SAN DIEGO, CA (May 30, 2007) — A federal court in San Diego entered an order today setting aside the fraud and lying to auditors verdicts that had been previously entered against Robert Manza, the former controller of Gateway, Inc. The case was brought against Manza by the U.S. Securities and Exchange Commission (SEC). Manza had previously been found civilly liable following a jury trial.
In overturning the fraud verdicts, and entering judgment in Manza's favor as a matter of law, the court held that the SEC had failed to prove Manza acted with fraudulent intent in connection with certain transactions that were included in Gateway's financial statements in 2000. The court upheld the jury's verdicts that Manza was liable for aiding and abetting certain reporting violations by Gateway, but held that his actions did not justify the relief sought by the SEC.
The court denied the SEC's request for an injunction prohibiting Manza from future violations of the federal securities laws, denied the request to bar Manza from serving as an officer or director of a public corporation and denied the request that Manza be ordered to disgorge any proceeds he obtained as a result of his actions. The court imposed only a $10,500 fine on Manza. The SEC had sought a $110,000 fine. The SEC had also sought $85,150 in disgorgement plus an additional $40,388 in prejudgment interest.
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