Gradient issues negative report on UTStarcom in 2003; SEC files fraud charges against UTSI in 2008

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SCOTTSDALE, Ariz. – (Business Wire) Five years after Gradient Analytics first reported on UTStarcom (UTSI), the U.S. Securities and Exchange Commission has announced accounting fraud charges and a settlement fine against two UTSI executives for “false financial filings.”

Gradient Analytics initiated coverage of UTSI on Sept. 25, 2003, after finding that “insider selling activity ha[d] ballooned” at a time when the company was reporting “extremely high accruals… and anemic cash flows.” Gradient’s report also noted that, “despite a 77.4% increase in earnings, UTSI’s operating cash flow declined over 300% in the six months ended 06/30/03.” Continue reading