NEW YORK (AP) — Data-measurement firm Comscore has settled fraud charges with the Securities and Exchange Commission and will pay a $5 million penalty.
Its former CEO, Serge Matta, will also pay $700,000 and give Comscore back $2.1 million from his pay and sales of company stock. He is also barred from serving as an officer or director of a public company for a decade. Comscore and Matta did not admit or deny the SEC’s charges.
The commission said Tuesday that Comscore fraudulently inflated its revenue by $50 million from February 2014 to February 2016, which helped it beat Wall Street analysts’ sales estimates for seven quarters. That’s an important measure for investors and can impact a company’s stock price.
The SEC said Comscore, which tracks digital and TV audiences and movie theater ticket sales, overvalued deals where it provided data sets to other companies, allowing it to inflate its revenue. The agency said Matta then misled Comscore’s accountants.
The agency said Comscore also made misleading public statements about how many customers it had in an attempt to show steady growth, when its customers were actually declining in number. It did this by changing the definition of what a customer was, without telling investors about the changes.
The SEC said Comscore misled investors as well regarding sales of a flagship product that measured ad campaigns, saying it grew when it actually fell.
Reston, Virginia-based Comscore said Tuesday that it has overhauled its board and management and has new internal control procedures in place.
Matta did not immediately reply to a message requesting comment sent to ICX Media, a media and tech data-tracking firm where he currently serves as CEO.
Comscore shares dropped 4.7% Tuesday.