Bally Settles with S.E.C., Former Execs under Scrutiny

25 September 2008

Bally Technology Inc., the casino equipment manufacturer, has reached a settlement with the United States Securities and Exchange Commission relating to financial statements filed in 2003 and portions of 2004 and 2005.

The settlement -- the terms of which were not disclosed -- included a cease-and-desist order requiring the company to remain in compliance with federal securities laws. The S.E.C. leveled no allegations of fraud against Bally, and no fines or other penalties were imposed.

In settling, Bally did not admit or deny the S.E.C.'s finding.

Meanwhile, the S.E.C. has filed an enforcement complaint in Federal District Court against two of the company's former executives, which alleges they artificially inflated revenue and earnings information.

Steven M. Des Champs and Martha W. Vlcek, the Las Vegas company's former chief accounting officer and vice president of finance, respectively, are accused by the S.E.C. of making "misleading disclosures and omissions regarding revenue recognition and made materially false statements to the company's outside auditors when they represented the transactions were proper," according to court documents filed in Nevada.

Bally is not party to the complaint.