SEC Settles Claims Against Two Former Employees of Hansen Medical, Inc. Relating to Fraudulent Sales Scheme
The United States District Court for the Northern District of California has approved settlements resolving claims by the Securities and Exchange Commission against two former sales executives of Hansen Medical, Inc., a Mountain View, California medical equipment company. The SEC's complaint alleged the former sales executives participated in fraudulent sales transactions to inflate the company's reported revenues.
The SEC's complaint alleged that Christopher Sells, Hansen Medical's former Vice President of Commercial Operations, and Timothy Murawski, a former Vice President of Sales, took steps to complete improper sales transactions in 2008 and 2009. According to the Complaint, Mr. Sells and Mr. Murawski engaged in a scheme to provide false information to Hansen Medical's finance department, resulting in publicly-disclosed financial statements that reported overstated revenue and sales numbers.
Without admitting or denying the allegations, Mr. Sells agreed to pay a civil money penalty of $85,000. The final judgment, entered by the District Court on February 21, 2014, permanently enjoins Mr. Sells from violating Sections 10(b) and 13(b)(5) of the Securities Exchange Act of 1934 and Rules 10b-5, 13b2-1 and 13b2-2 thereunder, and Sections 17(a)(1) and 17(a)(3) of the Securities Act of 1933, and from aiding and abetting violations of Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act and Rules 12b-20, 13a-1, and 13a-13 thereunder. The judgment also prohibits Mr. Sells from acting as an officer or director of a public company under the Exchange Act for five years.
Without admitting or denying the allegations, Mr. Murawski agreed to pay a civil money penalty of $35,000. The final judgment, entered by the District Court on November 6, 2013, permanently enjoins Mr. Murawski from violating Sections 10(b) and 13(b)(5) of the Exchange Act and Rules 10b-5(a), 10b-5(c), and 13b2-1 thereunder, and Sections 17(a)(1) and 17(a)(3) of the Securities Act, and from aiding and abetting violations of Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act and Rules 12b-20, 13a-1, and 13a-13 thereunder.
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