Network Deception

Concord, NH: (Mar-12-08) The US Securities and Exchange Commission (SEC) brought civil securities fraud charges against Riverstone Networks and Enterasys Networks, two Cabletron Systems spin-offs, alleging that executives inflated revenue when their company spun off from Cabletron in 2001. As part of a settlement reached in the case, six Riverstone Networks executives, and two Enterasys executives have agreed to pay a total of more than $1.6 million in fines. The settlement was filed in US District Court for the Northern District of California.

Records showed that none of defendants who settled admitted or denied the charges, though the settlement prevents them from disputing the factual allegations. The Riverstone settlement involves former chief executive Romulus S. Pereira, former chief financial officer FO Robert Stanton, L. John Kern, vice president of sales, Andrew Feldman, vice president of marketing, William McFarland, vice president of finance, and Lori Cornmesser, director of sales operations, and Enterasys' former chief financial officer Robert Gagalis and Bruce Kay, the former vice president of finance were all named defendants in the SEC's lawsuit. [NEW HAMPSHIRE BUSINESS REVIEW: 8 EXECS SETTLE IN ENTERASYS, RIVERSTONE CASES]

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Published on Mar-13-08