(Reuters) — The U.S. Securities and Exchange Commission said on Monday it accused cloud computing company VMware Inc. of misleading investors by hiding its financial results.
The company was accused of misleading investors about its backlog management practices, which the agency said allowed it to push revenue into future quarters by delaying product deliveries to customers, thereby obscuring the company’s declining performance relative to its forecasts.
Without admitting or denying the findings of the SEC’s order, VMware agreed to a cease-and-desist order and will pay an $8 million penalty, the SEC said. VMware confirmed in a separate statement that it reached a settlement with the SEC and agreed to pay the penalty without admitting or denying the SEC̵7;s findings.
The SEC said it discovered that beginning in fiscal year 2019, VMware began delaying the delivery of license keys on certain sales orders until shortly after the end of the quarter so that it could recognize revenue from corresponding license sales in the following quarter.