Former McAfee CFO Convicted for Fraud
The former chief financial officer for software manufacturer McAfee Inc., Prabhat Goyal, was convicted of 15 counts of securities fraud last week. Goyal acted as the vice president and CFO of McAfee, which formerly was known as Network Associates, until an accounting scandal forced his resignation. McAfee agreed to pay $50 million in January 2006 to settle the accounting fraud charges.
Goyal is believed to have caused Network Associates to make payments to its distributors disguised as discounts, rebates, and marketing fees. These payments caused the distributors to engage in channel stuffing, which meant they held excess inventory, not returning unsold products and purchasing more products than they actually could sell.
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