Saba Software To Pay $1.75 Mln To Settle SEC Charges

(RTTNews) - Saba Software Inc. (SABA) Wednesday said it has agreed to pay $1.75 million to Securities and Exchange Commission in order to settle an accounting fraud allegations in which timesheets were falsified to hit quarterly financial targets.

According to a SEC statement, it found that company vice presidents Patrick Farrell and Sajeev Menon were atop a scheme at Saba Software in which managers based in the U.S. directed consultants in India to either falsely record time that they had not yet worked, or purposely fail to record hours worked during certain pay periods to conceal budget overruns from management and finance divisions.

The improper time-reporting practices enabled Saba Software to achieve its quarterly revenue and margin targets by improperly accelerating and misstating virtually all of its professional services revenue during a four-year period as well as a substantial portion of its license revenue.

"We are pleased to have resolved this matter with the SEC," said Shawn Farshchi, Saba's President and CEO. "With the settlement terms now finalized, we bring to a conclusion one important issue for the Company. Our next objective is to complete the restatement and once that is accomplished we are confident that our progress in the business will become more apparent."

Saba has agreed to pay a civil penalty of $1.75 million in three installments over a one-year period and may be required to make an additional payment of $0.1 million depending on the date on which it files its Comprehensive Annual Report.