Comscore and Matta Pay $5.7m to Settle SEC Charges

Audience measurement firm Comscore has paid $5m to finalize a settlement with the Securities and Exchange Commission, resolving its investigation into accounting and disclosure practices in the two years to February 2016. Former CEO Serge Matta has also made payments to both Comscore and the SEC.

The amount of the company's fine has been reserved and disclosed in previous filings. In the deal, Comscore neither admits nor denies the allegations made, which refer to conduct under a previous management team including then-CEO Matta. A separate settlement with Matta were announced by the SEC today, under which he has agreed to pay the company a 'clawback' totalling $2.1m, and the Commission $0.7m. Matta has also agreed to a 10-year ban from serving as a public company officer or director.

The SEC's charges said Comscore had engaged in 'a fraudulent scheme to overstate revenue by approximately $50 million and making false and misleading statements about key performance metrics'. This refers to data agreements which were negotiated with clients at Matta's instigation, where no money changed hands, but which the Commission said were included in accounts and used to 'mislead' investors, giving 'the illusion of smooth and steady growth'. An audit report into the problems, published after several delays in September 2016 had nevertheless concluded that the inclusions were an 'error of judgement' compounded by 'internal control deficiencies' - and indeed the fact that non-monetary deals were included was not hidden, to the extent that the inclusions were public knowledge and called into question in the financial press.

In allowing the settlement the SEC took into account a number of factors, including Comscore's co-operation during the investigation, its replacement of its former CEO and other senior executives since, its implementation of new and extensive internal control procedures and policies, and introduction of 'a new, comprehensive compliance management system'. All the senior management and directors who were with the Company at the time of the conduct described in the Order have now left, and the current Board of Directors and management team stressed in a statement that they are 'committed to maintaining strong internal controls, financial reporting, compliance, and corporate governance practices'.

Chairman of the Board Brent Rosenthal said of the news: 'We are pleased to have settled this legacy issue with the SEC. In addition to our commitment to compliance and with this matter behind us, the Board and I remain fully focused on the business and are committed to further developing our unique data assets, differentiated data analytics, and strong brand equity'.

Web site: www.comscore.com .

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas, 2024- by Nick Thomas, unless otherwise stated.

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