SEC: Polycom ex-CEO hid perks from investors

Former Polycom (PLCM) CEO Andrew Miller used nearly $200,000 in corporate funds for personal perks he hid from investors, a federal regulator charged Tuesday.

Miller, 55, used the funds to pay for lavish meals, foreign and domestic travel, clothing, gifts and entertainment for himself, his relatives and friends in an alleged scheme that ran from 2010 to 2013, the Securities and Exchange Commission alleged.

The former executive allegedly hid the personal nature of the expenses by fabricating expense reports or directing administrative assistants to prepare reports that showed the spending involved official business for the Silicon Valley-based maker of video and voice communication technology.

The SEC separately reached a $750,000 settlement with Polycom over inadequate internal controls involving the expenses.

Shares of Polycom were down fractionally at $13.32 in Tuesday afternoon trading.

"CEOs are stewards of corporate assets and must be held to the highest standard of honesty and integrity," said Andrew Ceresney, director of the SEC's enforcement division. "We will not hesitate to charge executives with fraud when they allegedly use a public company as a personal expense account and hide it from investors."

Attorneys represent Miller in the civil securities fraud case the SEC filed in San Francisco federal court did not immediately respond to messages seeking comment.

Polycom, which neither admitted nor denied the SEC allegations, declined to comment on the settlement.

According to the SEC complaint, Miller ran up $190,000 in company-paid perks before Polycom's audit committee confronted him about the scheme, leading to his resignation. The spending was not disclosed to company investors.

For instance, Miller allegedly he directed his administrative assistant to buy him two tickets to an August 2012 performance of Broadway hit Musical Jersey Boys in New York City. He received reimbursement for the $576.20 cost by falsely claiming the tickets were used as a prize for Polycom's New York sales office, the complaint alleged.

Instead, Miller attended the show with his girlfriend, the SEC charged.

Along with the tickets, Miller received reimbursement for more than $275 to his company credit card for dinner with his girlfriend after the musical, the SEC complaint alleged.

The former CEO allegedly concealed additional perks in connection with Polycom's "CEO Circle" awards program, an annual incentive trip the company offered to top performing sales people.

Polycom's 2012 incentive trip was scheduled to take place in Bali, Indonesia. Months before the event, Miller allegedly used Polycom funds to pay for a nine-night trip to the location for himself and several friends. The trip was described in the company's budget as a purported "site inspection," the SEC complaint said.

However, Miller and his friends "enjoyed a full mock-up" of the upcoming CEO Circle awards event, plus two free days of additional sightseeing and activities, the SEC charged.

Polycom's April 2013 proxy filing reported that Miller had received company-paid perks totaling $31,430 during the 2012 fiscal year. The proxy statement was "materially false and misleading" because it omitted nearly $116,000 in additional perks Miller received, the SEC complaint said.