By Jonathan Stempel
NEW YORK (Reuters) - Two former Bankrate Inc <RATE.N> executives failed to persuade a federal judge to dismiss U.S. Securities and Exchange Commission claims that they fraudulently manipulated the consumer financial information provider's results to meet Wall Street forecasts.
U.S. District Judge Gregory Woods in Manhattan on Thursday said the SEC may pursue all its claims against former Chief Financial Officer Edward DiMaria, and all but one claim against former Director of Accounting Matthew Gamsey.
Lawyers for the defendants did not immediately respond to requests for comment.
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The SEC accused New York-based Bankrate, which reached a $15 million settlement last September, and the executives of using questionable accounting to boost revenue and understate expenses for the second quarter of 2012.
It said that in once instance, DiMaria threatened to "rip (the) head off" Bankrate's top credit card executive if $500,000 of improper revenue were not booked, while Gamsey reacted to an instruction to book that sum and $300,000 of insurance revenue by writing "seriously – oyyyyyyyyyyyyyy."
The SEC also said DiMaria sold $2 million of Bankrate stock at prices inflated by the improper accounting.
Both defendants said the accounting entries were immaterial and that the SEC did not show they intended to commit fraud.
But Woods said it was premature to infer that DiMaria was "merely pushing" his employees to portray Bankrate's performance in the best positive light.
"DiMaria's alleged conduct crosses the line from corporate officers' common practice of taking affirmative action to meet revenue, earnings, or profit estimates, to consciously, falsely creating the appearance that Bankrate was meeting its targets when he knew that was not the case," Woods wrote.
The judge also highlighted SEC allegations that Gamsey asked others to defend improper accounting entries, and lied to Bankrate's auditor about what he knew.
"Although DiMaria may have been the one pulling the strings, through his alleged actions Gamsey sought to make the alleged scheme succeed," Woods wrote.
Woods dismissed an SEC claim that Gamsey obtained money or property through the alleged misstatements.
The SEC did not respond to a request for comment.
The case is SEC v. DiMaria et al, U.S. District Court, Southern District of New York, No. 15-07035.
(Reporting by Jonathan Stempel in New York; Editing by Alan Crosby)