The Securities and Exchange Commission will distribute more than $48 million to 12,115 investors who were the victims of a fraudulent financial reporting scheme orchestrated by European media giant Vivendi Universal SA of Paris, the SEC announced today.
The settlement affects defrauded investors from 16 countries, including the United States, more than half of whom bought their Vivendi stock on foreign exchanges.
The SEC filed an enforcement action in December 2003 against Vivendi, its former chief executive, Jean-Marie Messier, and its former chief financial officer, Guillaume Hannezo, alleging violations of anti-fraud and other provisions of federal securities laws.
The SEC charged that the defendants engaged in violations by making misleading statements about the company's financial condition.
According to the complaint, the defendants disguised Vivendi's cash flow and liquidity problems, improperly adjusted its accounting reserves to meet earnings targets, and failed to disclose material financial commitments.
Under the terms of the settlement, Vivendi agreed to pay a $50 million civil penalty without admitting or denying the SEC's allegations.
Mr. Messier also agreed to pay a $1 million civil penalty and Mr. Hannezo agreed to pay a civil penalty totaling more than $250,000 and to forfeit a severance package.
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