Yesterday, the SEC filed a case against SafeNet, Inc., its former CEO and CFO, and three former SafeNet accountants alleging two fraudulent schemes — one involving the backdating of options and the other earnings management. Notably, the SEC stated that the case was the first enforcement action brought by the agency pursuant to Regulation G, which applies when “a company subject to the periodic reporting requirements under Section 13(a) or 15(d) of the Exchange Act of 1934, or a person acting on the company’s behalf, discloses publicly any material information that includes a ‘non-GAAP financial measure.’”

Mike MacPhail, a partner with Holme Roberts & Owen in Denver who formerly was a Deputy Assistant Director in the SEC’s Division of Enforcement, joined me below to discuss the SafeNet case, and what it means for issuers.