SEC Charges DXC Technology with Misleading Non-GAAP Disclosures

SEC Charges DXC Technology with Misleading Non-GAAP Disclosures

The SEC has charged IT services company DXC Technology Company with making misleading financial disclosures related to its non-GAAP performance. The Commission’s order found that DXC misclassified tens of millions of dollars of expenses as non-GAAP adjustments and improperly excluded them from its non-GAAP earnings, resulting in the material overstatement of its non-GAAP net income in three fiscal quarters. In response, DXC consented to a cease-and-desist order, paid an $8 million penalty, and agreed to develop and implement appropriate non-GAAP policies and disclosure controls and procedures. The SEC took into account DXC's cooperation and remedial actions in deciding to accept the settlement offer.