Magazine article American Banker

Diebold Finance Chief Steps Down after SEC Probe

Magazine article American Banker

Diebold Finance Chief Steps Down after SEC Probe

Article excerpt

Byline: Daniel Wolfe

Diebold Inc. said Wednesday that the Securities and Exchange Commission has sent notices of possible civil action to some of its current and former employees, prompting one of the recipients, Kevin Krakora, to step down as chief financial officer.

The so-called Wells notices were sent to people who handled Diebold's finances during a period of several years for which the automated teller machine manufacturer has already restated its earnings. Wells notices are sent after an investigation but before an action is taken against an individual or company, giving recipients a chance to respond.

Diebold said in 2007 that it would change the way it recognizes revenue in response to an SEC investigation into its use of bill-and-hold accounting; under thisaccounting the company recognized revenue before shipping its products to customers.

Krakora, who remains with Diebold in a nonfinancial reporting role, became the North Canton, Ohio, company's CFO in August 2005 after Gregory T. Gesweinresigned to take the same post atReynolds and Reynolds Co., which provides technology to automotive dealerships. Geswein also received a Wells notice.

Diebold itself has not received a Wells notice, but spokesman Michael Jacobsen said Wednesday that it has approached the SEC to discuss its options in case it does.

"We're continuing to cooperate with the SEC in connection with the previously disclosed investigation," Jacobsen said. "As part of the process, we've had preliminary discussions with the SEC concerning resolution of the matter, including possibly entering into a settlement agreement, but it's still possible that the SEC will issue a Wells notice to the company."

In addition to Krakora and Geswein, the SEC has sent notices to other people who "had responsibility in the finance organization at the time, during the period in which those financials had to be restated," Jacobsen said, though he would not name the other individuals. …

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