There’s a big ol’ mess going on over at Cadence Design Systems in San Jose — and the company’s longtime former GC has resigned.
Cadence, which makes tools used to produce integrated circuits and the like, announced last week that it had a revenue recognition problem and would have to make a restatement. Apparently, $24 million that the company counted as revenue from sales contracts in the first quarter of 2008 should’ve been recorded over the life of the contracts.
Resignations and class actions, after the jump:
A week before the announcement, a bunch of senior execs resigned, including R. L. Smith McKeithen, who was the company’s general counsel for 10 years from 1998 till last April, when he was promoted to Executive Vice President of Corporate Affairs. Besides Smith McKeithen, the president and CEO and three other executive left the company.
To add to that, stockholders filed a securities class action this week in San Francisco Federal Court alleging that the company overstated its revenue. The suit was filed by Millberg lawyers in Los Angeles and Dyer & Berens from Denver.
Wilson Sonsini is handling the internal investigation for Cadence, according to a source familiar with the situation.
Seems likely this'll attract the SEC's attention, but the agency declined to comment on whether or not it was investigating Cadence.
— Zusha Elinson