Judge rules that the former CFO of smart window maker View is subject to SEC charges
A federal judge has ruled that the former chief financial officer for View, who was accused of negligently allowing the manufacturer of "smart" windows to understate costs of replacing defective windows by the U.S. Securities and Exchange Commission.
In a decision handed down on Monday evening, U.S. district judge Beth Labson Freeman of San Jose, California rejected the claim made by ex-CFO Vidulprakash that in its civil case, the SEC couldn't prove that his actions had violated federal securities laws and antifraud provisions.
The lawyers of Prakash did not respond immediately to comments made outside normal business hours on Tuesday.
View became public in March of 2021 after a $1.6billion merger with Cantor Fitzgerald's special-purpose acquisition firm. In April 2024, the Milpitas-based company filed Chapter 11 bankruptcy and agreed to become private. The SEC announced the case in July 2023, which was a result of a defective seal component in View’s smart windows. These tinted panes are commonly used in office buildings and adjust to the sun.
View is alleged to have understated its window-related liabilities in 2019 by $25 million and in 2020 by $28 millions by failing to disclose shipping and installation costs as well as manufacturing costs.
Prakash claimed that the SEC couldn't prove he knew, or should have known, View would cover these costs.
In a 30-page ruling, Freeman stated that a jury could reasonably find that Prakash had breached his duty to care and that his failure of telling View's accounting staff what the company was up to was the "proximate" cause of the alleged understatement.
View, who replaced Prakash in November 2021 as CFO, decided to restate financial statements for more than two years.
The SEC settled without admitting any wrongdoing, and the company was not fined for its cooperation.
SEC v. Prakash is the case, U.S. District Court for Northern District of California No. 23-03300. Reporting by Jonathan Stempel, New York Editing Rod Nickel
(source: Reuters)