SEC weighing Quovadx charges

By Roger Fillion
Rocky Mountain News
January 7, 2006

U.S. securities regulators appear to be weighing civil charges against former senior officials of Quovadx Inc. based on the Greenwood Village software firm's accounting methods. Sources familiar with the Securities and Exchange Commission investigation said the agency signaled last year it planned to bring charges by sending "Wells notices" to a number of former Quovadx officials.

A Wells notice is a written statement from the SEC that it intends to sue. According to one source, notices were sent to former Quovadx CEO Lorine Sweeney, former CFO Gary Scherping, former Executive Vice President David Nesvisky and a former midlevel sales manager, Ronald Renjilian. It's unclear whether the SEC will follow through by filing charges against any or all of the individuals.

If charges are filed, it's not yet certain what they might involve. Quovadx's accounting methods came under investigation in 2004 after the once high-flying company recorded $14.1 million worth of software sales to an India- based outsourcing consortium. Quovadx booked the sales to Infotech Network Group as done deals. But Infotech ultimately failed to pay. One of the sales, worth $7.6 million, was a record for Quovadx.

John Heine, an SEC spokesman in Washington, declined to comment on the Wells notices. They are the first indication the SEC may be preparing charges in the Quovadx case...