SEC Charges Cloud Communications Company and Two Senior Executives With Misleading Revenue Projections

The Securities and Exchange Commission today charged a cloud communications company and two executives with providing misleading quarterly revenue estimates. The company and executives agreed to pay over $1.9 million in penalties to settle the SEC’s charges. According to the SEC’s order, Sonus Networks Inc.’s former CFO, Mark Greenquist, was aware of red flags which undermined the company’s first quarter 2015 revenue estimates. These red flags included that Sonus had pulled forward deals initially projected to close in 2015 in order to achieve its revenue guidance for the fourth quarter of 2014. Despite recognizing these risks, Greenquist said in a press release that he was comfortable with the consensus analyst revenue estimate of $74 million for the first quarter.