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Tuesday
Jul022013

Digi ex-CFO settles with SEC

The SEC on Tuesday said Subramanian Krishnan, the former CFO of Digi International, Inc., agreed to settle civil charges that he evaded internal controls to pay for unauthorized travel and entertainment expenses.

He was first charged in September in federal court in Minnesota with multiple offenses under the books and records and internal controls provisions of the FCPA.

Minnesota-based Digi develops wireless networking solutions. It trades on the NASDAQ Global Select Market under the symbol DGII.

In the SEC's complaint, the agency said Krishnan created a system allowing Digi employees in its Hong Kong regional office to be reimbursed for personal expenses, including hotel and entertainment expenses, without approval by the CEO, 'as required by company policy.'

Krishnan's actions resulted 'in the filing of inaccurate reports and accompanying certifications in Digi’s annual quarterly reports from March 2005 through May 2010,' the SEC said.

Krishnan approved cash payments in the Hong Kong office, the SEC said, that weren't supported by documentation or explanation. The complaint didn't specify how Krishnan or other Digi employees used the fraudulently obtained reimbursements.

In Tuesday's action, he was ordered to pay a $60,000 civil penalty.

Previously the SEC barred him from serving as an officer or director of any issuer.

View SEC Litigation Release No. 22741 in SEC v. Subramanian Krishnan (July 2, 2013) here.