The U.S. Securities & Exchange Commission on Thursday charged two former executives of a Dallas IT company for mischaracterizing certain resale transactions that caused their company to inflate their revenues.
Former Chief Executive Officer Lynn Blodgett and Chief Financial Officer Kevin Kyser of Dallas-based Affiliated Computer Services, Inc., now owned by Xerox, agreed to pay the SEC nearly $675,000 to settle the charges without admitting or denying to the findings.
The Commission had claimed that Blodgett and Kyser arranged for an equipment manufacturer to re-direct approximately $20 million of pre-existing orders through ACS that it had already received from another reseller. This in turn caused ACS to improperly report $125 million in revenue, Thursday’s cease-and-desist order said.
James E. Etri, Todd B. Baker and David R. King of the SEC’s Fort Worth regional office conducted the investigation.
Paul Coggins of Locke Lord represented Blodgett, who will retire from his corporate executive vice president position at Xerox at the end of this year. Danny Ashby of K&L Gates represented Kyser, whose most recent position with Xerox was chief operating officer of the company’s information technology outsourcing group before his May 2013 resignation. Both attorneys are based in Dallas.
Coggins issued a statement to the Lawbook’s partner, The Dallas Morning News, that said “Lynn Blodgett is pleased to put this matter behind him without any bar to continuing to serve as an officer or director of a public company and without admitting or denying any allegations made by the SEC.”
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