SEC: Former CEO Used $200K For Personal Perks; Polycom Pays $750K To Settle

The U.S. Securities and Exchange Commission has charged former CEO Andrew Miller of the San Jose, Calif.-based videoconferencing vendor Polycom with using $200,000 of corporate funding for personal perks, including luxurious travels with his friends and girlfriend.

"When I first heard, my mouth dropped. I said, 'Miller did what?' " said a top executive solution provider that partners with Polycom, who declined to go on record. "Obviously, it's never a good sign when a CEO of one of your vendors does this … but we do have full confidence in Polycom moving forward."

MarketWatch was the first to report the story.

[Related: Polycom: New Partner Program Is Less Complex, More Transparent]

The SEC is accusing Miller of creating hundreds of false expense reports with "bogus" business descriptions for his personal use to pay for meals, entertainment and gifts, according to the SEC complaint that was released on Tuesday. He allegedly used Polycom funding to travel with friends and his girlfriend to luxurious international resorts while falsely claiming the trips were business-related site inspections in advance of company sales retreats.

He allegedly hid the costs by directing a travel agent to bury them in fake budget line items, according to the complaint.

SEC separately charged Polycom in an administrative order finding that the company had inadequate internal controls and failed to report Miller's perks to investors. Polycom reached a settlement with the SEC and will pay $750,000 to settle civil charges without admitting or denying the SEC's findings, according to the complaint.

A Polycom spokesman said the issue was resolved in 2013 and it has no effect on the company today, but declined to comment further on the matter.

"It did throw a little of a monkey wrench in our business in 2013, but we got over it fairly quickly," said the executive.

In July 2013, CRN reported that Miller unexpectedly resigned as CEO, with shares plummeting the following day. The resignation came after an audit committee for Polycom's board of directors found "irregularities" in his expense reports. He was CEO of Polycom for three years.

PUBLISHED MARCH 31, 2015