HP Inc will pay a $6 million civil fine to settle U.S. Securities and Exchange Commission charges it concealed efforts to boost sales of printing supplies in order to meet quarterly sales and earnings targets, Bloomberg reported .
The regulator said on Wednesday that some HP managers used incentives to accelerate, or “pull in,” sales they expected to materialize in later quarters.
SEC said HP managers in one region sold discounted supplies to distributors known to resell HP products outside their own territories, “cannibalizing” sales from local distributors and violating company policy.
The SEC said HP did not timely disclose to investors how these practices, which occurred in 2015 and 2016, were reducing margins and boosting inventories at the Palo Alto, California-based technology company.
On June 21, 2016, HP announced a plan to reduce inventories in its distribution channels, and projected it would reduce net revenue from supplies by $450 million over two quarters. HP’s share price fell 5.4 percent the next day.
“HP’s failure to disclose the foreseeable negative impact of its use of pull-ins and other sales practices created a misleading and incomplete picture of the company’s financial condition,” Melissa Hodgman, an associate director in the SEC enforcement division, said.
The PC and printer supplier did not admit or deny the SEC’s findings, and agreed to a cease-and-desist order.