San Diego District presiding judge Roger Benitez rejected a jury’s verdict reached twelve weeks ago that found the former Gateway CFO and the company’s financial controller Robert Manza to be liable for accounting fraud.
But certain post-trial motions swayed Benitez’s verdict on grounds of insufficient evidence. According to court records, Benitez concluded that Todd did not act inappropriately as CFO and did not intentionally deceive the public.
The SEC had sought a permanent injunction, disgorgement of Todd’s salary, and a permanent ban on holding a senior officer or director positions in its original civil enforcement suit. The judge also rejected this and instead ordered Todd to pay $16,500 in penalties for an accounting error found in a minor transaction in the third quarter of 2003. The impact of that error was less than 1% of Gateway’s quarterly revenue for that quarter.
There were accounting disagreements. I’m not an accountant, a relieved Todd said in a statement after the judge’s verdict.
The SEC went after the South Dakota-based computer manufacturer in November 2003, charging several senior management and financial executives with manipulating earnings in the third quarter of 2000.
In June last year Gateway’s CEO Jeffrey Weitzen won a similar dismissal from the same judge in a separate SEC fraud case.
Charges against controller Manza still hold for now. But the judge Benitez’s decisions in favor of Todd and Weitzen bode well for his case.
