The SEC announced on Tuesday that it filed a settled action against Scott Hirth, the former Vice-President of Finance and Chief Financial Officer for ProQuest Company’s Information and Learning Division, alleging participation in a financial fraud scheme that occurred from 2001 through 2005.
The SEC’s alleges that at the end of monthly and quarterly reporting periods, “Hirth made fraudulent manual journal entries in order to favorably alter ProQuest’s financial results. These manual journal entries were adjustments to the balances in certain ProQuest accounts and were designed to increase revenue and decrease expenses at ProQuest.” The Commission further alleged that Hirth created false documentation to purportedly support the balances in the manipulated accounts and used “hidden rows” and “white font” functions in spreadsheets to conceal his false accounting entries.
Under the terms of the settlement, Hirth is permanently enjoined from committing future violations of the federal securities laws, and he will pay disgorgement of $233,676.00, prejudgment interest of $54,474.25 and a civil penalty of $130,000, and consent to be permanently barred from serving as an officer and director of a public company and from practicing as an accountant before the Commission. ProQuest is permanently enjoined from future violations of the internal controls, books and records, and reporting provisions of the federal securities laws.
The SEC’s complaint is available here.