U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 25766 / July 3, 2023
Accounting and Auditing Enforcement Release No. 4426 / July 3, 2023
Securities and Exchange Commission v. Vidul Prakash, 3:23-cv-03300 (N.D. Cal., Complaint filed July 3, 2023)
SEC Charges Former CFO of "Smart" Window Manufacturer, View Inc., for Failure to Disclose Company's $28 Million Liability
The Securities and Exchange Commission today charged Vidul Prakash, the former Chief Financial Officer of California-based manufacturer of "smart" windows, View Inc. ("View"), for his negligent failure to ensure the company's disclosure of $28 million in projected warranty-related liabilities.
The SEC's complaint alleges that, in a series of reports and statements filed with the SEC from December 2020 to May 2021, View disclosed warranty liabilities of $22 million to $25 million, consisting largely of projected costs to manufacture replacements for certain defective windows. According to the complaint, Prakash approved the amounts disclosed despite knowing that those amounts excluded additional costs which View had decided to incur to pay to ship and install the replacement windows. The complaint alleges that, including those additional costs, View should have disclosed total warranty liabilities of $48-$53 million and, as a result, View materially misstated its warranty liability for fiscal years 2019 and 2020 and the first quarter of 2021.
The SEC's complaint, filed in the U.S. District Court for the Northern District of California, charges Prakash with violating Section 17(a)(3) of the Securities Act of 1933, Section 14(a) of the Securities Exchange Act of 1934 ("Exchange Act"), and Exchange Act Rules 14a-9 and 13b2-1. The complaint seeks permanent injunctions, civil penalties, and an officer and director bar.
The SEC's investigation was conducted by Theis Finlev and Michael Foley and was supervised by Jason H. Lee, all of the SEC's San Francisco Regional Office. The SEC's litigation against Prakash will be conducted by Suzy LaMarca and Mr. Finlev.