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Naming its investor relations officer for specifically standing in the way of proper disclosure, the Securities and Exchange Commission has hit Sony Corp. with a massive fine for failing to dutifully report negative financial news.
Sony agreed to pay $1 million, a penalty equal to the largest ever levied by the SEC for disclosure violations, as well as agreeing to take three extraordinary steps to ensure its future financial disclosure meets required levels.
Sony, which settled the case with the SEC, was accused of failing to note in two quarterly earnings reports and in the management's discussion and analysis of a subsequent annual report the nature of business losses in its Sony Pictures subsidiary.
According to the SEC, during the four months preceding Sony's November 1994 write-down of about $2.7 billion of goodwill associated with the acquisition of its Sony Pictures subsidiary, Sony made inadequate disclosures regarding the nature and extent of losses in the picture unit and their impact on the consolidated results Sony was reporting. Sony also failed to note any trouble in its annual report for the fiscal year ended March 31, 1994.
Additionally, the commission found that during this same period, Sony did...