Employment Law Attorneys

Bad Boy Executives at Interspeed, Inc.2 min read

On June 5, a federal grand jury in Boston, Massachusetts indicted Arthur
A. Goodwin of Plano, Texas on eight counts of securities and wire fraud
for his role in falsifying his company’s financial results. Goodwin was
the former senior vice president of sales at Interspeed, Inc., a now
defunct North Andover, Massachusetts Internet hardware developer.
According to the indictment, Goodwin entered into secret side letter
agreements with customers that provided the customers the right to
return the goods purportedly sold to them; altered a sales contract for
what would have been the company’s largest sale in its history; and took
other steps to hide the fraudulent nature of sales transactions he
arranged. Goodwin’s actions, the indictment alleges, resulted in
Interspeed overstating its revenue by approximately $9 million, or 60%
of the company’s reported revenue for the first thee quarters of its
fiscal year ended Sept. 30, 2000. Goodwin faces up to 20 years
imprisonment on each securities fraud count, imposition of a fine and an
order of restitution to defrauded investors.
In a parallel criminal information filed June 5, William J. Burke,
Interspeed’s former chief financial officer, was charged with knowingly
withholding information from Interspeed’s outside auditors during the
auditors’ July 2000 review of Interspeed’s quarterly financial
statements. Burke has agreed to plead guilty to one count of
falsification of Interspeed’s books, records and accounts. He faces up
to 10 years imprisonment, a fine and an order of restitution.
The Commission previously filed a civil injunctive action for financial
fraud against Goodwin, Burke and another former officer of Interspeed,
Inc., based on the conduct charged in the indictment. The Commission’s
litigation is ongoing. In that action, the Commission seeks, among
other things, an order permanently barring Goodwin and Burke from acting
as officers or directors of any public company. [U.S. v. Arthur A.
Goodwin, USDC, District of Massachusetts, C.A. No. 03-CR-10197-RGS];
[U.S. v. William J. Burke, USDC, District of Massachusetts. C.A. No. 03-
CR-10199-GAO] (LR-18180)
SEC NEWS DIGEST JUNE 9, 2003 Issue 2003-109