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Richardson notes that companies are not required to keep mum about revenues received after a reporting period ends.
The accounting flexibility available to public companies is necessary, he notes, even though it makes some breaches hard to detect.
During the four quarters of fiscal 2000, for example, the practice improperly inflated revenues by 25%, 53%, 46% and 22%, respectively.
The SEC said the goal was to meet or beat per-share earnings estimates of Wall Street analysts, a key to keeping a company’s stock price rising.
When the company stopped the practice at the end of the first quarter of 2001, it fell short of the Wall Street earnings estimate and the share price fell by more than 43% in a single day.
Shares currently trade around , down from more than early in 2000.
They paid more than they should have for the stock, or kept in when, had they known the truth, they would have sold.