In a suit that was filed October 6, the SEC alleges that the two executives illegally inflated revenue by prematurely installing hospital equipment and acquiring a forged doctor's signature to accelerate the process of the sale.
Christoper Sells and Timothy Murawski, the former company vice president and the former vice president of sales for Hansen Medical Inc., allegedly committed securities fraud in a series of transactions in 2008 and 2009, according to the newspaper.
Although the charges were specific to the two individuals, the SEC filed the case in a civil court against Hansen Medical. The commission has also said that the company agreed to accept cease-and-desist orders barring violations of securities disclosure and reporting laws.
This agreement did not include any fine or admission of wrongdoing on the part of Hansen Medical, according to the newspaper.
According to the SEC, the company asked Sells to resign and fired Murawski after initially learning of the misrepresentations in 2009. Hansen Medical then went on to note that its earning statements were off and that the revenue was improperly stated, reported the Chronicle.
The Associated Press reported that Hansen Medical reached the settlement several years after they studied the misrepresentation of financing in an October 2009 probe.
READ MORE STOCK BROKER LEGAL NEWS
According to the Chronicle, Sells and Murawski allegedly twice used "undisclosed trickery" to make it appear that they had sold Hansen's largest and more expensive products to area hospitals before the sale actually went through.
Though the two hospitals were not ready for the installations, Sells and Murawski allegedly arranged for the organizations to install the technology temporarily and then dismantle and keep it in storage. These alleged false recordings of transactions led to higher numbers for the specific sales quarter, the news source reported.
The two individuals concealed their actions from Hansen Medical accountants and the company's independent auditors, in an effort to conceal the stock fraud, the SEC contends.