SEC charges QSGI CEO, former CFO over internal control failures

WASHINGTON, July 30 Wed Jul 30, 2014 3:37pm EDT

WASHINGTON, July 30 (Reuters) - U.S. regulators charged the chief executive and former chief financial officer of Florida-based computer equipment company QSGI Inc on Wednesday with misleading outside auditors and investors about internal control deficiencies over the company's finances.

The Securities and Exchange Commission said that QSGI CEO Marc Sherman is planning to fight the charges in the agency's in-house court. The company's former CFO Edward Cummings is settling the case, paying a $23,000 penalty and agreeing to a five-year ban from practicing as an accountant before the SEC.

The SEC alleges that the men violated provisions of the 2002 Sarbanes-Oxley law after they falsely certified in a 2008 report that they had disclosed all major deficiencies in the company's internal controls. The next year, the company filed for bankruptcy. (Reporting by Sarah N. Lynch; Editing by Eric Beech)

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