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7/24/2003
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SEC And RSA Security Settle Financial Probe

RSA did not admit any wrongdoing, and no penalties were levied against the company or its officers.

Information security firm RSA Security Inc. said late Wednesday that it had reached an agreement with the U.S. Securities and Exchange Commission regarding an investigation into the company's financial results for the first quarter of 2001.

The SEC investigation was launched in January 2002. In the settlement, RSA did not admit any wrongdoing, and no penalties were levied against the company or its officers. In a statement, RSA said the company will agree to an SEC order to stay in line with anti-fraud provisions of federal security laws.

"We're glad to have this whole thing behind us," a spokesman for RSA says.

The investigation began in 2001 when a press release stating the company's earnings for the first quarter that year failed to mention a change in the way RSA booked product sales sold through its distributors. That information was, however, disclosed in the company's 10Q form for that period.

The change in the way RSA decided to book revenue resulted in an increase of $1.7 million for that quarter.

The SEC maintains that the change in revenue from product sales should have also been mentioned in the company's financial press release for that quarter, as well as in the 10Q report.

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