The Securities and Exchange Commission is investigating EasyLink Services, a technology company whose audit committee previously included SEC Chairman William Donaldson.
Donaldson’s role at the $101.3 million company Services caused him to be recused from participating in any SEC enforcement action regarding the company.
Accounting irregularities, apparently involving revenue recognition, have recently surfaced at the Piscataway, N.J.-based technology company, prompting an inquiry by the SEC enforcement division.
According to the company, the SEC is reviewing transactions that were part of a former advertising network run by EasyLink. Specifically, the SEC is in part reviewing whether approximately $3 million in revenue "may be recognized under EITF 99-17, relating to accounting for advertising barter transactions."
Donaldson was never paid for his work at EasyLink, according to company filings, though his travel expenses were covered and he was given the option to buy company shares. After being chosen by President Bush last year to head the SEC, Donaldson sold his holdings in EasyLink and all other public company stocks.
The Commission released a statement last week explaining that he would have no role in any matter involving the company.
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