US SEC charges IT services firm DXC for ‘misleading’ non-GAAP disclosures

FILE PHOTO: People exit the headquarters of the U.S. Securities and Exchange Commission (SEC) in Washington, D.C.

WASHINGTON (Reuters) – The U.S. Securities and Exchange Commission said on Tuesday it charged IT services firm DXC Technology with making misleading disclosures about its non-GAAP financial performance in multiple reporting periods from 2018 until early 2020.

“Without admitting or denying the findings in the order, DXC consented to a cease-and-desist order, to pay an $8 million penalty, and to undertake to develop and implement appropriate non-GAAP policies and disclosure controls and procedures,” the SEC said in a statement.

DXC materially increased its reported non-GAAP net income by negligently misclassifying tens of millions of dollars of expenses as non-GAAP adjustments, the SEC added.

(Reporting by Kanishka Singh in Washington; Editing by Chris Reese)