The regulatory agency said it decided not to impose any civil penalties against View, however, “because the company self-reported the misconduct to the SEC, promptly undertook remedial measures, and cooperated with the staff’s investigation.”
“We are committed to imposing remedies that both hold market participants accountable and deter future violations,” said Monique 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 penalties or even no penalties at all.”
View Window’s Violations
According to the SEC order, in a series of reports and statements filed with the SEC from December 2020 to May 2021, “View disclosed warranty liabilities of $22 million to $25 million, consisting largely of projected costs to manufacture replacements for certain defective windows. However, View failed to include in its disclosures the additional cost to ship and install the new windows, which View had decided to cover and which, therefore, should have been disclosed under U.S. generally accepted accounting principles, the SEC stated.
Including those costs, View should have disclosed total warranty liabilities of $48 to $53 million. Consequently, the SEC found that View “materially misstated its warranty liability for fiscal years 2019 and 2020 and the first quarter of 2021.”
The SEC also found that View violated negligence-based antifraud, proxy disclosure, reporting, books and records, internal accounting controls, and disclosure controls provisions of federal securities laws. Without admitting or denying the SEC’s findings, View agreed to cease and desist from future violations of the charged securities laws.
The SEC also brought charges against Vidul Prakash, View’s former chief financial officer, for failing to ensure that the warranty-related liabilities were disclosed. The SEC’s complaint against Prakash, filed in the U.S. District Court for the Northern District of California, charges him with “violating negligence-based antifraud, proxy disclosure, and books and records provisions of the federal securities laws and seeks permanent injunctions, civil penalties, and an officer and director bar.” 
Jaclyn Jaeger is a contributing editor at Compliance Chief 360° and a freelance business writer based in Manchester, New Hampshire.