The Securities and Exchange Commission today announced that Comscore and its former CEO Serge Matta were charged with engaging in a fraudulent scheme that resulted in a $50 million overstatement of revenue. The charges, which include allegations that Comscore made “false and misleading statements about key performance metrics,” is the latest setback for the embattled company, which provides marketing data and analytics to media, advertising agencies and publishers.
As part of a settlement agreement, Comscore and Matta agreed to penalties of $5 million and $700,000 respectively, “without admitting or denying the orders' findings,” the SEC stated. Matta also agreed to reimburse Comscore for $2.1 million. He is also barred from serving as an officer or director of a public company for 10 years.
The SEC alleges that for two years beginning in February 2014, Comscore, at the direction of Matta, “entered into non-monetary transactions for the purpose of improperly increasing its reported revenue.” The scheme involved Comscore exchanging sets of data with an unnamed party without cash consideration. It then recognized revenue as a result of these transactions “based on the fair value of the data it delivered, which had been improperly increased in order to inflate revenue,” according to the SEC.
Comscore and Matta “manipulated the accounting for non-monetary and other transactions in an effort to chase revenue targets and deceive investors about the performance of Comscore's business,” Melissa Hodgman, associate director in the SEC's enforcement division, stated in a press release. "We will continue to hold issuers and executives accountable for such serious breaches of their fundamental duty to make accurate disclosures to the investing public while giving appropriate credit for a company’s prompt remedial acts and cooperation.”