SEC Charges Telecommunications Company and Executive with Revenue Recognition Violations

Washington D.C., [December 14, 2020] - The Securities and Exchange Commission today charged Belden Inc., a signal transmission solutions company, and a Belden executive, Dennis Wiser, for overstating revenue by more than $29 million for the first three quarters of 2017.

According to the SEC's order, Grass Valley improperly recognized revenue by shipping goods to warehouses that it paid for and controlled when customers were not ready or were unwilling to take possession of the goods before quarter-end. The order finds that Wiser, a Senior Vice President of Finance at Belden, approved this practice. In addition, the order finds that in the third quarter of 2017, Wiser authorized Grass Valley to improperly recognize revenue for purported sales to a former employee who would act as a distributor to lease or resell goods, when the former employee was unable to pay for the goods. According to the order, Grass Valley's financial results were consolidated in Belden's books and records and reported in Belden's financial statements. As described in the order, more than 140 transactions were prematurely recorded in Belden's books and records in 2017, resulting in the overstatement of revenue. The order finds that Belden disclosed, in its 2017 Form 10-K, that its internal controls concerning revenue recognition at Grass Valley were not sufficiently designed and effective, and constituted a material weakness in the company's internal control over financial reporting. The order further finds that during the SEC's investigation, Belden met with the staff on multiple occasions and voluntarily provided information likely to be of interest to the staff, both on its own initiative and at the staff's request.

The order finds that Belden violated the antifraud provisions of Sections 17(a)(2) and (3) of the Securities Act of 1933, the reporting provisions of Section 13(a) of the Securities Exchange Act of 1934 and Rules 13a-11 and 13a-13 thereunder, and the books and records and internal accounting controls provisions of Sections 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act. The order further finds that Wiser violated Section 17(a)(2) of the Securities Act and the books and records provisions of Section 13(b)(5) of the Exchange Act and Rule 13b2-1 thereunder, and caused Belden's violations of the other charged provisions. Without admitting or denying the SEC's findings, Belden has agreed to cease and desist from violating the charged provisions and to pay a $650,000 penalty. Wiser, without admitting or denying the findings, has agreed to cease and desist from committing or causing violations of the charged provisions and to pay a $50,000 penalty. Wiser will also be suspended from practicing before the SEC as an accountant with the right to apply for reinstatement after three years.

The SEC's investigation was conducted by Ian Dattner, Bert Braganza and Avron Elbaum, with assistance from Duane Thompson of the Trial Unit, and supervised by Lisa Deitch and Peter Rosario.