SEC Charges Against View and Its Ex-CFO
The Securities and Exchange Commission (SEC) has pressed charges against View Inc., a prominent producer of smart windows, and Vidul Prakash, its former Chief Financial Officer (CFO). The regulatory body alleges that the company and Prakash understated the costs of replacing defective windows, which subsequently led to a financial restatement.
View's Response and Compliance
Despite the charges, View will not be required to pay a fine. The California-based company reported the accounting error, took necessary corrective measures, and fully cooperated with the SEC. However, the company did not either admit or deny any wrongdoing.
Ex-CFO's Legal Troubles
Prakash, aged 55, is facing negligence-based fraud, disclosure, and books and records violations charges. These allegations stem from the period between December 2020 and May 2021, filed in the San Francisco federal court.
The Path to Public Market
View entered the public market through a $1.6 billion merger with a special-purpose acquisition company, backed by Cantor Fitzgerald, in March 2021.
The Defective Component Issue
The case originates from a defective sealing component in View's smart windows, commonly installed in office buildings. The SEC revealed that View disclosed liabilities of $22 million to $25 million, primarily for manufacturing replacement windows. However, the regulator believes the company should have disclosed $48 million to $53 million of liabilities, including shipping and installation costs.
Financial Restatement and Personnel Changes
In November 2021, View announced that it would revise over two years of financial records and subsequently replaced Prakash as CFO.
The Legal Standoff
Requests for comments from View and its lawyer were not immediately responded to. Meanwhile, Prakash's attorney Craig Martin expressed disappointment over the SEC's decision to sue, stating that Prakash had always acted reasonably.
View's Stock Performance
The charges seem to have taken a toll on View's stock price, which has declined by nearly 99% since the SPAC merger. However, the shares rose slightly to 12.8 cents on Monday. Last month, View asked its shareholders to approve a reverse stock split.