SEC Charges Former CFO of “Smart” Window Manufacturer, View Inc., for Failure to Disclose Company’s $28 Million Liability

The Securities and Exchange Commission has taken action against Vidul Prakash, the former Chief Financial Officer of View Inc., a California-based manufacturer specializing in “smart” windows. Prakash has been charged by the SEC for his negligent oversight, which resulted in the failure to disclose $28 million in projected warranty-related liabilities.

According to the complaint filed by the SEC in the U.S. District Court for the Northern District of California, View Inc. had previously disclosed warranty liabilities ranging from $22 million to $25 million in reports and statements submitted to the SEC between December 2020 and May 2021. These liabilities mainly comprised projected expenses for producing replacement windows to address defects. However, the complaint alleges that Prakash knowingly approved the disclosed amounts, despite being aware that they did not account for additional costs associated with shipping and installing the replacement windows. The complaint further asserts that when factoring in these additional costs, View Inc. should have disclosed total warranty liabilities between $48 million and $53 million. Consequently, View Inc. materially misrepresented its warranty liability for the fiscal years 2019 and 2020, as well as the first quarter of 2021.

The SEC’s complaint charges Prakash with violating Section 17(a)(3) of the Securities Act of 1933, Section 14(a) of the Securities Exchange Act of 1934, as well as Exchange Act Rules 14a-9 and 13b2-1. In response to these violations, the SEC is seeking permanent injunctions, civil penalties, and an officer and director bar.

The investigation by the SEC’s San Francisco Regional Office was conducted by Theis Finlev and Michael Foley under the supervision of Jason H. Lee.