LOS ANGELES - Gemstar-TV Guide International Inc. has agreed to pay a $10 million penalty to settle charges brought by federal regulators that the company overstated revenue from 1999 through 2002. advertisement
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The Securities and Exchange Commission filed a lawsuit against Gemstar on Wednesday and then agreed to settle the case, with Gemstar paying the fine, which will be distributed to shareholders.The complaint, filed in federal court in Los Angeles, alleges that Gemstar inflated its revenue by nearly $250 million by recording revenue from expired or contested license agreements. Gemstar, which is 42 percent owned by News Corp., also recorded barter transactions as revenue and engaged in some “round trip” arrangements, paying a third party, which then used those funds to buy advertising from Gemstar, according to the complaint. The company, which publishes TV Guide magazine and licenses its interactive program guide to cable operators and consumer electronics companies, did not admit or deny the allegations as part of the settlement. The SEC has separate lawsuits pending against several former Gemstar executives, including company founder Henry Yuen, stemming from the same transactions. In announcing the settlement, the SEC acknowledged the cooperation of new executives installed by News Corp. after Yuen and others were forced out in October 2002. © 2004 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. | MORE FROM CORPORATE SCANDALS |
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