GT Advanced Technologies and its former CEO have settled allegations that they misled investors about its performance of a contract to supply Apple with sapphire glass for iPhones, CFO.com reported. The U.S. Securities and Exchange Commission said GT knew by late April 2014 that it had failed to meet quantity, quality, and delivery standards under the contract, resulting in Apple withholding the final $139 million installment payment and giving it the right to accelerate repayment of the $306 million previously advanced to GT. But in August 2014, CEO Thomas Gutierrez told analysts in an earnings call that GT expected to receive the final payment by the end of October 2014. Weeks later, the company filed for chapter 11 protection. The contract had been a major coup for GT, representing what the SEC called a game-changing event that was “material to GT’s revenue and reported liabilities and how its stock was valued.” As part of a settlement of civil securities fraud charges, Gutierrez agreed to pay $140,000 in civil penalties, disgorgement and prejudgment interest.
