Federal regulators have sued five former executives and one former director of Thornton- based Fischer Imaging Corp., alleging they inflated revenues by improperly accounting for inventory.
Named in the suit that the Securities and Exchange Commission filed Tuesday are former chief executive Louis Rivelli; former chief financial officers Rodney Johnson and Stephen Burke; senior sales executives Craig Stevenson and Robert Hoffman; and former audit committee chairwoman Teresa Ayers.
None could be reached for comment Tuesday.
Federal accounting rules bar companies from booking revenue on goods until customers take possession.
The SEC launched a formal investigation of Fischer, which designs and develops medical- imaging systems, after the company restated financial results in 2003. Fischer, which has a market value of $21.6 million, later settled the case, agreeing to cease and desist from violating securities law.
Fischer cooperated in the investigation, CEO Harris Ravine said at the time. “We recognized and acknowledged that there were issues with the integrity of our financial statements, issues that we have subsequently resolved,” he said in a press release dated Nov. 15, 2004.
The SEC alleges that between 2000 and 2002, Fischer booked revenue on goods that it sent to warehouses rather than to its customers. In some cases, customers canceled orders for the warehoused goods before they were delivered.
Fischer hired Rivelli in 1999, when the company was in danger of bankruptcy. The company made an apparent turnaround, reporting its first profit in five years the following year.
The SEC suit accuses Rivelli of putting pressure on employees to meet revenue goals. “In an effort to increase Fischer’s reported quarterly revenue and net income, Rivelli set rigid sales targets and pressured Fischer’s sales personnel to meet them,” according to the suit. “Toward the end of each quarter, Rivelli held sales meetings once or more a day to discuss how to “move” prospective sales from later quarters into the present quarter,” according to the 45-page suit.
