SEC charges smart-window maker View, ex-CFO over accounting fraud

By Jonathan Stempel

(Reuters) – The U.S. Securities and Exchange Commission (SEC) on Monday charged View Inc and a former chief financial officer for understating the costs of replacing defective “smart” windows, leading to a restatement.

View won’t have to pay a fine because it reported the error, took remedial action and cooperated with the SEC. It did not admit or deny wrongdoing.

Former CFO Vidul Prakash, 55, was charged in San Francisco federal court with negligence-based fraud, disclosure and books and records violations between Dec. 2020 and May 2021.

View is based in Milpitas, California, and went public through a $1.6 billion merger in March 2021 with a Cantor Fitzgerald-backed special-purpose acquisition company.

The case arose from a defective sealing component in View’s smart windows, whose panes adjust the tint in response to the sun, and which are often used in office buildings.

According to the SEC, View disclosed $22 million to $25 million of liabilities, largely for manufacturing replacement windows, but should have disclosed $48 million to $53 million of liabilities, incorporating shipping and installation costs.

The SEC said Prakash was told multiple times that View would pay for shipping and installation, but failed to have staff assess whether the costs were probable and could be reasonably estimated, which would require disclosure.

In Nov. 2021, View said it would restate more than two years of financials, and replaced Prakash as CFO.

View, Prakash and their respective lawyers did not immediately respond to requests for comment.

The share price of View has fallen 99% since the SPAC merger closed. In Monday morning trading, the shares were little changed at 12 cents.

The company asked shareholders last month to approve a reverse stock split.