© Reuters. FILE PHOTO: The U.S. Securities and Exchange Commission logo adorns an office door at the SEC headquarters in Washington, June 24, 2011. REUTERS/Jonathan Ernst/File Photo/File Photo
By Jonathan Stempel
(Reuters) -The U.S. Securities and Exchange Commission on Monday charged View Inc, the maker of “smart” windows whose tinted panes adjust with the sun, and a former chief financial officer for understating the costs of replacing defective windows, leading to a restatement.
View won’t have to pay a fine because it reported the error, took remedial action and cooperated with the SEC. The company, based in Milpitas, California, did not admit or deny wrongdoing.
Former CFO Vidul Prakash, 55, was charged in San Francisco federal court with negligence-based fraud, disclosure and books and records violations between December 2020 and May 2021.
View went public through a $1.6 billion merger in March 2021 with a Cantor Fitzgerald-backed special-purpose acquisition company.
The case arose from a defective sealing component in View’s smart windows, which are often used in office buildings.
According to the SEC, View disclosed $22 million to $25 million of liabilities, largely for manufacturing replacement windows, but should have disclosed $48 million to $53 million of liabilities, incorporating shipping and installation costs.
The SEC said Prakash was told multiple times that View would pay for shipping and installation, but failed to have staff assess whether the costs were probable and could be reasonably estimated, which would require disclosure.
In November 2021, View said it would restate more than two years of financials, and it replaced Prakash as CFO.
View and its lawyer did not immediately respond to requests for comment.
Prakash’s lawyer Craig Martin said he was disappointed the SEC decided to sue. “At all times, Vidul acted reasonably, and we look forward to vindicating him in court,” Martin said.
View’s share price is down nearly 99% since the SPAC merger closed. The shares rose 0.7 cent to 12.8 cents on Monday. View asked shareholders last month to approve a reverse stock split.