Accounting & Tax

Ex-CEO of i2 to Settle for $8.3M

He took part in a scheme that misstated roughly $1 billion of license revenue at the software company.
Stephen TaubFebruary 16, 2007

Former i2 Technologies chief executive officer Gregory A. Brady has agreed to pay $8.3 million to settle charges with the Securities and Exchange Commission stemming from a scheme to overstate revenues.

Brady is one of three former officers of the software company who were charged by the SEC in July 2005. Last October former chief financial officer William M. Beecher agreed to pay more than $2.1 million in a similar settlement.

In 2004 the company itself agreed to settle SEC charges by paying $10 million.

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The commission alleged that, during the four years ending in 2001 and the first three quarters of 2002, i2 misstated roughly $1 billion of software license revenue, including more than $125 million it never should have recognized.

Brady participated and assisted others in a fraudulent revenue-recognition scheme, the SEC also charged, by signing regulatory filings containing the misstated financial information, providing representation letters to external auditors certifying the misstated financials and the quality of i2’s internal controls, and approving earnings releases and participating in public conference calls at which materially false and misleading financial information was provided. The commission also alleged that Brady profited by illegally trading i2 securities with material insider information.

Brady, who neither admitted nor denied the allegations, agreed to an order barring him from serving as a public company officer or director for five years. He also consented to the entry of a final judgment enjoining him from violating or aiding and abetting violations of the antifraud, record-keeping, reporting, internal-controls, and false-statements-to-auditors provisions of the federal securities laws.

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