A Connecticut industrial lighting company has been fined $1.25 million by the Securities and Exchange Commission (SEC) for falsely booking $55 million worth of sales on its financial statements over four years. Four company executives have been fined as well.

Revolution Lighting of Stamford, Conn., improperly used “bill and hold” procedures from 2014 to mid-2018, booking revenue from the sale of industrial lighting equipment for large construction projects without actually shipping it to the customer, the SEC said in its complaint filed Thursday. From 2014 to 2016, bill and hold sales represented 6 percent of Revolution’s revenue, the SEC said.

Company CEO Robert LaPenta and former Chief Financial Officer James DePalma pressured two other employees, Allen Garner and Daniel O’Neal, to create more than 200 “bill and hold” transactions for sales booked as revenue in a way that broke securities laws and in a manner that violated the firm’s own revenue recognition policies. LaPenta and DePalma also pressured the employees to alter some documents and mislead independent auditors, the SEC said.

Revolution and its subsidiary, Value Lighting, had run into a revenue problem in 2014, the SEC said. When construction projects overseen by its customers were delayed, Revolution would be stuck with industrial lighting goods it had ordered from its suppliers in China. LaPenta and DePalma wanted to apply revenue from those delayed sales on the company’s financial statements, long before the products would actually be shipped to the customers.

More than 200 times over four years—and on 30 financial statements—Revolution booked incomplete sales on its books by improperly booking them as “bill and hold” sales, according to the SEC.

“Companies are required to provide accurate disclosures of material information so that investors are able to understand and evaluate the company’s businesses,” said Paul G. Levenson, of the SEC’s Boston Regional Office, in a press release. “We are committed to holding accountable issuers and their officers who provide the public with materially inaccurate financial reports.”

For a bill and hold sale to count as revenue, the customer must actually pay for the goods and agree to have them stored by the seller. Most of Revolution’s customers who experienced delays in their construction projects did not have the revenue or inclination to do this, the SEC said.

Revolution would attempt to get the customer to sign an agreement to receive an invoice in exchange for having Revolution store the goods at Revolution’s warehouse. Many customers did not sign the agreements at all, while others signed them months after Revolution had already counted the revenue from the sale on its financial statements. Even so, an agreement to receive an invoice is not enough to count the sale as revenue, according to Generally Accepted Accounting Practices (GAAP) and the company’s own policy.

Booking bill and hold sales this way, in addition to inflating the company’s quarterly financial statements, had the added bonus of allowing the company to borrow more money from its lenders. Banks would only lend money to the company on 20 percent of the value of unsold inventory, but on up to 85 percent on its account receivable balance, which represents money owed by customers who had been billed.

To hide its scheme, Revolution “misled its independent auditor and hid the company’s revenue recognition practices from it,” the complaint said.

In addition to the fine against the firm, the SEC issued an individual fine against LaPenta for $192,000; against DePalma for $100,000; and against Garner and O’Neal for $25,000 each for their roles in improperly inflating the company’s revenue.