Milwaukee-based medical software company, Merge Healthcare Incorporated, and two of its former executives have agreed to settle charges of accounting fraud brought by the Securities and Exchange Commission. The company's stock price plummeted by two-thirds over seven months after the fraud was uncovered, costing Merge more than $500m (£301m) in market capitalisation. Richard Linden, Merge's former chief executive, and Scott Veech, the former chief financial officer, have agreed to settle the charges. But they have not admitted or denied the charges brought against them. The SEC alleged that the two manipulated the accounts of Merge Healthcare Incorporated, resulting in recognising revenue from sales which had not yet been completed. Linden has also been accused of interfering with the audit confirmation process by telling the company's sales staff to inform its customers to not disclose any side agreements they had with the company to its external auditor, with Veech's knowledge. According to the SEC, the two men signed at least 30 false management representation letters between them, which were submitted to Merge's external auditor. 'Linden and Veech went to deliberate lengths to disguise the timing and truth behind the sales of their software products and enhancements,' said Merri Jo Gillette, director of the SEC's Chicago regional office.'The company's weak and ineffective internal controls allowed these corporate executives to carry out the fraud.' Linden will pay a total of $590,000 as part of the settlement, while Veech is paying $280,000. They have been barred from serving as officers and directors of a public company for five years. Veech has also consented to an administrative order that suspends him from appearing or practising before the SEC as an accountant.