenue. As a result, MicroStrategy reported net profits when in fact it incurred losses from its June 1998 initial public offering to March 2000.
