SEC Settles with View Inc. on Disclosure Failures, Charges Former CFOJuly 10th, 2023 by Joshua Huff
The Securities and Exchange Commission (SEC) announced it settled charges against View Inc. for failing to disclose $28 million in projected warranty-related liabilities. The SEC also reported that it has charged View’s former chief financial officer Vidul Prakash for failing to tell investors about liabilities before the company went public in 2021. View Inc. is a producer of “smart,” electronically tinted windows that utilize artificial intelligence to control heat gain.
The SEC chose not to impose civil penalties against View due to the company self-reporting its failure to disclose liabilities regarding a sealing component defect in its windows. The department states that View “promptly undertook remedial measures and cooperated with the staff’s investigation.”
“We are committed to imposing remedies that hold market participants accountable and deter future violations,” says Monique C. Winkler, director of the SEC’s San Francisco regional office. “At the same time, as this resolution demonstrates, there are real benefits to parties that meaningfully cooperate with the SEC’s investigations, including reduced or even no penalties at all.”
The SEC writes that View reported warranty liabilities of $22 million to $25 million to the SEC between December 2020 to May 2021. The liabilities pertained mostly to projected costs to manufacture replacements for certain defective windows. However, View failed to include the additional cost of shipping and installing the new windows. SEC officials say that View should have reported total warranty liabilities of $48-$53 million.
As a result, the SEC writes that View violated negligence-based antifraud, proxy disclosure, reporting, books and records, internal accounting controls and disclosure controls provisions of the federal securities laws. View did not admit or deny wrongdoing.
The SEC’s complaint against Prakash charges him with violating negligence-based antifraud, proxy disclosure and books and records provisions of the federal securities laws. The SEC seeks permanent injunctions, civil penalties and his disbarment as an officer and director. The complaint was filed in the U.S. District Court for the Northern District of California.
The SEC’s settlement announcement follows the dismissal of a federal securities law violation lawsuit against View filed in 2021 by Stadium Capital LLC. The lawsuit alleged that View made material misrepresentations to investors in, among other filings with the U.S. Securities and Exchange Commission, its Dec. 23, 2020, de-special purpose acquisition company (SPAC) statement.
In her ruling to dismiss, U.S. District Judge Beth Labson Freeman determined that Stadium Capital—formerly known as CF Finance Acquisition Corp. II—did not specifically allege in the lawsuit that it acquired shares of View in connection with any specific statements from its SPAC registration statement or other referenced filings.