TheStreet.com and three former executives settled a Securities and Exchange Commission probe into accounting fraud at the company yesterday.
The SEC said the fraud occurred from 2008 to 2009 while slapstick CNBC stock picker Jim Cramer served as chairman of the financial website.
The SEC’s lawsuit claims the accounting fraud was aimed at making Cramer’s online darling at the time appear more successful.
In settling the troublesome probe, TheStreet.com didn’t admit or deny any guilt.
Cramer was not named in the suit.
The SEC said three former executives — ex-CFO Eric Ashman and former co-presidents Gregg Alwine and David Barnett — concocted fake sales contracts using crude cut-and-paste forged documents that were shuffled back and forth among several unidentified counterparties to give an appearance of growth and profits.
“Alwine and Barnett used crooked tactics, Ashman ignored basic accounting rules, and TheStreet failed to put controls in place to spot the wrongdoing,” said Andrew Calamari, director of the SEC’s New York office.
Those accounting shenanigans took place at the company’s former Promotions.com unit.
Cramer is the fourth-largest shareholder at TheSreet.com, and is a director but not an officer anymore. He’s listed only as an employee earning $1.6 million a year as a writer, filings said.
CEO Elisabeth DeMarse, barely a year at the helm, said the company did its own internal probe and cooperated with the SEC. “We are pleased to put this matter behind us.”