SAN FRANCISCO, USA: The United States Securities and Exchange Commission (SEC) has charged two former executives of Tvia Incorporated, the semiconductor vendor based in Santa Clara, California, the United States, with having "improperly inflated" the company's financial results.

According to the SEC, Benjamin Silva III, a former vice-president (sales) for Tvia, made "side deals" with customers and concealed the terms from the company's executives and auditors. This led to Tvia fraudulently reporting millions of dollars in surplus revenue.

The charge against Diane Bjorkstrom, a former chief financial officer at Tvia, is that she too played a role in fraudulent accounting – resulting in allowing the company to recognize revenue on merchandise shipped to a customer even weeks before that customer had actually agreed to accept the merchandise.

The SEC also alleged that Diane Bjorkstrom failed to act on "red flags" surrounding the misconduct of Silva.

Diane Bjorkstrom, according to a statement from the SEC, has agreed to settle the charges against her by paying a fine of $20,000. It was without either admitting or denying the charges that she agreed to pay the penalty as well as accepted a ban on her from appearing or practicing before the SEC as an accountant for a period of 2 years.

In a complaint filed in the federal District Court in San Jose, California, the SEC alleged that the agreements entered into by Benjamin Silva inflated his company's revenue by about $5 million from September 2005 through June 2006. This led to Tvia's quarterly revenue being constantly overstated – including a rise of as much as by 165% in a single quarter.

Silva gained $300,000 through the cashing in of award options tied to revenue goals, according to the SEC.