Google lawyer to pay $700K to settle SEC case
EmptySAN FRANCISCO -- Google Inc.'s top in-house lawyer, David Drummond, has agreed to pay $700,000 to settle a Securities and Exchange Commission complaint alleging he helped mislead investors while overseeing the finances of his previous employer, SmartForce.
The arrangement announced Thursday resolves an investigation that surfaced just before Google went public in August 2004.
The SEC had alleged Drummond helped SmartForce exaggerate its revenue by $113.6 million and its profit by $127 million during a 3 1/2-year period ending in mid-2002. At the time, Drummond was SmartForce's chief financial officer.
Drummond, who remains Google's chief financial officer, didn't admit any wrongdoing in the settlement.
But his attorney, Harvey Wolkoff, released a statement acknowledging Drummond "would have better served in his role at SmartForce had he possessed an accounting background. However, it was not unusual during this period in time to find many CFOs like David who were not trained as accountant, but instead were hired for their expertise in other important corporate functions."
Drummond should have no trouble paying the settlement because he holds Google stock and stock options worth tens of millions of dollars. He is also eligible for a bonus of up to $4.5 million this year besides his $450,000 salary, according to SEC filings.
The SEC also reached settlements with three other former SmartForce employees and the company's former auditor, Ernst & Young Chartered Accountants.