Salt Lake-based ClearOne Communications confirmed Wednesday that within 90 days it may reach a global settlement with the U.S. Securities and Exchange Commission regarding the company's alleged accounting irregularities.
"We are, in fact, close enough that all parties' counsel — that means the counsel for ClearOne, the SEC, Fran Flood and Susie Strohm — feel that a global settlement proposal is possible within 90 days," said ClearOne spokesman Bryce Benson.
The SEC alleged in January that ClearOne dumped inventory, misled shareholders and fudged its books in order to meet revenue expectations. A two-day preliminary injunction hearing was held in March, and a trial date was set for September 2004.
In April, ClearOne permanently removed the two senior executives most directly implicated in the allegations — chief executive officer Frances Flood and chief financial officer Susie Strohm. Mike Keough was named the company's new CEO, and George Claffey was named CFO. That same month, the company was delisted from the Nasdaq stock exchange.
Late Tuesday, U.S. District Court Magistrate David Nuffer issued an order staying all discovery in the case and postponing the remaining court dates so that the parties could pursue negotiations.
Both Benson and Ken Israel, the SEC's district administrator in Salt Lake City, declined to elaborate on the nature or content of those negotiations, or when the talks began.
"I honestly can't tell you when they started, but I know that it has been our goal from the beginning to come to a resolution with the SEC and all parties involved that is in the best interest of ClearOne and its shareholders," Benson said.
Formerly known as Gentner Communications, ClearOne specializes in audio- and video-conferencing products and services.
In trading on the National Quotation Bureau's Pink Sheets, ClearOne stock closed down 9 cents Wednesday at $2.01 per share.