Gateway Settles With the SEC, Former Executives Charged with Fraud

Struggling PC maker Gateway has settled a US Securities and Exchange Commission (SEC) investigation that charged several former company executives with fraud. Apparently, former CEO Jeffrey Weitzen, former Senior Vice President and chief financial officer (CFO) John Todd, and former Controller Robert Manza admitted to the SEC that to meet financial expectations they cooked Gateway's books in 2000, opening the company to a mountain of debt. The scheme involved financing customers who had previously been denied financing because of credit problems and manipulating the company's financial statements. Gateway replaced its top management in early 2001, when founder Ted Waitt returned to the company helm, and the company recently restated its earnings for the period in question. Today, the bruised company is hoping a recent move into consumer electronics will revive its fortunes.