YOU ARE HERE: LAT HomeCollections

Auditor Flags 2 of Comparator's Financial Statements

Earnings: Company that recently settled SEC suit is told 1995 and 1996 reports need substantial revisions.


NEWPORT BEACH — Comparator Systems Corp. has been informed by its auditors that "potentially material adjustments may be required to correct" the company's fiscal 1995 financial statements, according to a document filed with the Securities and Exchange Commission.

The controversial Newport Beach company, which last week settled a lawsuit filed by the SEC, also faces "significant changes" to the earnings statements included in its 1996 financial report, according to a filing submitted to the SEC on Thursday.

Gregory Armijo, the company's former vice president, declined to elaborate on the nature of the "material adjustments" that may be required.

The SEC had accused Comparator of lying about its assets in a sweeping lawsuit filed by the agency in May after the company set three trading volume records on the Nasdaq stock market.

Comparator, which makes electronic fingerprint scanning devices, settled that suit last week without paying fines or admitting any wrongdoing. But two of the company's top executives, including chief executive Robert Reed Rogers and Armijo, were barred from ever serving as officers or directors of any public company.

Armijo, who is still serving as a consultant to Comparator, said Thursday's filing was necessary because the company has had to replace its outside auditor. The company's previous auditor, the Eli Buchalter Accountancy Corp., has been barred from working as an accountant for publicly traded companies.

Comparator has replaced Buchalter with the accounting firm Farber & Hass, and Thursday's filing was made to request an extension of the deadline for submitting its fiscal 1996 financial report, Armijo said.

Los Angeles Times Articles