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By Richard Hill
Oct. 17 — Lime Energy Co. agreed to pay $1 million to settle SEC allegations it prematurely recognized $20 million in revenue to meet internal targets ( SEC v. Lime Energy Co., S.D.N.Y., 1:16-cv-08088, 10/17/16 ).
Four former executives also agreed to pay a total of $125,000 to settle related allegations, but the Securities and Exchange said its investigators found no personal misconduct by the company's then-chief executive officer and chief financial officer.
Nevertheless, the two—CEO John O'Rourke and CFO Jeffrey Mistarz—repaid the company $67,728 and $118,196, respectively, for cash bonuses and stock awards they received between 2010 and 2012, when the alleged violations occurred. That made it unnecessary for the SEC to pursue a clawback action against them, the agency said in a statement Oct. 17.
Lime—an acronym for “Less is More Efficient”—provides “energy efficiency projects to small businesses,” according to its website.
Former vice president of operations Joaquin Alberto Dos Santos Almeida and former director of operations Karan Raina developed procedures that enabled the company to book revenue on newly signed contracts based on documentation received before the end of 2010. “But when documentation did not arrive in time, they allegedly went ahead and booked the revenue anyway,” the SEC said.
Raina agreed to pay a $50,000 fine, as did former executive vice president James Smith. Former corporate controller Julianne Chandler agreed to pay a $25,000 fine and to be suspended from acting as a public company accountant for at least five years. Smith and Chandler also agreed to five-year officer-and-director bars, and Almeida to a permanent officer-director bar. They settled without admitting or denying the allegations.
The complaint was filed in the U.S. District Court for the Southern District of New York.
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The complaint in the case can be seen at http://www.bloomberglaw.com/public/document/v_Lime_Energy_Co_et_al_Docket_No_116cv08088_SDNY_Oct_17_2016_Cour.
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