R. Bruce Acacio
Litigation Release No. 17292 / January 2, 2002
Accounting and Auditing Enforcement Release No. 1484
Securities and Exchange Commission v. R. Bruce Acacio, Civil Action No. 2:01CV-1010ST
The Commission filed a civil Complaint against R. Bruce Acacio, the Chairman and Chief Executive Officer of California Software Corp. alleging violations of certain provisions of the federal securities laws and seeking penalties. The Complaint alleges that Acacio: (1) violated the provisions of the federal securities laws which prohibit providing false and misleading information in the offer and sale of securities, falsifying the books and records of an issuer of securities and providing false information to auditors in connection with the audit of financial statements; and (2) aided and abetted California Software's violations of the provisions of the federal securities laws which require issuers to file accurate annual and quarterly reports, maintain manually signed signature pages for reports filed with the Commission, and maintain books and records that accurately reflect a company's financial condition. Simultaneously with the filing of the complaint, Acacio consented to the entry of an injunction enjoining him from future violations of Sections 17(a)(2) and (3) of the Securities Act of 1933 and Rules 13b2-1 and 13b2-2 under the Securities Exchange Act of 1934, and from aiding and abetting violations of Sections 13(a) and 13(b)(2) of the Securities Exchange Act of 1934 and Rules 12b-11, 12b-20, 13a-1 and 13a-13 thereunder. Acacio also agreed to pay $30,000 in penalties in the action.
The Complaint alleges that from September 1999 through May 2000, California Software filed periodic reports containing audited and unaudited financial statements overstating the company's revenues, earnings, assets and shareholders equity, primarily as a result of an improper revenue recognition practice utilized by the company. It is further alleged that the overstatements of revenues and earnings were included in a private placement memorandum used in an offering of California Software stock that raised over $8.7 million. It is further alleged that Acacio failed to sign and caused California Software to fail to maintain manually-signed signature pages, with respect to its filings with the Commission.
It is alleged that until September 2000, California Software had recognized revenue upon shipment of the software to potential customers, whether or not persuasive evidence existed of an arrangement to purchase the software by the potential customer. Finally it is alleged that in October 2000, California Software restated its financial statements for the year ended December 31, 1999 and for the quarter ended March 31, 2000, upon learning from newly-retained auditors that its revenue recognition practice did not comply with generally accepted accounting procedures.
 | SEC Complaint in this matter. |