Risk & Compliance

Former Netopia CFO Receives Wells Notice

Company has offered to settle an SEC investigation into prior disclosures and accounting practices.
Stephen TaubJuly 22, 2005

A former chief financial officer and a former senior sales vice president of sales for Netopia Inc. have each received a Wells notice from the Securities and Exchange Commission, indicating that the regulator could bring a civil enforcement action against them for possible securities laws violations.

Netopia, which provides broadband and wireless products, made the disclosure within a filing that announced its offer to settle an SEC investigation into prior disclosures and accounting practices, primarily related to the company’s restatement for the fiscal years ended 2002 and 2003.

The commission had upgraded an inquiry of the company to a formal order of investigation last October, according to the company, which added that it has been cooperating fully.

Netopia stated that the proposed settlement, and a related proposed settlement by the SEC with president and chief executive officer Alan B. Lefkof, will not involve the admission or denial of any wrongdoing, but both proposed settlements will probably involve some sort of monetary payment, which it did not disclose.

In its filing, the company did not identify the former CFO or the former vice president by name.

Netopia was one of scores of companies whose stocks soaring during the late 1990s Internet bubble, topping out at $86.25 in early 2000. It closed that year at $4.31, slightly higher than its current price of $3.40. The company currently trades on the Pink Sheets after being kicked off Nasdaq.

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