Lime Energy Co. agreed to pay $1 million to settle accounting fraud charges filed by the Securities and Exchange Commission. SEC alleged that Lime Energy and four of its executives recognized millions of dollars of revenue improperly.
In total $20million of revenue was accounted for incorrectly from 2010 to 2012. In 2010, two of the company’s executives developed procedures where the revenue could be recognized as part of that year, on newly signed contract before the documentation was received. But even when the documentation didn’t arrive, they went ahead and booked the revenue. The two executives became even more aggressive in the next few years. They would directly go to the Controller with new entries for revenue and inflate the numbers to meet their internal goals.
None of the executives either admitted or denied the allegations, but all agreed to pay a penalty and are barred to serve as director/officer of a public company for the next few years.
