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US v. Goyal, No. 08-10436

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By FindLaw Staff on December 14, 2010 1:54 PM

Securities Fraud Conviction Reversed

In US v. Goyal, No. 08-10436, the court reversed Defendant's convictions for securities fraud and making materially false statements to auditors where 1) because defendant's jury had no competent evidence of materiality before it, it could not have properly convicted him on any of the securities counts; 2) no evidence supported a finding that defendant knew that his company's subsidiary's commitments violated GAAP; and 3) there was no proof that defendant willfully concealed buy-in letters.

 

As the court wrote:  "Prabhat Goyal, former chief financial officer of Network Associates, Inc. ("NAI"), appeals from his convictions on fifteen counts of securities fraud and making materially false statements to auditors. The government alleged that NAI, under Goyal's supervision, violated generally accepted accounting principles ("GAAP") by recognizing revenue from certain software sales earlier than it should have."

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