Revolution Lighting CEO Didn’t Know about Accounting Problems

June 26 [addtoany]

Approximately six years ago the stock price of Revolution Lighting was in the $34 range.  Exactly one year ago the stock was trading at $4.03 and today the stock opened at $0.28 per share.

An article published in the Stamford Advocate states, “Several employees will lose their jobs, but not the CEO, as a result of irregularities tied to “bill-and-hold” transactions — in which the seller does not ship goods to the buyer, but still records the related revenues — the company said in a filing in the past week to the U.S. Securities and Exchange Commission, the agency investigating Revolution.”

In a letter to the Board on 19 OCT, the CEO, Robert LaPenta offered to take the company private at $2.00 a share, stating, “Given our familiarity with the Company, we would not need to conduct any further due diligence on the Company and would be in a position to sign a definitive transaction agreement quickly.”

The following month, after the stock continued to drop, the same CEO, Robert LaPenta, the same leader of the company and the same person most responsible for the failure of the company, lowered his offer to $1.50 per share.

Last October, the SEC issued a second subpoena related to Revolution’s Value Lighting and All-Around Lighting divisions.  According to the article in the Stamford Advocate, the audit committee places the blame on the division Value Lighting:

  • Value Lighting’s vice president of sales will be terminated. Frequently, he failed to obtain all signed bill-and-hold agreements in a timely manner, the company said.
  • An unnamed systems analyst at Value Lighting, who inappropriately backdated documents, will also be dismissed, the company said.
  • A number of former employees were also involved in improper accounting, according to the Audit Committee. That list includes Value Lighting’s former CFO, who left the company in mid-2016. He oversaw the wrongful altering and backdating of certain bill-and-hold documents, the company said.
  • Robert LaPenta, Revolution’s CEO, chairman and president, did not know about the bill-and-hold errors, according to the Audit Committee. He will remain as chief executive.

On 11 MAR, LaPenta withdrew his offer to take the company private.