http://online.wsj.com/article_print/0,4287,SB101199526610000000,00.html
January 25, 2002 Shares of RSA Security Plunge On News of SEC Investigation CEO Says He Doesn't Expect Any Restatement of Financials By WILLIAM M. BULKELEY Staff Reporter of THE WALL STREET JOURNAL COMPANIES Dow Jones, Reuters RSA Security Inc. (RSAS) PRICE CHANGE U.S. dollars 11.86 -4.78 1/25 * At Market Close RSA Security Inc. shares plunged Friday, after the provider of network-security products and data-encryption software disclosed it is the target of a Securities and Exchange Commission investigation. Shares of RSA fell $4.78, or 29%, to $11.86 in 4 p.m. trading on the Nasdaq Stock Market. Arthur Coviello, chief executive officer of RSA, said in an interview that the company doesn't anticipate "any requirement to restate financials" as a result of the Securities and Exchange Commission inquiry. Mr. Coviello said that the SEC investigation involves a question of whether it should have disclosed in a press release certain information about changes in estimates for shipment to distributors. RSA limited the disclosure to a regulatory filing last spring after the first quarter. Mr. Coviello said the SEC is also looking at certain issues about trading in RSA's stock. He said he doesn't know the details of the investigation, but "We don't believe the company has anything to do with these other trading issues." He cautioned that "I don't really have all the facts at my disposal," but he said, "We absolutely believe there's no wrongdoing." He added, that RSA management is cooperating fully with the SEC. Later Friday, the company issued a statement (see statement0) saying that the investigation wouldn't require any change to RSA's financial statements. Mr. Coviello said that the amount involved in the accounting treatment was about $3 million, which is less than 2% of RSA's 2001 revenue of $283 million. A spokeswoman said that RSA hadn't mentioned the SEC investigation in the press release about earnings Thursday on advice of counsel. Mr. Coviello added that he hadn't seen any SEC notification but had heard about it from counsel. Write to William M. Bulkeley at [EMAIL PROTECTED] ------------------------------------------------------------------------ RSA Statement RSA Security Issues Clarification on SEC Investigation BEDFORD, Mass., Jan. 25 -- RSA Security Inc. today reported that the Securities and Exchange Commission has commenced a formal investigation into certain matters relating to the company. The SEC's investigative order relates to whether a change in RSA Security's method for estimating distributor revenue disclosed in its Quarterly Report on Form 10-Q for the first quarter of 2001 should have been disclosed in its earnings press release a few weeks earlier, as well as to certain trading in the company's securities. The investigation will not require any change to RSA Security's financial statements. "The SEC has not concluded that there has been any wrongdoing, and we don't believe that there has been any," said Art Coviello, CEO and president at RSA Security. "We are cooperating fully with the SEC on this matter." URL for this article: http://online.wsj.com/article/0,,SB101199526610000000.djm,00.html Hyperlinks in this Article: (1) mailto:[EMAIL PROTECTED] Updated January 25, 2002 5:47 p.m. EST Copyright 2002 Dow Jones & Company, Inc. All Rights Reserved Printing, distribution, and use of this material is governed by your Subscription agreement and Copyright laws. For information about subscribing go to http://www.wsj.com -- ----------------- R. A. Hettinga <mailto: [EMAIL PROTECTED]> The Internet Bearer Underwriting Corporation <http://www.ibuc.com/> 44 Farquhar Street, Boston, MA 02131 USA "... however it may deserve respect for its usefulness and antiquity, [predicting the end of the world] has not been found agreeable to experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire' --------------------------------------------------------------------- The Cryptography Mailing List Unsubscribe by sending "unsubscribe cryptography" to [EMAIL PROTECTED]
