Datasets:

codewithdark
/

SEC-RPT-Panel

+UNITED STATES OF AMERICA
+Before the
+SECURITIES AND EXCHANGE COMMISSION
+SECURITIES EXCHANGE ACT OF 1934
+Release No. 53236 / February 7, 2006
+ACCOUNTING & AUDITING ENFORCEMENT
+Release No. 2370 / February 7, 2006
+ADMINISTRATIVE PROCEEDING
+File No. 3-12173
+In the Matter of
+CUMMINS INC.,
+Respondent.
+ORDER INSTITUTING CEASE-AND-DESIST
+PROCEEDINGS, MAKING FINDINGS, AND
+IMPOSING A CEASE-AND-DESIST ORDER
+PURSUANT TO SECTION 21C OF THE
+SECURITIES EXCHANGE ACT OF 1934
+I.
+ The Securities and Exchange Commission (“Commission”) deems it appropriate that cease-
+and-desist proceedings be, and hereby are, instituted pursuant to Section 21C of the Securities
+Exchange Act of 1934 (“Exchange Act”), against Cummins Inc. (“Cummins” or “Respondent”).
+II.
+ In anticipation of the institution of these proceedings, Respondent has submitted an Offer
+of Settlement (the “Offer”) which the Commission has determined to accept.  Solely for the
+purpose of these proceedings and any other proceedings brought by or on behalf of the
+Commission, or to which the Commission is a party, and without admitting or denying the findings
+herein, except as to the Commission’s jurisdiction over it and the subject matter of these
+proceedings, which are admitted, Respondent consents to the entry of this Order Instituting Cease-
+and-Desist Proceedings, Making Findings, and Imposing a Cease-and-Desist Order Pursuant to
+Section 21C of the Securities Exchange Act of 1934 (“Order”), as set forth below.
+III.
+ On the basis of this Order and Respondent’s Offer, the Commission finds that:
+A.  RESPONDENT
+ Cummins Inc., an Indiana corporation headquartered in Columbus, Indiana, manufactures,
+distributes, and services engines and engine-related products world-wide.  Cummins’ common
+stock is registered with the Commission under Section 12(b) of the Exchange Act.  Cummins’
+stock trades on the New York Stock Exchange and Pacific Stock Exchange under the symbol
+“CMI.”  The company’s fiscal year ends on December 31.
+B. FACTS
+ From 1997 through 2002, Cummins failed to reconcile key accounts at two manufacturing
+locations, in Fridley, Minnesota and Darlington, United Kingdom.  These manufacturing locations
+together accounted for approximately fifteen to twenty percent of Cummins’ total revenues.
+Because Cummins failed to reconcile these accounts, errors in the accounts went uncorrected.  The
+errors had a material impact on Cummins’ previously-reported results.  On August 4, 2003,
+Cummins restated its financial results for the years 2000 through 2002 to correct these and other
+errors.
+ Fridley’s Reconciliation Deficiencies
+The reconciliation deficiencies at the Fridley facility, which were the primary cause of the
+accounting errors, began as early as 1997.  Cummins’ accounting policies at the time required that
+each manufacturing plant reconcile its major accounts, including accounts payable, on a monthly
+basis.  At the Fridley location, however, the staff failed to reconcile its accounts payable subsidiary
+ledgers to the general ledger between 1997 and 2002.  Instead, they simply rolled forward the
+accounts payable balance reflected in the general ledger account each month without investigating
+or reconciling the differences between subsidiary ledgers and the general ledger.  Cummins’
+internal auditors cited the Fridley location in 1997 and 1998 for failing to reconcile its subsidiary
+ledgers for the accounts payable accounts to the general ledgers on a regular basis.  In fact, each
+year during the period from 1997 to 2001, Cummins’ internal audit reports recommended that
+Cummins institute a monitoring process to ensure the proper reconciliation of key accounts.
+However, Cummins did not institute a monitoring system until 2001.
+In 1998 and 1999, Cummins took two actions to address unrelated matters that had the
+unintended effect of exacerbating the accounts payable problem at the Fridley facility.  First, partly
+in response to Y2K concerns, as well as to consolidate and standardize financial systems and
+processes, Cummins began implementing a new management information software system.
+Fridley was one of the first locations to implement the new system, beginning in 1998 and
+continuing into 1999.  However, Cummins did not adequately train Fridley’s employees on the
+new system.  Because the Fridley employees did not understand how the new system worked, they
+created “work around” procedures to fix what they perceived to be problems with the new system
+and its implementation.  These ad hoc “work arounds” introduced additional errors into the
+ 2
+accounts payable system.  Because Fridley was not reconciling its accounts payable accounts,
+however, Fridley did not identify and correct these errors.
+Second, during 1998 and 1999, Cummins underwent a major restructuring that, among
+other things, resulted in the departure of a significant portion of Cummins’ financial and
+accounting staff.  The exodus of experienced finance personnel particularly affected the Fridley
+location and further complicated the intermittent efforts to reconcile Fridley’s accounts.  During
+this period, Cummins also consolidated its accounting functions, relocating most of the accounting
+functions, including the reconciliation of accounts payable, from Fridley to a Cummins’ office in
+Nashville.  However, a misunderstanding between the Fridley and Nashville offices led each to
+believe that the other was responsible for reconciling the accounts payable accounts.  Due to this
+misunderstanding, reconciliations were not performed on Fridley’s accounts payable accounts from
+1999 through at least part of 2002.  In addition, Fridley changed controllers three times between
+2000 and 2001, further compounding the internal controls breakdown.1
+In 1999, Cummins’ independent auditor noted in its letter to the Audit Committee several
+problems with reconciliations and internal controls throughout Cummins.  In response to these
+findings, Cummins began a targeted review of various accounts.  The year-long effort, which was
+assisted by Cummins’ independent auditors, resulted in a $44 million charge to earnings in 2000.
+The effort did not address the problems at Fridley, however.  Thereafter, to address concerns with
+reconciliations company-wide in 2001, Cummins created a corporate quality assurance position to
+investigate all balance sheet accounts, with particular emphasis on internal controls and
+unreconciled accounts.  Additionally, Cummins required that all business units periodically submit
+reports on designated accounts to the quality assurance manager, providing information on the
+status of their balance sheet reconciliations.  Fridley reported the deficiencies in its accounts
+payable reconciliation to the quality assurance manager in August 2001.  However, because the
+Fridley controller at the time had been on the job for only a month, Cummins’ corporate controller
+gave Fridley a grace period of several months in which to correct the reconciliation errors.
+Although Cummins corrected many of the reconciliation deficiencies at other locations,
+Cummins failed to devote sufficient resources to correct the reconciliation problems at Fridley.
+During most of the period from mid-2001 to the end of 2002, Fridley had only one full-time
+consultant and one full-time employee working on the reconciliations.  By 2001, the accounts
+payable accounts at Fridley had not been reconciled for at least four years, and the limited staff
+working on the issue – who lacked experience with accounts payable – was unable to identify,
+segregate, and correct the improper entries recorded in or missing from the accounts payable
+subsidiary ledgers or the general ledger accounts.  Thus, the reconciliation remediation process
+stretched into the fourth quarter of 2002 without completion.
+In August 2002, following the passage of the Sarbanes-Oxley Act of 2002, Cummins
+corporate management directed that all unreconciled accounts be reported to corporate
+headquarters and reconciled by year-end 2002.  Faced with this deadline, Fridley reported to the
+corporate office in late October 2002 that its accounts payable accounts remained unreconciled, but
+1  The controller at each Cummins facility is the person responsible for accounting
+procedures and internal controls at that location.
+ 3
+indicated that it expected no material impact upon income.  At the end of December 2002,
+however, Fridley personnel completed their analysis of the unreconciled accounts and determined
+that the problem was much larger than originally expected.  On January 3, 2003, Fridley reported
+to Cummins corporate senior management there was a “$16 million accounts payable problem.”
+Darlington’s Reconciliation Deficiencies
+In June 2000, Cummins’ internal auditors reported that the Darlington, U.K. facility had
+not been reconciling its accounts payable general ledger accounts to the supporting subsidiary
+ledgers.  As was the case at Fridley, it appeared that the accounting staff at Darlington did not
+understand how to reconcile accounts properly.  Cummins replaced the Darlington controller in
+early 2002, as part of its targeted review and clean-up, and required the Darlington facility to report
+periodically regarding the status of its account reconciliations.  However, as with Fridley,
+Cummins failed to devote sufficient resources to training the accounting staff at the facility and
+correcting the problem in a timely manner.  Darlington did not complete the reconciliation of its
+accounts until year-end 2002, over two years after the problem had been identified at the corporate
+level.
+ Cummins’ Restatement
+ In late January 2003, Cummins notified the SEC that it had discovered a potentially
+material accounting error.  Following this disclosure, Cummins took the following steps:  (i) it
+sent trained accounting personnel from the corporate office and the company’s outside auditor to
+Fridley to investigate the accounts payable accounts reconciliation issues and resolve them; (ii) it
+retained special counsel to conduct an internal investigation; (iii) it issued a press release
+announcing the potential adjustment; and (iv) it fired the accounting personnel responsible for
+the delinquent account reconciliations in question.
+ On August 4, 2003, Cummins filed its 2002 Annual Report on Form 10-K, which
+contained restated financial results for the years 2000, 2001, and 2002.2  The restatement
+corrected prior period accounting errors caused primarily by Cummins’ failure to timely
+reconcile a number of key accounts, including the accounts payable accounts at Fridley and
+Darlington, and to correct a $44 million charge to earnings the company took in 2000 to correct
+the reconciliation errors that had been identified at that time.3  The restatement had a material
+effect on Cummins’s earnings results:
+2  Cummins reported unaudited financial results for 2002 in three Quarterly Reports on
+Form 10-Q, filed on May 15, 2002, August 14, 2002 (amended on October 17, 2002), and
+November 1, 2002, and a current report on Form 8-K, filed on May 12, 2003.
+3   The restated financial statements were audited by Cummins’ current auditor,
+PricewaterhouseCoopers LLP (“PwC”), because Arthur Andersen LLP, Cummins’ predecessor
+auditor for the years 2000 and 2001, had ceased operations.  The restatement also included
+additional and unrelated adjustments that PwC identified in the course of performing the 2000
+and 2001 re-audits.
+ 4
+ 2002
+(Millions)
+2001
+(Millions)
+2000
+(Millions)
+Pre-2000
+(Millions)
+Previously reported net earnings $72 $(102) $8
+Restatement adjustments (after tax) $10 $(1) $6 ($37)
+Restated net earnings $82 $(103) $14
+As a percentage of restated earnings 12% 1% 43%
+ Cummins’ Remedial Measures
+ Cummins instituted a number of improvements to its internal controls designed to prevent
+any recurrence of similar problems in the future, including:  making specific internal control
+enhancements at Fridley and Darlington; hiring experienced finance, accounting, and internal audit
+personnel throughout Cummins; improving reporting lines between business unit controllers and
+the corporate controller; improving internal controls governing account reconciliations; and
+expanding the oversight by the Audit Committee of the Board of Directors.
+ C.  LEGAL ANALYSIS
+ Section 13(a) of the Exchange Act and Rules 13a-1 and 13a-13 thereunder require issuers
+with securities registered under Section 12 of the Exchange Act to file annual and quarterly reports
+with the Commission.  The obligation to file such reports embodies the requirement that they be
+true and correct.  See, e.g., SEC v. Savoy Indus., Inc., 587 F.2d 1149, 1165 (D.C. Cir. 1978), cert.
+denied, 440 U.S. 913 (1979).  Section 13(b)(2)(A) of the Exchange Act requires issuers to make
+and keep books, records, and accounts that, in reasonable detail, accurately and fairly reflect the
+transactions and dispositions of the assets of the issuer.  Section 13(b)(2)(B) requires issuers to
+devise and maintain systems of internal accounting controls sufficient to provide reasonable
+assurances that, among other things, transactions are recorded as necessary to permit preparation of
+financial statements in conformity with generally accepted accounting principles and to maintain
+accountability of assets.
+ A fundamental concept underlying accurate financial reporting is that all accounting entries
+that are required to be recorded must, in fact, be recorded.4  During the relevant period, two
+Cummins manufacturing facilities failed to properly record transactions and the disposition of
+assets on their books and ledgers.5  Cummins’ failure to properly record these transactions resulted
+in material discrepancies between the general ledger accounts on Cummins’ books and the
+4  Financial Accounting Standards Board Concepts Statement No.5 (As Amended)
+("Con 5"), Recognition and Measurement in Financial Statements of Business Enterprises,
+para. 63.
+5   Under Con 5, an asset or liability should be recognized on the company’s books when it
+meets four fundamental criteria:  definition, measurability, relevance, and reliability.
+“Recognition” is the process of formally recording or incorporating an asset or liability in an
+entity’s financial statements.  Because Cummins failed to perform reconciliations in a timely
+manner, it failed to detect, quantify, and record many accounting items that met the recognition
+criteria set forth in Con 5.
+ 5
+supporting subsidiary ledgers for the accounts payable accounts.  If Cummins had properly and
+timely performed reconciliations for these key balance sheet accounts, it would have detected and
+corrected the errors years earlier.
+ Cummins also failed to maintain sufficient internal accounting controls to provide
+reasonable assurances that its transactions were recorded as necessary to permit the preparation of
+its financial statements in conformity with generally accepted accounting principles.   Among other
+things, Cummins failed to employ and train qualified personnel in its Fridley and Darlington
+finance departments and failed to have an internal control system adequate to monitor the accounts
+reconciliation process.
+As a result of the conduct described above, Respondent violated Sections 13(a),
+13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act, and Rules 12b-20, 13a-1, and 13a-13
+thereunder.
+IV.
+ In determining to accept the Offer, the Commission considered remedial acts that were
+undertaken by Respondent and the cooperation that Respondent afforded the Commission staff
+during its investigation of this matter.
+V.
+ In view of the foregoing, the Commission deems it appropriate to impose the sanctions
+agreed to in Respondent’s Offer.
+ Accordingly, it is hereby ORDERED that:
+ Respondent cease and desist from committing or causing any violations and any future
+violations of Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act and Rules 12b-20,
+13a-1, and 13a-13 thereunder.
+ By the Commission.
+       N ancy M. Morris
+       S ecretary
+ 6

raw/aaer/2006/AAER-2372.txt ADDED Viewed

	@@ -0,0 +1,52 @@

+ UNITED STATES SECURITIES AND EXCHANGE COMMISSION
+SECURITIES ACT OF 1933
+Release No.  8660 / February 9, 2006
+SECURITIES EXCHANGE ACT OF 1934
+Release No. 53265 / February 9, 2006
+INVESTMENT ADVISERS ACT OF 1940
+Release No. 2486 / February 9, 2006
+ACCOUNTING AND AUDITIING ENFORCEMENT
+Release No.  2372 / February 9, 2006
+ADMINISTRATIVE PROCEEDING
+File No.  3-12179
+In the Matter of Lawrence A. Stoler, CPA
+On February 9, 2006, the Securities and Exchange Commission instituted administrative and
+cease-and-desist proceedings pursuant to Rule 102(e) of the Commission’s Rules of Practice,
+Section 8A of the Securities Act of 1933, Section 21C of the Securities Exchange Act of 1934
+and Section 203(k) of the Investment Advisers Act of 1940, against Lawrence A. Stoler, CPA
+In the Order Instituting Proceedings, the Division of Enforcement and the Office of the Chief
+Accountant allege that Stoler engaged in improper professional conduct in the audits of three
+hedge funds, Lipper Convertibles, L.P. (“Convertibles”), Lipper Convertibles Series II, L.P.
+(“Series II”), and Lipper Fixed Income Fund, L.P. (“Fixed Income”) (collectively, the “Funds”)
+for the year ended December 31, 2000 and was a cause of violations by the Funds, their portfolio
+manager, Edward J. Strafaci, and the entity that managed the Funds, Lipper Holdings, LLC.
+Stoler was the engagement partner on PricewaterhouseCoopers’ audits of the Funds’ financial
+statements, including the financial statements for Convertibles and Series II that were filed with
+the Commission pursuant to Section 17 of the Exchange Act.  The Division of Enforcement and
+the Office of the Chief Accountant allege that Stoler failed to adequately assess the substantial
+evidence produced by the audits that Strafaci was materially overstating the value of the
+convertible bonds and convertible preferred stock in which the Funds were invested, and
+unquestioningly relied on a purported confirmation process that was significantly flawed.  They
+further allege that Stoler knew or should have known that his failure to conduct and supervise an
+audit that conformed to GAAS and his approval of, and signature on, unqualified audit reports on
+the Funds’ 2000 financial statements, and internal control reports filed by Convertibles and
+Series II, would contribute to violations of the federal securities laws by  the Funds, Strafaci, and
+Lipper Holdings, including the dissemination to prospective investors and advisory clients, and
+the filing, of materially misleading financial statements, and the filing of inaccurate internal
+control reports.
+A hearing will be scheduled before an Administrative Law Judge to determine whether such
+allegations are true, to afford the respondent an opportunity to establish defenses to the
+allegations, to determine whether remedial action is necessary and appropriate, and to determine
+whether respondent should be ordered to cease and desist from committing or causing violations
+of and any future violations of the securities laws.  The Administrative Law Judge is directed to
+issue a decision no later than 300 days from the date of service of the Order Instituting
+Proceedings, pursuant to Rule 360(a)(2) of the Commission’s Rules of Practice.

raw/aaer/2006/AAER-2377.txt ADDED Viewed

	@@ -0,0 +1,155 @@

+ UNITED STATES OF AMERICA
+ before the
+ SECURITIES AND EXCHANGE COMMISSION
+SECURITIES EXCHANGE ACT OF 1934
+Release No.  53330 / February 17, 2006
+ACCOUNTING AND AUDITING ENFORCEMENT
+Release No.  2377 / February 17, 2006
+ADMINISTRATIVE PROCEEDING
+File No.  3-12209
+      :
+ :
+ :
+In the Matter of : ORDER INSTITUTING ADMINISTRATIVE
+      : PROCEEDINGS PURSUANT TO RULE
+ EDWARD A. HEIL (CPA),   : 102( e) OF THE COMMISSION’S RULES OF
+      : PRACTICE, MAKING FINDINGS, AND
+ Respondent.    : IMPO SING REMEDIAL SANCTIONS
+      :
+      :
+____________________________________ :
+I.
+ The Securities and Exchange Commission (“Commission”) deems it appropriate and in the
+public interest that public administrative proceedings be, and hereby are, instituted against Edward
+A. Heil (“Respondent” or “Heil”) pursuant to Rule 102(e)(3)(i) of the Commission’s Rules of
+Practice.1
+II.
+ In anticipation of the institution of these proceedings, Respondent has submitted an Offer
+of Settlement (the “Offer”) which the Commission has determined to accept.  Solely for the
+purpose of these proceedings and any other proceedings brought by or on behalf of the
+1 Rule 102(e)(3)(i) provides, in relevant part, that:
+ The Commission, with due regard to the public interest and without  preliminary hearing,
+may, by order, . . . suspend from appearing or practicing before it any . . . accountant . . . who has
+been by name . . . permanently enjoined by any court of competent jurisdiction, by reason of his
+or her misconduct in an action brought by the Commission, from violating or aiding and abetting
+the violation of any provision of the Federal securities laws or of the rules and regulations
+thereunder.
+ 2
+Commission, or to which the Commission is a party, and without admitting or denying the findings
+herein, except as to the Commission’s jurisdiction over him and the subject matter of these
+proceedings, and the findings contained in Section III.C. below, which are admitted, Respondent
+consents to the entry of this Order Instituting Administrative Proceedings Pursuant to Rule 102(e)
+of the Commission’s Rules of Practice, Making Findings, and Imposing Remedial Sanctions
+(“Order”), as set forth below.
+III.
+ On the basis of this Order and Responde nt’s Offer, the Commission finds that:
+A. Edward A. Heil (“Heil”) resides in Long  Island, New York.  Heil has been a CPA
+in New York State since 1973, and was employed by a well-known accounting firm between 1972
+and 1991, where he was an audit partner for seven years.  He co-founded eSafetyWorld, Inc.,
+(“eSafety”), and was its Chairman, President and Chief Executive Officer at all relevant times.
+B. eSafety was, at the relevant time, a Nevada corporation with its principal place of
+business in Bohemia, New York.  eSafety sold disposable garments, industrial safety equipment,
+and clean room equipment.  In addition, eSafety started a new line of business, providing
+consulting services to start-up companies, in 2000.  At the relevant time, eSafety’s common stock
+was registered with the Commission pursuant to Section 12(g) of the Exchange Act, and was listed
+for trading on the NASDAQ SmallCap Market until October 22, 2001, when NASDAQ suspended
+trading in its securities.
+C. On December 15, 2005, the Commission filed a complaint against Heil in a civil
+action entitled Securities and Exchange Commission v. Edward Heil, et al., Civil Action Number
+CV-05 5852, in the United States District Court for the Eastern District of New York.  On January
+27, 2006, the court entered a final judgment against Heil, permanently enjoining him from future
+violations of Sections 10(b) and 13(b)(5) of the Securities Exchange Act of 1934 (“Exchange Act”)
+and Rules 10b-5, 13b2-1 and 13b2-2 thereunder; and from aiding and abetting violations of
+Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act, and Rules 13a-1, 13a-13, 12b-
+20, and 12b-25 thereunder, and Section 232.302 of Regulation S-T.  Heil was also ordered to pay a
+$60,000 civil money penalty, and was barred as an officer or director of a public company for ten
+years.
+ D. The Commission’s complaint alleged th at, during 2000 and 2001, eSafety and Heil,
+among others, violated the federal securities laws by:  (1) making false and misleading statements
+in public filings with the Commission about eSafety’s revenues and profits from consulting
+contracts; (2) issuing a false and misleading press release that claimed eSafety had developed a
+product to prevent the spread of anthrax spores while opening mail; and (3) engaging in a
+manipulative scheme intended to create liquidity for, and increase the price of, eSafety stock.
+ 3
+IV.
+ In view of the foregoing, the Commission deems it appropriate and in the public interest to
+impose the sanction agreed to in Respondent Heil���s Offer.
+ Accordingly, it is hereby ORDERED, effective immediately, that:
+ A. Heil is suspended from appearing or practicing before the Commission as an
+accountant.
+ B. After 5 years from the date of this order, Respondent may request that the
+Commission consider his reinstatement by submitting an application (attention: Office of the
+Chief Accountant) to resume appearing or practicing before the Commission as:
+  1. a preparer or reviewer, or a pe rson responsible for the preparation or
+review, of any public company’s financial statements that are filed with the Commission.  Such
+an application must satisfy the Commission that Respondent’s work in his practice before the
+Commission will be reviewed either by the independent audit committee of the public company
+for which he works or in some other acceptable manner, as long as he practices before the
+Commission in this capacity; and/or
+  2. an independent accountant.  Su ch an application must satisfy the
+Commission that:
+   (a) Respondent, or the public accounting firm with which he is
+associated, is registered with the Public Company Accounting Oversight Board (“Board”) in
+accordance with the Sarbanes-Oxley Act of 2002, and such registration continues to be effective;
+   (b) Respondent, or the registered  public accounting firm with which he
+is associated, has been inspected by the Board and that inspection did not identify any criticisms
+of or potential defects in the Respondent’s or the firm’s quality control system that would
+indicate that the Respondent will not receive appropriate supervision or, if the Board has not
+conducted an inspection, has received an unqualified report relating to his, or the firm’s, most
+recent peer review conducted in accordance with the guidelines adopted by the former SEC
+Practice Section of the American Institute of Certified Public Accountants Division for CPA
+Firms or an organization providing equivalent oversight and quality control functions;
+   (c) Respondent has resolved all di sciplinary issues with the Board, and
+has complied with all terms and conditions of any sanctions imposed by the Board (other than
+reinstatement by the Commission); and
+   (d) Respondent acknowledges his responsibility, as long as
+Respondent appears or practices before the Commission as an independent accountant, to
+comply with all requirements of the Commission and the Board, including, but not limited to, all
+ 4
+requirements relating to registration, inspections, concurring partner reviews and quality control
+standards.
+C. The Commission will consider an application by Respondent to resume
+appearing or practicing before the Commission provided that his state CPA license is
+current and he has resolved all other disciplinary issues with the applicable state boards of
+accountancy.  However, if state licensure is dependant on reinstatement by the
+Commission, the Commission will consider an application on its other merits.  The
+Commission’s review may include consideration of, in addition to the matters referenced
+above, any other matters relating to Respondent’s character, integrity, professional conduct,
+or qualifications to appear or practice before the Commission.
+ By the Commission.
+       N a n c y  M .  M o r r i s
+       S e c r e t a r y

raw/aaer/2006/AAER-2378.txt ADDED Viewed

	@@ -0,0 +1,96 @@

+UNITED STATES OF AMERICA
+Before the
+SECURITIES AND EXCHANGE COMMISSION
+SECURITIES EXCHANGE ACT OF 1934
+Release No.  53334 / February 17, 2006
+ACCOUNTING AND AUDITING ENFORCEMENT
+Release No.  2378 / February 17, 2006
+ADMINISTRATIVE PROCEEDING
+File No. 3-10528
+In the Matter of
+Scott K. Barton, CPA
+:
+:
+:
+:
+:
+:
+ORDER GRANTING APPLICATION FOR
+REINSTATEMENT TO APPEAR AND PRACTICE
+BEFORE THE COMMISSION AS AN ACCOUNTANT
+RESPONSIBLE FOR THE PREPARATION OR
+REVIEW OF FINANCIAL STATEMENTS REQUIRED
+TO BE FILED WITH THE COMMISSION
+On July 2, 2001, Scott K. Barton ("Barton") was suspended from appearing or practicing
+as an accountant before the Commission as a result of settled public administrative proceedings
+instituted by the Commission against Barton pursuant to Rule 102(e) of the Commission's Rules
+of Practice.1  Barton consented to the entry of the findings, and imposition of the remedial
+sanctions set forth in the July 2, 2001 order, without admitting or denying the findings.  Barton
+also settled an injunctive action on which the 102(e) proceeding was based.
+From 1981 through August 1996, Barton was employed as Controller of Paracelsus
+Healthcare Corporation (“Paracelsus”).  The Commission alleged, in its injunctive action, that
+Barton participated in misconduct by which Paracelsus inflated its quarterly and annual earnings
+in filings with the Commission from at least 1993 through August 1996.  Specifically, the
+Commission alleged that Barton and others created and used “cookie jar” reserves which were
+inappropriate under generally accepted accounting principles (“GAAP”) because no probable
+and reasonably estimable exposures justified their creation, and because their later decrease
+artificially boosted Paracelsus’ earnings and concealed a decline in earnings.  Additionally, the
+1 See Accounting and Auditing Enforcement Release No. 1417, dated July 2, 2001.
+Rule 102(e)(5)(i) provides:
+“An application for reinstatement of a person permanently suspended or disqualified under paragraph (e)(1) or (e)(3)
+of this section may be made at any time, and the applicant may, in the Commission’s discretion, be afforded a
+hearing; however, the suspension or disqualification shall continue unless and until the applicant has been reinstated
+by the Commission for good cause shown.”  17 C.F.R. § 201.102(e)(5)(i).
+Commission alleged that Barton and others failed to disclose all material facts regarding the
+misconduct to Paracelsus’ auditors.
+This order is issued in response to Barton's application for reinstatement to practice
+before the Commission as an accountant responsible for the preparation or review of financial
+statements required to be filed with the Commission.
+ In any future capacity as a preparer or  reviewer, or a person responsible for the
+preparation or review of financial statements required to be filed with the Commission, Barton
+has stated that he will have his work reviewed by the independent audit committee of any
+company for which he works, or in some other manner acceptable to the Commission, while
+practicing before the Commission in this capacity.  Barton is not, at this time, seeking to appear
+or practice before the Commission as an independent accountant.  If he should wish to resume
+appearing and practicing before the Commission as an independent accountant, he will be
+required to submit an application to the Commission showing that he has complied and will
+continue to comply with the terms of the original suspension order in this regard.  Therefore,
+Barton's suspension from practice before the Commission as an independent accountant
+continues in effect until the Commission determines that a sufficient showing has been made in
+this regard in accordance with the terms of the original suspension order.
+Rule 102(e)(5) of the Commission’s Rules of Practice governs applications for
+reinstatement, and provides that the Commission may reinstate the privilege to appear and
+practice before the Commission “for good cause shown.”  This “good cause” determination is
+necessarily highly fact specific.
+On the basis of information supplied, representations made, and undertakings agreed to
+by Barton, it appears that he has complied with the terms of the July 2, 2001 order suspending
+him from appearing or practicing before the Commission as an accountant, that no information
+has come to the attention of the Commission relating to his character, integrity, professional
+conduct or qualifications to practice before the Commission that would be a basis for adverse
+action against him pursuant to Rule 102(e) of the Commission's Rules of Practice, and that
+Barton, by undertaking to have his work reviewed by the independent audit committee of any
+company for which he works, or in some other manner acceptable to the Commission, in his
+practice before the Commission as a preparer or reviewer of financial statements required to be
+filed with the Commission, has shown good cause for reinstatement.  Therefore, it is accordingly,
+ORDERED pursuant to Rule 102(e)(5)(i) of the Commission's Rules of Practice that
+Scott K. Barton, CPA is hereby reinstated to appear and practice before the Commission as an
+accountant responsible for the preparation or review of financial statements required to be filed
+with the Commission.
+By the Commission.
+Nancy M. Morris
+Secretary

raw/aaer/2006/AAER-2387.txt ADDED Viewed

	@@ -0,0 +1,1371 @@

+     SEC.gov | Jeffrey P. Jorissen, Gary A. Shiffman and Mary A. Petrella
+         !function(){var e=navigator.userAgent,a=document.documentElement,n=a.className;n=n.replace("no-js","js"),/iPad|iPhone|iPod/.test(e)&&!window.MSStream&&(n+=" ua-ios"),a.className=n}();
+     {"path":{"baseUrl":"\/","pathPrefix":"","currentPath":"node\/498466","currentPathIsAdmin":false,"isFront":false,"currentLanguage":"en"},"pluralDelimiter":"\u0003","suppressDeprecationErrors":true,"gtag":{"tagId":"","consentMode":false,"otherIds":[],"events":[],"additionalConfigInfo":[]},"ajaxPageState":{"libraries":"eJxdT0GOwzAI_JBdn_oei2DkeINNZLC22devlaZS2wtiBhhmcKNUTPo97jxyaXEH3GJpiZrFhQW38A4cMqgeYQGlV19JFTKpQ-kUmvQKXP7I0cO4tC2kPnbg2wVdFslM0SCHPMs3vsEPPD7J6hgOGdPCKJyoRxxqUuePHjLLAuzVjimenRJGSLW08NoBK9LUn6SHlrytVOlcpJShB63QLSpBx_WkOzHNePol4fRQo_qMPvQ36ZXsAmd99lMNr2t_GUR9n60EyX9a_wePd5ns","theme":"uswds_sec","theme_token":null},"ajaxTrustedUrl":[],"gtm":{"tagId":null,"settings":{"data_layer":"dataLayer","include_classes":false,"allowlist_classes":"","blocklist_classes":"","include_environment":false,"environment_id":"","environment_token":""},"tagIds":["GTM-TD3BKV"]},"data":{"extlink":{"extTarget":false,"extTargetAppendNewWindowDisplay":true,"extTargetAppendNewWindowLabel":"(opens in a new window)","extTargetNoOverride":false,"extNofollow":false,"extTitleNoOverride":false,"extNoreferrer":false,"extFollowNoOverride":false,"extClass":"0","extLabel":"(link is external)","extImgClass":false,"extSubdomains":true,"extExclude":".*\\.gov|http:\/\/www.xbrl.org\/utr\/2013-05-17\/utr.xml|http:\/\/www.xbrl.org\/dtr\/type\/numeric-2009-12-16.xsd|http:\/\/www.xbrl.org\/dtr\/type\/nonNumeric-2009-12-16.xsd|https:\/\/secir.secure.force.com\/ombudsman\/OMMSForm","extInclude":"","extCssExclude":".data-exempt","extCssInclude":"","extCssExplicit":"","extAlert":true,"extAlertText":"You are now leaving the SEC Website. The link you have selected is located on another server. Please click on the OK button below to proceed to the selected site. The SEC does not endorse this web site, its sponsor, or any of the policies, activities, products, or services offered on the site or by any advertiser on the site.","extHideIcons":false,"mailtoClass":"0","telClass":"","mailtoLabel":"(link sends email)","telLabel":"(link is a phone number)","extUseFontAwesome":false,"extIconPlacement":"append","extPreventOrphan":false,"extFaLinkClasses":"fa fa-external-link","extFaMailtoClasses":"fa fa-envelope-o","extAdditionalLinkClasses":"","extAdditionalMailtoClasses":"","extAdditionalTelClasses":"","extFaTelClasses":"fa fa-phone","allowedDomains":null,"extExcludeNoreferrer":""}},"user":{"uid":0,"permissionsHash":"e506dfd1572f94bd1f339f1a7483bfbded31d4a9d2bdfdca3fdbc235153380ee"}}
+      Skip to search field
+      Skip to main content
+           An official website of the United States government
+           Here’s how you know
+           Here’s how you know
+                Official websites use .gov
+                              A  .gov  website belongs to an official government organization in the United States.
+                Secure .gov websites use HTTPS
+              A  lock
+              (   Lock  A locked padlock    )
+              or  https://  means you’ve safely connected to the .gov website. Share sensitive information only on official, secure websites.
+                     SEC homepage
+        Menu
+          Close
+     Search SEC.gov &amp; EDGAR
+       Search
+             Search Filings
+           Search Filings
+                             Full Text Search
+                             Latest Filings
+                             Mutual Fund Search
+                             Variable Insurance Products Search
+                             SIC Codes
+                             CIK Lookup
+                             Public Dissemination Service (PDS)
+                             Search Assistance
+             Submit Filings
+           Submit Filings
+                             EDGAR Filer Management Portal
+                             EDGAR Filing Portal
+                             Online Forms Management Portal
+                             EDGAR Next
+                             Forms Index
+                             Filer Support &amp; Resources
+             Data &amp; Research
+           Data &amp; Research
+                             Data Library
+                             Statistics &amp; Data Visualizations
+                             Structured Data
+                             Investment Management Data
+                             Open Data at the SEC
+             Rules, Enforcement, &amp; Compliance
+           Rules &amp; Regulations
+                             Rulemaking Activity
+                             Submit Public Comments
+                             Staff Guidance
+                             No-Action, Interpretive, and Exemptive Letters
+                             Self-Regulatory Organization Rulemaking
+                             Public Petitions for Rulemaking
+           Enforcement &amp; Litigation
+                             Litigation Releases
+                             Administrative Proceedings
+                             Administrative Law Judge Orders and Initial Decisions
+                             Trading Suspensions
+                             Distributions to Harmed Investors
+                             Receiverships
+           Compliance
+                             Examination Priorities
+                             Risk Alerts
+                             Compliance Outreach Program
+                             Proposed Rules
+                             What&#039;s New
+                             Whistleblower Program
+             Featured Topics
+           Featured Topics
+                             Crypto Task Force
+                             Cybersecurity
+                             Market Structure Analytics
+                             Saving and Investing for Military Personnel
+                             Saving and Investing for Teachers
+                             SEC-CFTC Harmonization Initiative
+                             Treasury Clearing Implementation
+             About
+           About
+                             Mission
+                             Commissioners
+                             Divisions &amp; Offices
+                             Division &amp; Office Directors
+                             Advisory Committees
+                             Budget &amp; Performance
+                             Reports &amp; Publications
+                             Commission Votes
+                             Contact the SEC
+                             Careers
+                             Submit a Tip or Complaint
+                           Newsroom
+                           |
+                           Investors
+                           Small Businesses
+                           Whistleblowers
+                           Newsroom
+                           |
+                           Investors
+                           Small Businesses
+                           Whistleblowers
+     Search SEC.gov &amp; EDGAR
+       Search
+        More in this Section
+                 Enforcement &amp; Litigation
+           Litigation Releases
+           Administrative Proceedings
+           Administrative Law Judge Orders and Initial Decisions
+           Trading Suspensions
+           Distributions to Harmed Investors
+           Receiverships
+           Electronic Filings in Administrative Proceedings (eFAP)
+           Rules of Practice
+           Applications for Reentry
+           Reports of Investigations
+           Whistleblower Program
+           Public Alert: Unregistered Soliciting Entities (PAUSE)
+           SEC Action Lookup - Individuals (SALI)
+           Enforcement Data Delivery Standards
+           Small Businesses
+           Appellate Briefs
+           Amicus / Friend of the Court Briefs
+                 Enforcement &amp; Litigation
+           Litigation Releases
+           Administrative Proceedings
+           Administrative Law Judge Orders and Initial Decisions
+           Trading Suspensions
+           Distributions to Harmed Investors
+           Receiverships
+           Electronic Filings in Administrative Proceedings (eFAP)
+           Rules of Practice
+           Applications for Reentry
+           Reports of Investigations
+           Whistleblower Program
+           Public Alert: Unregistered Soliciting Entities (PAUSE)
+           SEC Action Lookup - Individuals (SALI)
+           Enforcement Data Delivery Standards
+           Small Businesses
+           Appellate Briefs
+           Amicus / Friend of the Court Briefs
+               Home
+               Enforcement and Litigation
+               Litigation Releases
+              Jeffrey P. Jorissen, Gary A. Shiffman and Mary A. Petrella
+        Jeffrey P. Jorissen, Gary A. Shiffman and Mary A. Petrella
+                   U.S. SECURITIES &amp; EXCHANGE COMMISSION
+ Litigation Release No.  19580 / February 27, 2006
+ Accounting and Auditing Enforcement Release No.  2387 / February 27, 2006
+ Securities and Exchange Commission v. Jeffrey P. Jorissen, Gary A. Shiffman and Mary A. Petrella, Civil Action NO. 2:06-CV-10845 (E.D. Mich.) (February 27, 2006)
+ SEC Files Civil Action against the Chief Executive Officer, Chief Financial Officer and Former Controller of Sun Communities in Connection with Material Misstatements of Income; SEC Files Settled Proceeding with Sun Communities and Former Audit Engagement Partner
+ On February 27, 2006, the Securities and Exchange Commission filed an injunctive action in the United States District Court for the Eastern District of Michigan against the Chief Executive Officer, Chief Financial Officer and former Controller of Sun Communities, Inc. ("Sun").  According to the complaint, Sun failed to properly account for losses resulting from Sun's investment in SunChamp, LLC, a joint venture involved in the development of manufactured housing communities.  As a result, Sun materially overstated its income from January 2000 through December 2002.  The complaint alleges that Sun violated generally accepted accounting principles by failing to report any of SunChamp's losses during seven quarters, and by improperly delaying or underreporting Sun's share of SunChamp's losses in four additional quarters.  According to the complaint, Sun's chief financial officer, Jeffrey P. Jorissen, directed those accounting decisions.  The complaint further alleges that Sun maintained an improper general reserve and improperly "smoothed" earnings by recording expenses in improper periods.  According to the complaint, Gary A. Shiffman, the Chairman of Sun's Board of Directors, and its Chief Executive Officer and President, caused falsifications of Sun's records by providing false information regarding the timing of agreements entered into by Sun.  The complaint also alleges that Mary A. Petrella, Sun's controller during the relevant period, falsified Sun's records by releasing funds from Sun's general reserve and recording expenses in improper periods.
+ The complaint alleges that Jorissen violated Sections 17(a)(2) and (3) of the Securities Act of 1933 ("Securities Act"), Sections 13(b)(5) of the Securities Exchange Act of 1934 ("Exchange Act") and Rules 13b2-1 and 13b2-2 thereunder, and aided and abetted violations of Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Rules 12b-20, 13a-1 and 13a-13 thereunder, and seeks a permanent injunction, disgorgement, prejudgment interest and a civil penalty against him.  Further, the complaint alleges that Shiffman violated Rule 13b2-1 of the Exchange Act and seeks a permanent injunction and civil penalty against him.  Finally, the complaint alleges that Petrella violated Section 13(b)(5) of the Exchange Act and Rule 13b2-1 thereunder, seeking a permanent injunction and civil penalty against her.
+ In a related action, on February 27, 2006, the Commission issued a settled cease-and-desist order against Sun and its main operating subsidiary, Sun Communities Operating Limited Partnership ("SCOLP").  The Order finds that Sun and SCOLP violated Sections 17(a)(2) and (3) of the Securities Act and books and records, internal controls and periodic reporting provisions of the Exchange Act. The Order requires Sun and SCOLP to cease and desist from committing or causing any violations and any future violations of these provisions.  In addition, Sun consented to undertakings to retain an independent consultant to perform a review of its internal controls, record-keeping and financial reporting policies and procedures and to make recommendations regarding improvements.  Sun and SCOLP consented to the issuance of the Order without admitting or denying any of the findings therein.  ( Rel. 33-8665; Rel. 34-53381; AAER Rel. 2386; File No. 3-12221 )
+ The Commission also instituted settled administrative proceedings against Sun's former auditor, Gregory G. Nelson.  The Order finds that Nelson, the engagement partner on the Sun audit, engaged in improper professional conduct in connection with the 2000 and 2001 audits and the first quarter 2002 interim review of Sun's financial statements.  The Order finds that Nelson failed to exercise due professional care and denies Nelson the privilege of appearing or practicing before the Commission as an accountant, with the right to apply to the Commission for reinstatement after two years from the date of the Order.  Nelson consented to the issuance of the Order without admitting or denying any of the findings in the Order.   ( Rel. 34-53380; AAER Rel. 2385; File No. 12220 )
+           Return to top
+                 SEC homepage
+                                                     About the SEC
+           Budget &amp; Performance
+           Careers
+           Commission Votes
+           Contact
+           Contracts
+                                                     Transparency
+           Accessibility &amp; Disability
+           Super Intelligence
+           FOIA
+           Inspector General
+           No FEAR Act Data
+           Ombuds
+           SEC Excess Personal Property Guidance
+                                                     Websites
+           Investor.gov
+           Related Sites
+           USA.gov
+                                                     Site Information
+           Plain Writing
+           Privacy &amp; Security
+           Site Map
+               Stay connected. Sign up for email updates.
+   Your email address
+   Sign Up
+                 X
+                 Facebook
+               Instagram
+                 RSS
+                 YouTube
+               Email Updates

raw/aaer/2006/AAER-2394.txt ADDED Viewed

	@@ -0,0 +1,1381 @@

+     SEC.gov | California Amplifier, Inc.
+         !function(){var e=navigator.userAgent,a=document.documentElement,n=a.className;n=n.replace("no-js","js"),/iPad|iPhone|iPod/.test(e)&&!window.MSStream&&(n+=" ua-ios"),a.className=n}();
+     {"path":{"baseUrl":"\/","pathPrefix":"","currentPath":"node\/498631","currentPathIsAdmin":false,"isFront":false,"currentLanguage":"en"},"pluralDelimiter":"\u0003","suppressDeprecationErrors":true,"gtag":{"tagId":"","consentMode":false,"otherIds":[],"events":[],"additionalConfigInfo":[]},"ajaxPageState":{"libraries":"eJxdT0GOwzAI_JBdn_oei2DkeINNZLC22devlaZS2wtiBhhmcKNUTPo97jxyaXEH3GJpiZrFhQW38A4cMqgeYQGlV19JFTKpQ-kUmvQKXP7I0cO4tC2kPnbg2wVdFslM0SCHPMs3vsEPPD7J6hgOGdPCKJyoRxxqUuePHjLLAuzVjimenRJGSLW08NoBK9LUn6SHlrytVOlcpJShB63QLSpBx_WkOzHNePol4fRQo_qMPvQ36ZXsAmd99lMNr2t_GUR9n60EyX9a_wePd5ns","theme":"uswds_sec","theme_token":null},"ajaxTrustedUrl":[],"gtm":{"tagId":null,"settings":{"data_layer":"dataLayer","include_classes":false,"allowlist_classes":"","blocklist_classes":"","include_environment":false,"environment_id":"","environment_token":""},"tagIds":["GTM-TD3BKV"]},"data":{"extlink":{"extTarget":false,"extTargetAppendNewWindowDisplay":true,"extTargetAppendNewWindowLabel":"(opens in a new window)","extTargetNoOverride":false,"extNofollow":false,"extTitleNoOverride":false,"extNoreferrer":false,"extFollowNoOverride":false,"extClass":"0","extLabel":"(link is external)","extImgClass":false,"extSubdomains":true,"extExclude":".*\\.gov|http:\/\/www.xbrl.org\/utr\/2013-05-17\/utr.xml|http:\/\/www.xbrl.org\/dtr\/type\/numeric-2009-12-16.xsd|http:\/\/www.xbrl.org\/dtr\/type\/nonNumeric-2009-12-16.xsd|https:\/\/secir.secure.force.com\/ombudsman\/OMMSForm","extInclude":"","extCssExclude":".data-exempt","extCssInclude":"","extCssExplicit":"","extAlert":true,"extAlertText":"You are now leaving the SEC Website. The link you have selected is located on another server. Please click on the OK button below to proceed to the selected site. The SEC does not endorse this web site, its sponsor, or any of the policies, activities, products, or services offered on the site or by any advertiser on the site.","extHideIcons":false,"mailtoClass":"0","telClass":"","mailtoLabel":"(link sends email)","telLabel":"(link is a phone number)","extUseFontAwesome":false,"extIconPlacement":"append","extPreventOrphan":false,"extFaLinkClasses":"fa fa-external-link","extFaMailtoClasses":"fa fa-envelope-o","extAdditionalLinkClasses":"","extAdditionalMailtoClasses":"","extAdditionalTelClasses":"","extFaTelClasses":"fa fa-phone","allowedDomains":null,"extExcludeNoreferrer":""}},"user":{"uid":0,"permissionsHash":"e506dfd1572f94bd1f339f1a7483bfbded31d4a9d2bdfdca3fdbc235153380ee"}}
+      Skip to search field
+      Skip to main content
+           An official website of the United States government
+           Here’s how you know
+           Here’s how you know
+                Official websites use .gov
+                              A  .gov  website belongs to an official government organization in the United States.
+                Secure .gov websites use HTTPS
+              A  lock
+              (   Lock  A locked padlock    )
+              or  https://  means you’ve safely connected to the .gov website. Share sensitive information only on official, secure websites.
+                     SEC homepage
+        Menu
+          Close
+     Search SEC.gov &amp; EDGAR
+       Search
+             Search Filings
+           Search Filings
+                             Full Text Search
+                             Latest Filings
+                             Mutual Fund Search
+                             Variable Insurance Products Search
+                             SIC Codes
+                             CIK Lookup
+                             Public Dissemination Service (PDS)
+                             Search Assistance
+             Submit Filings
+           Submit Filings
+                             EDGAR Filer Management Portal
+                             EDGAR Filing Portal
+                             Online Forms Management Portal
+                             EDGAR Next
+                             Forms Index
+                             Filer Support &amp; Resources
+             Data &amp; Research
+           Data &amp; Research
+                             Data Library
+                             Statistics &amp; Data Visualizations
+                             Structured Data
+                             Investment Management Data
+                             Open Data at the SEC
+             Rules, Enforcement, &amp; Compliance
+           Rules &amp; Regulations
+                             Rulemaking Activity
+                             Submit Public Comments
+                             Staff Guidance
+                             No-Action, Interpretive, and Exemptive Letters
+                             Self-Regulatory Organization Rulemaking
+                             Public Petitions for Rulemaking
+           Enforcement &amp; Litigation
+                             Litigation Releases
+                             Administrative Proceedings
+                             Administrative Law Judge Orders and Initial Decisions
+                             Trading Suspensions
+                             Distributions to Harmed Investors
+                             Receiverships
+           Compliance
+                             Examination Priorities
+                             Risk Alerts
+                             Compliance Outreach Program
+                             Proposed Rules
+                             What&#039;s New
+                             Whistleblower Program
+             Featured Topics
+           Featured Topics
+                             Crypto Task Force
+                             Cybersecurity
+                             Market Structure Analytics
+                             Saving and Investing for Military Personnel
+                             Saving and Investing for Teachers
+                             SEC-CFTC Harmonization Initiative
+                             Treasury Clearing Implementation
+             About
+           About
+                             Mission
+                             Commissioners
+                             Divisions &amp; Offices
+                             Division &amp; Office Directors
+                             Advisory Committees
+                             Budget &amp; Performance
+                             Reports &amp; Publications
+                             Commission Votes
+                             Contact the SEC
+                             Careers
+                             Submit a Tip or Complaint
+                           Newsroom
+                           |
+                           Investors
+                           Small Businesses
+                           Whistleblowers
+                           Newsroom
+                           |
+                           Investors
+                           Small Businesses
+                           Whistleblowers
+     Search SEC.gov &amp; EDGAR
+       Search
+        More in this Section
+                 Enforcement &amp; Litigation
+           Litigation Releases
+           Administrative Proceedings
+           Administrative Law Judge Orders and Initial Decisions
+           Trading Suspensions
+           Distributions to Harmed Investors
+           Receiverships
+           Electronic Filings in Administrative Proceedings (eFAP)
+           Rules of Practice
+           Applications for Reentry
+           Reports of Investigations
+           Whistleblower Program
+           Public Alert: Unregistered Soliciting Entities (PAUSE)
+           SEC Action Lookup - Individuals (SALI)
+           Enforcement Data Delivery Standards
+           Small Businesses
+           Appellate Briefs
+           Amicus / Friend of the Court Briefs
+                 Enforcement &amp; Litigation
+           Litigation Releases
+           Administrative Proceedings
+           Administrative Law Judge Orders and Initial Decisions
+           Trading Suspensions
+           Distributions to Harmed Investors
+           Receiverships
+           Electronic Filings in Administrative Proceedings (eFAP)
+           Rules of Practice
+           Applications for Reentry
+           Reports of Investigations
+           Whistleblower Program
+           Public Alert: Unregistered Soliciting Entities (PAUSE)
+           SEC Action Lookup - Individuals (SALI)
+           Enforcement Data Delivery Standards
+           Small Businesses
+           Appellate Briefs
+           Amicus / Friend of the Court Briefs
+               Home
+               Enforcement and Litigation
+               Litigation Releases
+              California Amplifier, Inc.
+        California Amplifier, Inc.
+  U.S. SECURITIES AND EXCHANGE COMMISSION
+  Litigation Release No. 19614 / March 20, 2006
+  Accounting and Auditing Enforcement Release No. 2394 / March 20, 2006
+   SEC v. Barry Richard Kusatzky , 1:04CV00700 (D.D.C. February 17, 2006)
+  FINAL JUDGMENT ENTERED AGAINST FORMER CONTROLLER OF CALIFORNIA AMPLIFIER, INC. FOR FRAUD AND INSIDER TRADING
+  On February 17, 2006, the United States District Court for the District of Columbia entered a settled final judgment against Barry Richard Kusatzky, former controller of California Amplifier, Inc., for falsifying the company's financial statements and books and records and insider trading. Kusatzky consented to the final judgment enjoining him from violating the antifraud provisions of the federal securities laws, imposing a permanent officer and director bar, and ordering payment of partial disgorgement of $25,000.
+  The Commission filed a complaint on April 28, 2004, alleging that Kusatzky caused California Amplifier to materially overstate income and equity in its quarterly and annual financial statements for the period November 27, 1999, through November 25, 2000, by hiding $7.8 million in expenses. The Complaint alleged that Kusatzky fabricated California Amplifier's financial statements, falsified its books and records, and presented false records to the company's auditors. Further, according to the Complaint, in January 2000, Kusatzky sold 15,000 shares of California Amplifier stock while in possession of material, non-public information that the company's reported earnings were materially overstated. By selling his stock before the overstatement of California Amplifier's earnings was disclosed, Kusatzky avoided losses of over $350,000.
+  In January 2005, Kusatzky pled guilty to two counts of securities fraud in a criminal proceeding filed by the United States Attorney's office for the Central District of California. On April 25, 2005, Kusatzky was sentenced to a prison term of eighteen months and three years of supervised release thereafter.
+  Without admitting or denying the allegations in the Complaint, Kusatzky consented to the entry of a final judgment permanently enjoining him from violations of Section 17(a) of the Securities Act of 1933 and Sections 10(b) and 13(b)(5) of the Securities Exchange Act of 1934 ("Exchange Act"), and Rules 10b-5, 13b2-1, and 13b2-2 promulgated thereunder, as well as, aiding and abetting violations of Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act and Rules 12b-20, 13a-1, and 13a-13 promulgated thereunder. Kusatzky agreed to pay disgorgement of $25,000 and the final judgment waives Kusatzky's remaining liability of $333,000 in disgorgement and prejudgment interest thereon based on sworn representations in his Statement of Financial Condition and other documents and information submitted to the Commission. In addition, Kusatzky consented to an order barring him from serving as an officer or director of a public company.
+  In a related action, the Commission previously instituted a settled administrative proceeding against California Amplifier. [In the Matter of California Amplifier, Inc. (Rel.  34-49630 ; File No. 3-11469)]
+  For more information, see Litigation Release No.  18688  (April 29, 2004).
+ SEC Complaint in this matter  -->
+  &nbsp;
+           Return to top
+                 SEC homepage
+                                                     About the SEC
+           Budget &amp; Performance
+           Careers
+           Commission Votes
+           Contact
+           Contracts
+                                                     Transparency
+           Accessibility &amp; Disability
+           Super Intelligence
+           FOIA
+           Inspector General
+           No FEAR Act Data
+           Ombuds
+           SEC Excess Personal Property Guidance
+                                                     Websites
+           Investor.gov
+           Related Sites
+           USA.gov
+                                                     Site Information
+           Plain Writing
+           Privacy &amp; Security
+           Site Map
+               Stay connected. Sign up for email updates.
+   Your email address
+   Sign Up
+                 X
+                 Facebook
+               Instagram
+                 RSS
+                 YouTube
+               Email Updates

raw/aaer/2006/AAER-2397.pdf ADDED Viewed

Binary file (46.3 kB). View file

raw/aaer/2006/AAER-2402.txt ADDED Viewed

	@@ -0,0 +1,1373 @@

+     SEC.gov | Eric Tyra, Scott Wynne, Peter Berman, and Scott Carey
+         !function(){var e=navigator.userAgent,a=document.documentElement,n=a.className;n=n.replace("no-js","js"),/iPad|iPhone|iPod/.test(e)&&!window.MSStream&&(n+=" ua-ios"),a.className=n}();
+     {"path":{"baseUrl":"\/","pathPrefix":"","currentPath":"node\/498706","currentPathIsAdmin":false,"isFront":false,"currentLanguage":"en"},"pluralDelimiter":"\u0003","suppressDeprecationErrors":true,"gtag":{"tagId":"","consentMode":false,"otherIds":[],"events":[],"additionalConfigInfo":[]},"ajaxPageState":{"libraries":"eJxdT0GOwzAI_JBdn_oei2DkeINNZLC22devlaZS2wtiBhhmcKNUTPo97jxyaXEH3GJpiZrFhQW38A4cMqgeYQGlV19JFTKpQ-kUmvQKXP7I0cO4tC2kPnbg2wVdFslM0SCHPMs3vsEPPD7J6hgOGdPCKJyoRxxqUuePHjLLAuzVjimenRJGSLW08NoBK9LUn6SHlrytVOlcpJShB63QLSpBx_WkOzHNePol4fRQo_qMPvQ36ZXsAmd99lMNr2t_GUR9n60EyX9a_wePd5ns","theme":"uswds_sec","theme_token":null},"ajaxTrustedUrl":[],"gtm":{"tagId":null,"settings":{"data_layer":"dataLayer","include_classes":false,"allowlist_classes":"","blocklist_classes":"","include_environment":false,"environment_id":"","environment_token":""},"tagIds":["GTM-TD3BKV"]},"data":{"extlink":{"extTarget":false,"extTargetAppendNewWindowDisplay":true,"extTargetAppendNewWindowLabel":"(opens in a new window)","extTargetNoOverride":false,"extNofollow":false,"extTitleNoOverride":false,"extNoreferrer":false,"extFollowNoOverride":false,"extClass":"0","extLabel":"(link is external)","extImgClass":false,"extSubdomains":true,"extExclude":".*\\.gov|http:\/\/www.xbrl.org\/utr\/2013-05-17\/utr.xml|http:\/\/www.xbrl.org\/dtr\/type\/numeric-2009-12-16.xsd|http:\/\/www.xbrl.org\/dtr\/type\/nonNumeric-2009-12-16.xsd|https:\/\/secir.secure.force.com\/ombudsman\/OMMSForm","extInclude":"","extCssExclude":".data-exempt","extCssInclude":"","extCssExplicit":"","extAlert":true,"extAlertText":"You are now leaving the SEC Website. The link you have selected is located on another server. Please click on the OK button below to proceed to the selected site. The SEC does not endorse this web site, its sponsor, or any of the policies, activities, products, or services offered on the site or by any advertiser on the site.","extHideIcons":false,"mailtoClass":"0","telClass":"","mailtoLabel":"(link sends email)","telLabel":"(link is a phone number)","extUseFontAwesome":false,"extIconPlacement":"append","extPreventOrphan":false,"extFaLinkClasses":"fa fa-external-link","extFaMailtoClasses":"fa fa-envelope-o","extAdditionalLinkClasses":"","extAdditionalMailtoClasses":"","extAdditionalTelClasses":"","extFaTelClasses":"fa fa-phone","allowedDomains":null,"extExcludeNoreferrer":""}},"user":{"uid":0,"permissionsHash":"e506dfd1572f94bd1f339f1a7483bfbded31d4a9d2bdfdca3fdbc235153380ee"}}
+      Skip to search field
+      Skip to main content
+           An official website of the United States government
+           Here’s how you know
+           Here’s how you know
+                Official websites use .gov
+                              A  .gov  website belongs to an official government organization in the United States.
+                Secure .gov websites use HTTPS
+              A  lock
+              (   Lock  A locked padlock    )
+              or  https://  means you’ve safely connected to the .gov website. Share sensitive information only on official, secure websites.
+                     SEC homepage
+        Menu
+          Close
+     Search SEC.gov &amp; EDGAR
+       Search
+             Search Filings
+           Search Filings
+                             Full Text Search
+                             Latest Filings
+                             Mutual Fund Search
+                             Variable Insurance Products Search
+                             SIC Codes
+                             CIK Lookup
+                             Public Dissemination Service (PDS)
+                             Search Assistance
+             Submit Filings
+           Submit Filings
+                             EDGAR Filer Management Portal
+                             EDGAR Filing Portal
+                             Online Forms Management Portal
+                             EDGAR Next
+                             Forms Index
+                             Filer Support &amp; Resources
+             Data &amp; Research
+           Data &amp; Research
+                             Data Library
+                             Statistics &amp; Data Visualizations
+                             Structured Data
+                             Investment Management Data
+                             Open Data at the SEC
+             Rules, Enforcement, &amp; Compliance
+           Rules &amp; Regulations
+                             Rulemaking Activity
+                             Submit Public Comments
+                             Staff Guidance
+                             No-Action, Interpretive, and Exemptive Letters
+                             Self-Regulatory Organization Rulemaking
+                             Public Petitions for Rulemaking
+           Enforcement &amp; Litigation
+                             Litigation Releases
+                             Administrative Proceedings
+                             Administrative Law Judge Orders and Initial Decisions
+                             Trading Suspensions
+                             Distributions to Harmed Investors
+                             Receiverships
+           Compliance
+                             Examination Priorities
+                             Risk Alerts
+                             Compliance Outreach Program
+                             Proposed Rules
+                             What&#039;s New
+                             Whistleblower Program
+             Featured Topics
+           Featured Topics
+                             Crypto Task Force
+                             Cybersecurity
+                             Market Structure Analytics
+                             Saving and Investing for Military Personnel
+                             Saving and Investing for Teachers
+                             SEC-CFTC Harmonization Initiative
+                             Treasury Clearing Implementation
+             About
+           About
+                             Mission
+                             Commissioners
+                             Divisions &amp; Offices
+                             Division &amp; Office Directors
+                             Advisory Committees
+                             Budget &amp; Performance
+                             Reports &amp; Publications
+                             Commission Votes
+                             Contact the SEC
+                             Careers
+                             Submit a Tip or Complaint
+                           Newsroom
+                           |
+                           Investors
+                           Small Businesses
+                           Whistleblowers
+                           Newsroom
+                           |
+                           Investors
+                           Small Businesses
+                           Whistleblowers
+     Search SEC.gov &amp; EDGAR
+       Search
+        More in this Section
+                 Enforcement &amp; Litigation
+           Litigation Releases
+           Administrative Proceedings
+           Administrative Law Judge Orders and Initial Decisions
+           Trading Suspensions
+           Distributions to Harmed Investors
+           Receiverships
+           Electronic Filings in Administrative Proceedings (eFAP)
+           Rules of Practice
+           Applications for Reentry
+           Reports of Investigations
+           Whistleblower Program
+           Public Alert: Unregistered Soliciting Entities (PAUSE)
+           SEC Action Lookup - Individuals (SALI)
+           Enforcement Data Delivery Standards
+           Small Businesses
+           Appellate Briefs
+           Amicus / Friend of the Court Briefs
+                 Enforcement &amp; Litigation
+           Litigation Releases
+           Administrative Proceedings
+           Administrative Law Judge Orders and Initial Decisions
+           Trading Suspensions
+           Distributions to Harmed Investors
+           Receiverships
+           Electronic Filings in Administrative Proceedings (eFAP)
+           Rules of Practice
+           Applications for Reentry
+           Reports of Investigations
+           Whistleblower Program
+           Public Alert: Unregistered Soliciting Entities (PAUSE)
+           SEC Action Lookup - Individuals (SALI)
+           Enforcement Data Delivery Standards
+           Small Businesses
+           Appellate Briefs
+           Amicus / Friend of the Court Briefs
+               Home
+               Enforcement and Litigation
+               Litigation Releases
+              Eric Tyra, Scott Wynne, Peter Berman, and Scott Carey
+        Eric Tyra, Scott Wynne, Peter Berman, and Scott Carey
+                   U.S. SECURITIES AND EXCHANGE COMMISSION
+ Litigation Release No. 19629 / March 29, 2006
+ Accounting and Auditing Enforcement Release No. 2402 / March 29, 2006
+  SEC v. Eric Tyra, Scott Wynne, Peter Berman, and Scott Carey , Civil Action No. CV-04-P-1052-S (N.D. Al.)
+ The Securities and Exchange Commission announced that on March 28, 2006, the Honorable R. David Proctor, United States District Judge for the Northern District of Alabama, entered a Final Judgment As To Defendant Scott Wynne, enjoining him from future violations of Section 17(a) of the Securities Act of 1933, Sections 10(b) and 13(b)(5) of the Securities Exchange Act of 1934 and Rules 10b-5, 13b2-1 and 13b2-2 thereunder, and from aiding and abetting violations of Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Rules 12b-20, 13a-1 and 13a-13 thereunder.  Wynne consented to the entry of the judgment without admitting or denying the allegations of the Commission's Complaint.  The court ordered a civil penalty in the amount of $25,000, and prohibited Wynne from acting as an officer or director of any issuer that has a class of registered securities for a period of six years.
+ The Commission's Complaint, filed on May 21, 2004, alleged various fraudulent practices in connection with the financial statements of Just for Feet, Inc., a large shoe and sports apparel retailer formerly headquartered in Birmingham, Alabama.  The Complaint alleged that Wynne, a vice president at Just for Feet, and others, among other things, recorded on Just for Feet's books unearned receivables and failed to create an adequate reserve for excess or obsolete inventory. The overstatement of income and assets resulting from this misconduct was reflected on Just for Feet's financial statements included in its Form 10-K filed for fiscal year 1998, Forms 10-Q filed for the first and second quarters of fiscal year 1999, and in its registration statements on Forms S-8 and S-4 filed in May and June of 1999, respectively.
+See also: L.R.  18139  (May 15, 2003); L.R.  18571  (February 6, 2004); L.R.  18575  (February 13, 2004); L.R.  18731  (June 1, 2004); and L.R.  19163  (March 31, 2005); L.R.  19438  (October 20, 2005); and L.R.  19533  (January 20, 2006).
+ SEC Complaint in this matter  -->
+&nbsp;
+           Return to top
+                 SEC homepage
+                                                     About the SEC
+           Budget &amp; Performance
+           Careers
+           Commission Votes
+           Contact
+           Contracts
+                                                     Transparency
+           Accessibility &amp; Disability
+           Super Intelligence
+           FOIA
+           Inspector General
+           No FEAR Act Data
+           Ombuds
+           SEC Excess Personal Property Guidance
+                                                     Websites
+           Investor.gov
+           Related Sites
+           USA.gov
+                                                     Site Information
+           Plain Writing
+           Privacy &amp; Security
+           Site Map
+               Stay connected. Sign up for email updates.
+   Your email address
+   Sign Up
+                 X
+                 Facebook
+               Instagram
+                 RSS
+                 YouTube
+               Email Updates

raw/aaer/2006/AAER-2403.pdf ADDED Viewed

Binary file (47.2 kB). View file

raw/aaer/2006/AAER-2409.txt ADDED Viewed

	@@ -0,0 +1,876 @@

+UNITED STATES OF AMERICA
+BEFORE THE
+SECURITIES AND EXCHANGE COMMISSION
+SECURITIES ACT OF 1933
+Release No.  8675 / APRIL 12, 2006
+SECURITIES EXCHANGE ACT OF 1934
+Release No.  53633 / April 12, 2006
+ACCOUNTING AND AUDITING ENFORCEMENT
+Release No.  2409 / April 12, 2006
+ADMINISTRATIVE PROCEEDING
+File No.  3-12261
+In the Matter of
+PKF, ANTHONY FREDERICK JOHN
+MEAD, FCA, and STUART JOHN
+BARNSDALL, ACA,
+Respondents.
+ORDER INSTITUTING PUBLIC
+ADMINISTRATIVE AND CEASE-
+ AND-DESIST PROCEEDINGS
+PURSUANT TO SECTION 8A OF THE
+SECURITIES ACT OF 1933, SECTION
+21C OF THE SECURITIES EXCHANGE
+ACT OF 1934, AND RULE 102(e) OF THE
+COMMISSION’S RULES OF PRACTICE,
+MAKING FINDINGS, AND IMPOSING
+REMEDIAL SANCTIONS AND A
+CEASE-AND-DESIST ORDER
+ I.
+ The Securities and Exchange Commission (“SEC” or “Commission”) deems it
+appropriate that public administrative and cease-and-desist proceedings be, and hereby are,
+instituted against PKF, Anthony Frederick John Mead, FCA, and Stuart John Barnsdall, ACA
+(“Barnsdall”) (collectively “Respondents”) pursuant to Section 8A of the Securities Act of 1933
+(“Securities Act”), Section 21C of the Securities Exchange Act of 1934 (“Exchange Act”), and
+Rules 102(e)(1)(ii) and 102(e)(1)(iii) of the Commission’s Rules of Practice.1
+1  Rule 102(e)(1)(ii) provides, in pertinent part, that:
+The Commission may ... deny, temporarily or permanently, the privilege of appearing or practicing before it ... to
+any person who is found … to have engaged in … improper professional conduct.
+Rule 102(e)(1)(iii) provides, in pertinent part, that:
+The Commission may … deny, temporarily or permanently, the privilege of appearing or practicing before it ... to
+any person who is found … to have willfully violated … any provision of the Federal securities laws or the rules and
+regulations thereunder.
+II.
+ In anticipation of the institution of these proceedings, Respondents have submitted Offers
+of Settlement (the “Offers”) which the Commission has determined to accept.  Solely for the
+purpose of these proceedings and any other proceedings brought by or on behalf of the
+Commission, or to which the Commission is a party, and without admitting or denying the findings
+herein, except as to the Commission’s jurisdiction over them and the subject matter of these
+proceedings, which are admitted, Respondents consent to the entry of this Order Instituting Public
+Administrative and Cease-and-Desist Proceedings Pursuant to Section 8A of the Securities Act of
+1933, Section 21C of the Securities Exchange Act of 1934, and Rule 102(e) of the Commission’s
+Rules of Practice, Making Findings, and Imposing Remedial Sanctions and a Cease-and-Desist
+Order, as set forth below.2
+III.
+ On the basis of this Order and Respondents’ Offers, the Commission finds3 that:
+A. RESPONDENTS
+1. PKF, an accounting firm based in the United Kingdom, was AremisSoft
+Corporation’s (“AremisSoft’s”) principal outside auditor from before AremisSoft was a public
+company until January 23, 2002.  PKF is the eighth largest firm of accountants and business
+advisers in the United Kingdom, with more than 1,500 partners and staff operating from 25
+offices in the United Kingdom.4  PKF is a member firm of PKF International Ltd., a network of
+independent firms of accountants and business advisers with more than 430 member firm offices,
+which have 12,800 staff and partners in more than 100 countries.
+2. Anthony Frederick John Mead (“Mead”) , age 64, was a partner of PKF until
+he took his standard retirement on April 6, 2002.  He is a Fellow of the Institute of Chartered
+Accountants (“FCA”) in England and Wales and was the audit partner for PKF’s audits of
+AremisSoft while AremisSoft was a public company.  Mead had specific responsibilities for
+planning, supervising, and reviewing the audit work.
+2  Simultaneously with this proceeding, the Commission filed a settled action in which PKF and Mead, without
+admitting or denying the allegations in the Commission’s complaint, consented to the entry of final judgments by
+the U.S. District Court for the Southern District of New York pursuant to Section 21(d) of the Exchange Act.  The
+Commission’s complaint alleges that PKF violated Section 10A of the Exchange Act, and that Mead violated
+Section 10A(a) of the Exchange Act.  The final judgment as to PKF (1) orders PKF to pay a $2 million civil penalty;
+and (2) orders PKF to pay disgorgement of audit fees of $309,048 and to pay prejudgment interest thereon of
+$87,090.  The final judgment as to Mead orders Mead to pay a $50,000 civil penalty.
+3  The findings herein are made pursuant to Respondents’ Offers and are not binding on any other person or entity in
+this or any other proceeding.
+4  On May 23, 2005, PKF converted to PKF (UK) LLP, a limited liability partnership.  For purposes of this order
+PKF will refer to PKF and PKF (UK) LLP.
+ - 2 -
+3. Barnsdall, age 44, is an audit partner of PKF.  He was the concurring partner on
+PKF’s audit of AremisSoft’s fiscal year 2000 financial statements.  Barnsdall is an Associate of
+the Institute of Chartered Accountants (“ACA”) in England and Wales.
+B. OTHER RELEVANT PARTIES
+1. Savvides & Partners/PKF Cyprus (“PKF Cyprus”) is an accounting firm with
+offices in Limassol, Cyprus and Nicosia, Cyprus.  It is a member of PKF International Ltd.  PKF
+Cyprus performed audit work on several AremisSoft subsidiaries during the year 2000 audit of
+AremisSoft.
+2. Pavlos Meletiou  (“Meletiou”) was a partner of PKF Cyprus while AremisSoft
+was a public company.  Meletiou was responsible for the audits and reviews of the AremisSoft
+subsidiaries that PKF Cyprus conducted.  He was a certified accountant in Cyprus until his
+license was revoked by the Institute of Certified Public Accountants of Cyprus (“ICPAC”) in
+June 2005 for, among other things, failing to comply with independence rules and failing to
+submit correct information to the ICPAC.
+3. AremisSoft Corporation, a Delaware corporation headquartered in London, was
+an international software company with offices in New Jersey, London, Cyprus, and India.
+AremisSoft became a public company in April 1999 through an initial public offering of 3.3
+million shares.  Until trading in AremisSoft stock was halted on July 30, 2001, its shares
+(symbol:  AREM) traded on the Nasdaq National Market System.  On August 29, 2001, Nasdaq
+delisted AremisSoft’s common stock from the Nasdaq system.  In a settlement with the
+Commission, AremisSoft consented to a judgment enjoining it from violating the antifraud and
+reporting provisions of the federal securities laws.  The judgment, entered on July 22, 2002,
+binds AremisSoft’s successor, Softbrands, Inc.  In the settlement, AremisSoft consented to the
+issuance of a Commission Order revoking the registration of its common stock.  The
+Commission’s Revocation Order was issued on July 31, 2002.  AremisSoft’s fiscal year ended on
+December 31.
+C. FACTS
+1. Summary of Fraud at AremisSoft
+AremisSoft went public in April 1999, and reported revenues of $52.6 million for 1998,
+$73.4 million for 1999, and $123.6 million for 2000.  In November 2000, AremisSoft had a
+market capitalization of more than $1 billion.  Eight months later, the company failed to file its
+second quarter 2001 Form 10-Q with the Commission.  Shortly thereafter, as part of an internal
+investigation, PKF conducted a special forensic review, which found that AremisSoft could not
+confirm receipt of $5.4 million in revenues on its most significant contract.  Thereafter
+AremisSoft announced that it could not substantiate approximately $90 million of the revenues
+the company reported in 2000.  On March 15, 2002 AremisSoft filed for bankruptcy.
+AremisSoft and its co-chairmen and co-CEOs Roys Poyiadjis (“Poyiadjis”) and
+Lycourgos Kyprianou (“Kyprianou”) (sued by the Commission in SEC v. AremisSoft
+ - 3 -
+Corporation, Roys Poyiadjis, Lycourgos Kyprianou, et al., Civil Action No. 01 CV 8903
+[S.D.N.Y.]) engaged in a number of fraudulent practices to make it appear as if AremisSoft was
+a sprawling international software company with accelerating sales growth.  AremisSoft booked
+fictitious sales and accounts receivable and overstated earnings in two Cyprus-based subsidiaries,
+AremisSoft (EE.ME.A.) Ltd. (“EEM”) and L.K. Global Information Systems B.V. (“LK
+Global”).  In its 2000 Form 10-K, AremisSoft reported that $97.5 million of its $123.6 million in
+revenues (nearly 80%) came from these two Cyprus-based subsidiaries, when, in fact, together,
+the two subsidiaries had just $1.7 million in revenues for the year.
+To hide its revenue and earnings shortfall in EEM and LK Global, AremisSoft reported
+acquisitions at inflated prices, making it seem as if cash AremisSoft collected from customers
+was used to purchase companies.  In December 1999, AremisSoft announced that it had acquired
+a company called e-nnovations.com for $14.5 million in cash.  In its 2000 Form 10-K,
+AremisSoft reported that it had acquired two companies in December 2000, e-ChaRM Pvt Ltd.
+(“e-ChaRM”), for cash of $10.9 million and Denon International Ltd. (“Denon”), for cash of
+$7.34 million.  In September 2001, AremisSoft acknowledged in a press release that the three
+acquisitions had been reported at amounts not substantiated by information developed in the
+internal investigation.  Rather than the $7.34 million to $14.5 million purchase prices reported,
+the actual prices paid ranged from approximately $200,000 to $400,000.
+AremisSoft also grossly misstated its cash balance as of December 31, 2000.  AremisSoft
+claimed to have $33.33 million in cash, but $9.98 million of that cash was actually in
+Kyprianou’s personal bank account and $10.7 million of it was received by AremisSoft in mid-
+January 2001.  Accordingly, AremisSoft should have reported no more than $12.65 million of
+cash at December 31, 2000, and should have reported a $10.7 million reduction in stockholders’
+equity.
+2. PKF’s Involvement with AremisSoft
+At the time of the 2000 audit, PKF had been AremisSoft’s outside auditor for a number
+of years, including the period before AremisSoft’s initial public offering in April 1999.  PKF
+audited AremisSoft’s annual financial statements and, beginning in 2000, conducted reviews of
+its quarterly financial statements.5  AremisSoft was PKF’s only client to file with the
+Commission.
+PKF used the work and reports of other auditing firms to report on AremisSoft’s 2000
+consolidated financial statements.  One of the firms, PKF Cyprus, a Cyprus-based accounting
+firm, issued unqualified audit reports on EEM and LK Global.  Meletiou, a PKF Cyprus partner,
+signed or directed the issuance of the audit reports for PKF Cyprus.  PKF assumed complete
+responsibility under generally accepted auditing standards (“GAAS”) for the work of the other
+auditing firms during the 2000 audit and did not refer to the work of other auditors in its audit
+report or in AremisSoft’s 2000 filing with the Commission.6
+5  PKF also reviewed AremisSoft’s financial statements as of and for the three months ended March 31, 2001, filed
+with the Commission on May 15, 2001.
+6  GAAS require that an audit “report should contain a clear-cut indication of the auditor’s work, if any, and the
+degree of responsibility the auditor is taking.”  See AICPA, CODIFICATION OF STATEMENTS ON AUDITING
+STANDARDS (“AU”) 150.02.  PKF could have referred to the work done by PKF Cyprus and the other audit firms
+ - 4 -
+On March 22, 2001, PKF issued an unqualified audit report on AremisSoft’s 2000
+financial statements, which stated that PKF had conducted its audits in accordance with GAAS
+and that AremisSoft’s financial statements presented AremisSoft’s consolidated financial
+position fairly, in conformity with generally accepted accounting principles (“GAAP”).  The
+unqualified audit report was filed with the Commission as part of AremisSoft’s Form 10-K for
+2000.
+Contrary to the representations in PKF’s audit report, AremisSoft’s 2000 financial
+statements did not conform to GAAP and the audit was not conducted in accordance with GAAS
+in effect at the time of the audit.7  On December 7, 2001, PKF advised AremisSoft that its audit
+reports “must no longer be associated with [AremisSoft’s financial] statements and that such
+auditors’ reports should no longer be relied on.”
+3. PKF and Mead Engaged in Improper Professional Conduct
+With respect to accountants, Rule 102(e)(1) provides that “improper professional
+conduct” includes “highly unreasonable conduct that results in a violation of applicable
+professional standards in circumstances in which an accountant knows, or should know, that
+heightened scrutiny is warranted.”  PKF and Mead engaged in improper professional conduct in
+connection with the audit of AremisSoft’s 2000 financial statements.  PKF and Mead engaged in
+highly unreasonable conduct that resulted in repeated violations of applicable professional
+standards in circumstances in which PKF and Mead knew or should have known warranted
+heightened scrutiny.
+(a) Failure to Adequately Staff the Audit
+Under GAAS (AU 150.02), audits are required to be performed by a person or persons
+having adequate technical training and proficiency as an auditor.  The auditor having ultimate
+authority for the audit should “know, at a minimum, the relevant professional accounting and
+auditing standards and should be knowledgeable about the client.”  The auditor “with final
+responsibility is responsible for the assignment of tasks to, and supervision of, assistants.”  (AU
+230.06).
+ Partners and staff assigned to the AremisSoft  audit had little, if any, experience in GAAS
+or GAAP.  Neither the audit partner, Mead, nor the concurring partner on the 2000 audit,
+Barnsdall, had significant training or experience in GAAS or GAAP.  The PKF staff person with
+the most significant involvement with the 2000 audits of EEM and LK Global had limited
+familiarity with GAAS or GAAP and no training in conducting audits of U.S. companies.
+Likewise, PKF Cyprus had little knowledge of GAAS or GAAP or experience in conducting
+U.S. company audits.  Meletiou also had no significant training or experience in conducting
+in the audit report, thereby sharing audit responsibility with them.  If a principal auditor refers to the work of another
+auditor, the report is expanded to indicate the division of responsibility and magnitude of the portion of the financial
+statements audited by the other auditor (AU 543, Part of Audit Performed by Other Independent Auditors).  By not
+referring to the work of PKF Cyprus or other accounting firms involved in the audit, PKF took full responsibility for
+their work.
+7  In this order, GAAP and GAAS refer to U.S. GAAP and U.S. GAAS, respectively.
+ - 5 -
+audits under GAAS or GAAP.  PKF did not comply with GAAS, notwithstanding that a director
+of another PKF International member firm in the United States provided certain advice
+concerning GAAS and GAAP to PKF during its 2000 audit engagement in his role as filing
+reviewer.  The filing reviewer, however, was not aware of the nature and extent of the warning
+signs, nor was he involved in all audit matters.
+(b) Failure to Obtain Sufficient Competent Evidential Matter
+GAAS requires that an audit of the financial statements be planned and performed “to
+obtain reasonable assurance about whether the financial statements are free of material
+misstatement, whether caused by error or fraud.”  (AU 316.01).  Auditors must consider potential
+fraud factors when planning and performing the audit.  GAAS states that the “assessment of the
+risk of material misstatement due to fraud is a cumulative process” and one that should be
+ongoing throughout the audit.  (See AU 316).  Auditors must obtain sufficient competent
+evidence to afford a basis for an opinion regarding the financial statements under audit.  (AU
+326.01).  The validity and sufficiency of required evidence depends on the circumstances and the
+auditors' judgment, but should be “persuasive” though it need not be “convincing.”  (AU 326.02
+& .21-.23).  With respect to such judgment, an auditor must maintain an attitude of professional
+skepticism and assess the risk that errors and irregularities may cause the financial statements to
+contain a material misstatement.  (AU 316.13).  An assessment of higher risk may cause the
+auditor to expand the extent of procedures applied or modify the nature and/or the timing of
+procedures to obtain more persuasive evidence.
+PKF and Mead failed to comply with these requirements and failed to exercise the
+required heightened degree of professional skepticism or to obtain sufficient competent
+evidential matter concerning AremisSoft’s financial statements -- even after being confronted
+with numerous warning signs before and during the performance of the audit that should have
+alerted PKF and Mead to the possibility that AremisSoft’s financial statements were materially
+misstated.
+Anonymous Letter, Suspicious Contracts, and CFO Resignation
+PKF had been AremisSoft’s auditor until May 15, 1998, when the London office of a
+“Big Four” accounting firm was engaged to audit AremisSoft’s financial statements in
+connection with AremisSoft’s registration statement (Form S-1) filed with the Commission on
+July 1, 1998.8  On July 14, 1998, the Big Four accounting firm received a copy of an anonymous
+letter addressed to the SEC.  According to the letter:
+AremisSoft wants to register statements to sell shares on the United
+States Nasdaq exchange.  These statements will contain fraudulent
+information about revenue ... for large [sales] of management services
+and contracts.  The chairman and managing directors and [lawyers] in
+the United Kingdom are [recording revenue] from some former
+directors, some customers, some not, to issue purchase notes of one
+million dollars or greater each for services to be provided .... This
+done to make future look good for sells [sic] of shares.
+8  This registration statement never went effective.
+ - 6 -
+Review accounts and you will locate.
+When the Big Four firm reviewed AremisSoft’s draft financial statements for the six months
+ended June 30, 1998, it found that the financial statements included revenue from three contracts
+for more than $1 million each.  The contracts were purportedly being performed in AremisSoft’s
+Indian office (which had no significant previous sales), and the customers were allegedly in
+Czechoslovakia and Croatia (where the company had not previously done business).  The Big
+Four firm immediately requested full details of the contracts, including agreements and customer
+correspondence, and consulted the underwriters; they had no knowledge of the contracts, despite
+having been provided a list of AremisSoft’s work in the pipeline just four months earlier.
+Based on this information, the Big Four firm undertook an investigation into the three
+contracts, which uncovered numerous irregularities, including:  (1) all negotiations with
+customers on the contracts were undertaken by Kyprianou and communications were claimed to
+have been by e-mail, no copies of which were maintained; (2) copies of the contracts were held
+in Kyprianou’s private office in Cyprus rather than the corporate offices in London; (3) all
+information relating to the contracts was in India; (4) no cash was received from the customers;
+(5) no payments were made to the consultants performing sub-contracting work on the contracts;
+and (6) the customer addresses appeared to be small offices rather than industrial concerns.
+Moreover, staff from one of the Big Four firm’s Indian offices raised doubts as to whether the
+main subcontractor on the contracts was capable of performing the contract work.
+As a result of its review, the Big Four firm concluded that AremisSoft’s “percentage of
+completion” method of revenue recognition for the three contracts was improper.  Rather, it
+determined, the “completed contract” method should be used, resulting in deletion of all revenue
+and gross profit related to the purported contracts from AremisSoft’s income statement and
+deferred recognition until the contracts were completed and the related fees collected.
+AremisSoft agreed to the change.
+On October 9, 1998, the Big Four firm received a telefax from AremisSoft’s then chief
+financial officer (“CFO”), complaining of his inability to get “access to … financial records” to
+“ensure that the [financial statements] are objective, true and fair.”  The CFO expressed concern
+about Kyprianou’s “significant involvement and influence in the preparation of the [financial
+statements].”  In a telephone conversation with the Big Four firm audit partner, the CFO denied
+having any knowledge of the three contracts prior to April 1998.
+On October 15, 1998, representatives from the Big Four firm met with Poyiadjis,
+Kyprianou, AremisSoft’s then CFO, and others, to discuss the CFO’s allegations and the
+accounting for the three contracts.  Also attending the meeting and introduced as a prospective
+director of AremisSoft was a corporate finance partner from PKF, who, according to
+AremisSoft’s year 2000 Form 10-K, was then PKF’s head of the United Kingdom and European
+mergers and acquisition group.  There were heated exchanges concerning the contracts at the
+meeting.  The PKF corporate finance partner stated that the Big Four firm was unable to verify
+the contracts because it did not understand AremisSoft’s business, and suggested that AremisSoft
+re-engage PKF to perform the audit work.
+Shortly thereafter, AremisSoft’s CFO resigned and Poyiadjis assumed the CFO duties.  In
+November 1998, the “Big Four” firm was informed that AremisSoft had made a decision to
+ - 7 -
+re-appoint PKF as its independent auditor and the engagement of the “Big Four” firm was
+discontinued as of December 16, 1998.  PKF was then re-engaged as AremisSoft’s independent
+auditor.  The PKF corporate finance partner who attended the October 15 meeting became the
+relationship partner and Mead became the audit partner on the AremisSoft audit engagement.
+On or about this time, PKF obtained copies of the anonymous letter and the October 9 telefax
+from AremisSoft’s CFO.
+AremisSoft’s financial statements eventually filed in connection with its initial public
+offering in April 1999 included the revenues and gross profit from the three large contracts, and
+employed the percentage of completion method.  These financial statements were audited by
+PKF.  AremisSoft continued to use that method throughout its existence as a public company.
+The three large contracts were shams.  AremisSoft never performed any services related
+to the contracts and never collected any revenues from the purported customers.
+AremisSoft’s Inadequate Accounting Staff
+and Questionable Revenue Recognition
+ In its 1999 management letter, issued in March 2000, PKF expressed concern that
+AremisSoft’s internal “accounting function [relied] very heavily on its [outside] professional
+advisers in connection with US reporting and disclosure requirements.”  On May 2, 2000, the
+Chairman of AremisSoft’s audit committee recommended in a memorandum to Kyprianou and
+Poyiadjis -- forwarded to PKF’s Mead -- that AremisSoft hire a “senior financial person,” citing
+a “few close calls with respect to our financial reporting,” which had been brought to the audit
+committee’s attention.  But in PKF’s 2000 audit checklist entitled “Consideration of Fraud and
+Error,” the question whether there was “significant or prolonged under-staffing of [AremisSoft’s]
+accounting department” was answered in the negative.
+ During PKF’s interim work during 2000, PKF saw additional warning signs that should
+have further heightened concern about AremisSoft’s accounting.  During PKF’s quarterly review
+of AremisSoft’s June 30, 2000 financial statements, a PKF staff accountant wrote that an
+AremisSoft employee had told him about “a potential cut-off problem,” i.e., improper delay of
+revenue.  The staff accountant’s notes say “the June 2000 quarter accounted for a large element
+that should have been booked in the first quarter of the year.”
+ PKF and Mead did not appropriately consider how these risk factors affected the audit,
+nor revise the audit plan, nor took any additional steps to gain an understanding of AremisSoft’s
+operations sufficient to detect the ongoing fraud.
+9
+9  In addition, in December 2000, the filing reviewer from a PKF-member firm in the United States cautioned PKF
+staff and Mead about potential improper revenue acceleration by AremisSoft in one of its UK divisions.  In an e-
+mail, he wrote:
+It seems that [AremisSoft is] trying hard to recognize more revenue in the year
+2000.  My suggestion is that you include in your audit procedures additional
+steps to ensure that revenue is being properly recorded.
+PKF staff forwarded this e-mail to the PKF manager on the engagement, adding:  “This came in from [the PKF
+International Ltd. member firm director] last week—he seems quite concerned!”  While PKF addressed this issue in
+the context of its audit of the AremisSoft UK division, it never considered how this information affected other
+AremisSoft divisions or the overall audit.
+ - 8 -
+Warning Signs in Cyprus
+ Though AremisSoft’s Cyprus-run operations re presented just a fraction of its business
+before it went public, they accounted for nearly 80% of AremisSoft’s revenues and over 50% of
+its assets by the time of the 2000 audit.  Accordingly, and because PKF took responsibility for
+the entire audit, Mead assigned a PKF accountant to Cyprus in late January 2001 to work with
+Meletiou, the PKF Cyprus partner, on the Cyprus-based subsidiaries.  But that staff accountant
+was relatively junior and had no training or background in GAAP or GAAS.
+Although AremisSoft’s CEO and CFO had offices in Cyprus and EEM and LK Global
+were both headquartered there, the staff accountant learned upon his arrival in Cyprus that the
+contracts and accounting records for both subsidiaries were actually in India, not Cyprus.  This
+made it impossible for the staff accountant to conduct substantive revenue testing in Cyprus,
+although the staff accountant did prepare audit work programs for Meletiou to use in performing
+the audit.  The staff accountant notes show that he told Mead that documents necessary for
+testing were unavailable and alerted him to “shortcomings of the audits being performed,
+particularly the lack of documented testing, and address [sic] of fundamental issues such as
+debtor recoverability, cut-off testing, systems understanding, and post balance sheet event
+reviews.”  His notes also reflect that, when he advised Meletiou about his concerns, especially
+the limited audit testing, Meletiou “suggested that the testing be carried out after the audit, i.e.,
+April/May 2001!!!”  The staff accountant telephoned Mead regarding his conversation with
+Meletiou.
+ In early February 2001, the staff accountant retu rned with Mead to Cyprus to conduct the
+audit work he was previously unable to perform, including a review of previously unavailable
+documents.  But no one from PKF ever reviewed any cash receipts related to purported contracts.
+Instead, PKF limited its testing based on its reliance on AremisSoft’s internal control system.
+After the second trip to Cyprus, Mead sent a telefax to Meletiou enumerating a number of
+outstanding steps required to be completed prior to the audit close and emphasizing that Meletiou
+needed to travel to India to conduct audit tests on AremisSoft’s internal controls.  Meletiou
+agreed he or someone on his staff would go to India for the systems testing, but no one from PKF
+determined whether such testing ever occurred.
+Account Managers in 2000
+PKF and Mead learned for the first time, during the January 2001 trip to Cyprus, that
+neither EEM nor LK Global had any regular contact with their customers.  Rather, since 2000,
+both had purportedly used third party contractors -- called “account managers” -- to bill
+customers, collect funds due, and remit the difference net of expenses to AremisSoft, making
+“periodic reports” of gross sales and expenses for incorporation in AremisSoft’s books and
+records.  The EEM and LK Global general ledgers reflect that neither subsidiary recorded
+accounts receivable by customer; both relied only on reports of the account managers.
+Despite the account managers’ obvious importance to AremisSoft and their role as sole
+source for EEM and LK Global sales and expense data, neither PKF nor Mead ever (a)
+developed any audit procedures to examine transactions with the account managers; (b) reviewed
+payments from account managers; (c) communicated with account managers; (d) saw any of the
+“periodic reports;” (e) took any steps to audit transactions between AremisSoft and the account
+managers or between the account managers and AremisSoft’s customers; or (f) designed any
+ - 9 -
+procedures to test AremisSoft’s progress on contracts.  Instead PKF and Mead relied solely on
+AremisSoft’s representations with respect to the sham contracts and the review of the PKF
+Cyprus audit files, which included false documentation.
+EEM and LK Global Audit File Deficiencies
+On March 9, 2001, Meletiou brought the EEM and LK Global audit files to PKF’s
+London office.  Mead spent five hours reviewing the EEM audit files and assigned a second PKF
+partner, who had no knowledge of AremisSoft, to review the LK Global audit files.10
+ Mead found numerous problems in the EEM a udit file, including serious deficiencies in
+two significant audit areas -- cash and accounts receivable.  Mead’s notes show the workpapers
+included only copies, not originals, of cash confirmations, and both cash and accounts receivable
+confirmations were “apparently not received directly by PKF [Cyprus].”  Moreover,
+confirmations of deposits and payables purportedly from numerous different customers and
+vendors were “poor copies,” not originals, and inventory confirmations were provided by
+AremisSoft management rather than third parties.
+The second PKF partner found multiple problems in the LK Global audit file including
+similar problems with cash and accounts receivable.  His three page hand-written notes to Mead
+noted that:
+• LK Global had no bank account;
+• The file contained copies of accounts receivable confirmations, not
+originals;
+• The file contained no evidence of how accounts receivable confirmations
+were carried out;
+• The file contained no evidence of an overall analytical review;
+• The file contained no evidence of audit planning, an adopted audit
+approach, or a risk assessment;
+• The file contained no evidence of a review of internal controls;
+• The file included no evidence of a subsequent events review; and
+• There was no engagement letter in the file.
+Late that same night, the second PKF partner wrote Mead an e-mail from his home computer that
+concluded:
+10  Approximately two and one-half weeks earlier, on February 20, 2001, AremisSoft’s audit committee held a
+telephone conference call concerning its earnings release for the 2000 year.  PKF participated in the call and
+expressed no objection to the release.  The next day, February 21, AremisSoft issued its year 2000 earnings release.
+ - 10 -
+I suppose I am nervous about the fact that we have a company
+generating $20 million + [sales] and quite significant profits, all of
+it being on paper with no evidence of any cash – it just seems
+suspicious.  The more I think about it, the more unusual the whole
+thing seems and I think we need convincing explanations before
+sign off.
+On March 20, 2001, Mead received an e-mail from Meletiou asserting that “[a]ll outstanding
+points that should be dealt with before signing the report have been completed except the
+management letter which is under preparation.”  But no one from PKF ever collected any
+documents or other evidence to support Meletiou’s contention.
+EEM and LK Global General Ledger Irregularities
+The EEM and LK Global general ledgers included in PKF’s files showed obvious
+irregularities.  Most of the ledger entries simply reflect assets netted against liabilities to
+eliminate account balances. All of the entries appear to have been created at the same time --
+after AremisSoft’s year-end.  Moreover, the ledgers reflected cash receipts of only $4.3 million
+for the entire year, even though EEM and LK Global reported more than $97 million in
+combined sales that year.
+Questionable AremisSoft Acquisitions
+AremisSoft reported in its 1999 and 2000 Forms 10-K that it paid over $32 million in
+cash to acquire three companies -- e-nnovations.com., e-ChaRM, and Denon.  However, PKF
+and Mead failed to examine any documents purportedly evidencing the payments.  Had PKF or
+Mead matched the transactions to payment documents, it would have been discovered that, rather
+than the $7 to $14.5 million purchase prices reportedly paid for these companies, the actual
+prices ranged from approximately $200,000 to $400,000.
+Inadequate Third Party Confirmations
+At no time during its audit did PKF or Mead obtain original accounts receivable or cash
+confirmations, verify that the confirmations had been sent directly to PKF Cyprus or PKF, or
+review subsequent cash receipts to corroborate that the receivables in fact existed.  No one from
+PKF reviewed accounts receivable remittance advices or attempted to contact any of
+AremisSoft’s purported customers.  Had PKF or Mead taken any of these steps, they would have
+learned that the accounts receivable and associated revenues were fraudulent.  And while the
+PKF Cyprus audit workpapers reviewed by PKF included confirmations from LK Global
+creditors, in what should have been an obvious irregularity that should have warranted
+heightened scrutiny, all creditors confirmed that they owed money to LK Global rather than the
+other way around.
+ The accounts receivable confirmations in th e PKF Cyprus audit workpapers reviewed by
+PKF and Mead evidence additional irregularities that should have warranted heightened scrutiny.
+None are originals; many have identical or similar handwriting; and, according to the dates
+printed on the top of each, eight of seventeen were returned on the same two dates -- February 2
+or February 5, 2001.  The accounts receivable confirmations also were addressed to customers of
+AremisSoft rather than to account managers -- despite the company’s claim that the account
+managers, not the end users, were indebted to AremisSoft.
+ - 11 -
+ PKF and Mead understood from the PKF Cyprus audit files that EEM maintained a Swiss
+bank account containing $9.98 million of AremisSoft’s cash (nearly 30% of total cash) on
+December 31, but PKF and Mead did not obtain satisfactory audit evidence concerning the bank
+account that was included as cash on AremisSoft’s consolidated financial statements.  The
+unnumbered Swiss bank account, which nowhere appears on EEM’s ledger until December 23,
+2000, suddenly materialized immediately before AremisSoft’s year end.  The only evidence
+obtained by either PKF Cyprus or PKF from third parties related to the account is an irregular
+confirmation letter to Meletiou from a Swiss bank dated March 20, 2001 -- the same day as
+PKF’s audit report -- which states, without explanation, that “since 29th of December 2000, we
+hold an amount of $9.980.000 blocked in favor of [EEM].”  AremisSoft had no such account at
+any time during or before 2000.  But Kyprianou did have bank accounts at the Swiss bank.
+Kyprianou deposited proceeds of his AremisSoft stock sales in those accounts.
+ Finally, neither PKF nor Mead obtained cash confirmations for AremisSoft’s cash held at
+U.S. banks at December 31, 2000, even though the company reported $10.7 million in a U.S.
+bank as of that date.  But the $10.7 million was not in a U.S. bank account as of December 31,
+2000.  PKF’s workpapers show that the money was due to AremisSoft from Kyprianou and
+Poyiadjis stock options exercises in mid-December 2000.  PKF and Mead accepted the treatment
+of these funds as cash “in transit” as of December 31.  But the cash was not transferred from
+Poyiadjis’ Swiss bank accounts until mid-January.  Therefore those funds should not have been
+included in AremisSoft’s cash balance at December 31, 2000.
+(c) Failure to Obtain Sufficient Understanding of Internal Controls
+PKF and Mead failed to comply with GAAS (AU 150.02), which requires an auditor to
+obtain a sufficient understanding of a company’s system of internal controls to plan the audit and
+determine the nature, extent, and timing of testing to be performed.
+PKF and Mead relied on AremisSoft’s system of internal controls to limit substantive
+testing of revenue reported by EEM and LK Global but neither obtained a sufficient
+understanding of the internal controls for these subsidiaries.  PKF and Mead did not obtain
+evidence that the accounting systems in India existed or were tested by Meletiou, or travel to
+India to test the systems.
+(d) Failure to Properly Plan the Audit
+GAAS requires that the auditor plan the audit “to obtain reasonable assurance about
+whether the financial statements are free of material misstatement, whether caused by error or
+fraud.”  (AU 316.01).  In planning, the auditor must assess the risk of material misstatement due
+to fraud or error, which includes consideration of “conditions that may require extension or
+modification of audit tests, such as the risk of material errors or irregularities or the existence of
+related party transactions.”  (AU 311.03; see also AU 316A (“Consideration of Fraud in a
+Financial Statement Audit”)).  In addition, the risk assessment process should “be ongoing
+throughout the audit” and should consider whether the “nature of audit procedures performed
+may need to be changed to obtain evidence that is more reliable or to obtain additional
+corroborative information.”  (AU 316.28).  Contrary to GAAS, PKF and Mead failed to
+adequately plan the 2000 audit after learning of numerous facts that, either standing alone or in
+the context of other facts learned prior to the audit, warranted heightened scrutiny that should
+ - 12 -
+have alerted them to the possibility that AremisSoft’s financial statements might be misstated
+due to fraud.
+In December 1998, PKF concluded that Kyprianou’s control and influence was a
+“general risk factor.”  However, neither PKF nor Mead considered this factor in planning the
+2000 audit and did not design or implement any audit procedures in consideration of
+Kyprianou’s control in its audit of AremisSoft’s year 2000 financial statements.
+GAAS requires a specific substantive risk assessment and consideration of “that
+assessment in designing the audit procedures to be performed.”  (AU 312 & 316).  But PKF and
+Mead never undertook a substantive risk analysis in planning the 2000 audit; the audit planning
+was perfunctory at best.  PKF and Mead merely used standard checklist work programs that were
+not modified to account for AremisSoft’s high risk environment.  Despite being presented with
+numerous warning signs during its audit, PKF and Mead failed to design audit procedures to test
+AremisSoft’s revenues, accounts receivable, and cash accounts more extensively than originally
+planned or to heighten the scrutiny in the audit of the Cyprus subsidiaries.  Moreover, despite
+numerous warning signs, PKF and Mead failed to reassess whether the “nature of audit
+procedures performed [needed] to be changed to obtain evidence that is more reliable or to
+obtain additional corroborative information.”  (AU 316.52).
+(e) Failure to Exercise Due Professional Care and Professional
+Skepticism
+ GAAS requires that auditors exercise due prof essional care in performing an audit and in
+preparing the audit report.  (AU 230.01).  Due professional care requires that the auditor exercise
+professional skepticism in performing audit and review procedures and gathering and analyzing
+audit evidence.  (AU 230.07-.08).  “In exercising professional skepticism, the auditor should not
+be satisfied with less than persuasive evidence because of a belief that management is honest.”
+(AU 230.09).  Exercise of professional skepticism requires auditors to demonstrate a questioning
+mind and to critically assess audit evidence.  (AU 230; see also AU 316.13).
+For all the reasons stated in the paragraphs above, PKF and Mead acted unreasonably in
+failing to exercise due professional care and professional skepticism in violation of this standard.
+(f) Failure to Issue Accurate Audit Reports
+ GAAS requires that the auditor’s report cont ain an opinion on the financial statements
+taken as a whole and contain a clear indication of the character of the auditor’s work.  (AU
+508.04).  The auditor can determine that he is able to issue an audit report containing an
+unqualified opinion only if he has conducted his audit in accordance with GAAS and the
+financial statements comply with GAAP.  (AU 508.07 & .22).
+ In auditing AremisSoft’s financial statem ents, PKF and Mead acted unreasonably in
+rendering audit reports containing unqualified opinions.  Mead signed and transmitted to
+AremisSoft's counsel PKF’s audit report on AremisSoft’s year 2000 financial statements before
+Barnsdall conducted his concurring partner review.  PKF partners and employees knew or should
+have known that AremisSoft’s financial statements did not comply with GAAP and that PKF and
+Mead did not conduct the audits in accordance with GAAS.  Nevertheless, PKF and Mead issued
+ - 13 -
+audit reports containing unqualified opinions that falsely stated that AremisSoft’s financial
+statements conformed to GAAP and that they had conducted the audits in accordance with
+GAAS.
+4. Barnsdall Engaged in Improper Professional Conduct
+With respect to accountants, Rule 102(e)(1) provides that “improper professional
+conduct” includes “repeated instances of unreasonable conduct, each resulting in a violation of
+applicable professional standards, that indicate a lack of competence to practice before the
+Commission.”  Barnsdall engaged in improper professional conduct.  His conduct was
+unreasonable and resulted in violations of applicable professional standards.
+As recited above at paragraph 3(e), AU 230.01, 230.07-.09, and 316.13, require auditors
+to exercise due professional care and maintain an attitude of professional skepticism, rely solely
+on persuasive audit evidence, demonstrate a questioning mind, and critically assess audit
+evidence.  GAAS also requires that auditors obtain sufficient competent evidential matter
+through inspection, observation, inquiries, and confirmations to afford a reasonable basis for an
+audit opinion.  (AU 326.01)
+ Barnsdall was the concurring partner on PKF’s audit of AremisSoft’s year 2000 financial
+statements but did not participate in PKF’s pre-2000 audits of AremisSoft.  He was required, as
+concurring partner, to be sufficiently involved in the review of the audit to reach informed
+conclusions regarding the quality and sufficiency of the audit procedures performed.  Barnsdall
+conducted his concurring partner review the day after Mead signed and transmitted to
+AremisSoft's counsel PKF’s audit report for inclusion in AremisSoft’s year 2000 Form 10-K.
+But he backdated his sign-off to the date of the audit report.  He did not, indeed could not, review
+the EEM and LK Global files because they had already been returned to Cyprus by the time of
+his file review.  And although he reviewed the lists of notes prepared by Mead and the PKF
+partner who reviewed the LK Global audit files, he did not sufficiently follow up to ensure that
+the issues raised in those reviews were resolved.  In fact, certain of the most significant issues
+were not resolved.  Barnsdall acted unreasonably in failing to exercise due professional care and
+to maintain an attitude of professional skepticism, and to assure that the audit workpapers
+evidenced that sufficient competent evidential matter had been obtained to support the audit
+report, in violation of these standards.
+D. LEGAL ANALYSIS
+ Section 17(a)(2) of the Secu rities Act prohibits obtaining money or property by means of
+untrue statements of material fact or misleading omissions of material fact in the offer or sale of
+securities.  Section 17(a)(3) prohibits engaging in transactions, practices or courses of business
+which operate or would operate as a fraud or deceit upon the purchaser in the offer or sale of
+securities.  Information is material where there is a substantial likelihood that a reasonable
+investor would consider the information important in making an investment decision.  Basic, Inc.
+v. Levinson, 485 U.S. 224, 231-32 (1988).  Establishing violations of Sections 17(a)(2) and
+17(a)(3) does not require a showing of scienter.  Aaron v. SEC, 446 U.S. 680, 697 (1980).
+ - 14 -
+Section 13(a) of the Exchange Act and Rule 13a-1 thereunder require all issuers with
+securities registered under Section 12 of the Exchange Act to file annual reports.  Exchange Act
+Rule 12b-20 requires an issuer to provide any additional information in the reports necessary to
+make the reports not misleading.  The obligation to file these periodic reports includes the
+requirement that they be complete and accurate in all material respects.  See, e.g., United States
+v. Bilzerian, 926 F.2d 1285, 1298 (2d Cir. 1991); SEC v. Savoy Indus., Inc., 587 F.2d 1149, 1165
+(D.C. Cir. 1978).  No showing of scienter is necessary to establish a violation of Section 13(a) of
+the Exchange Act and Rules 13a-1 and 12b-20.  See Savoy Indus., Inc., 587 F.2d at 1167; SEC v.
+Wills, 472 F. Supp. 1250, 1268 (D.D.C. 1978).
+ Section 13(b)(2)(A) of the Exchange Ac t requires issuers to “make and keep books,
+records, and accounts, which, in reasonable detail, accurately and fairly reflect the transactions
+and dispositions of the assets of the issuer.”  Section 13(b)(2)(B) requires issuers to devise and
+maintain a system of internal accounting controls sufficient to provide reasonable assurance that
+transactions are recorded as necessary to permit the preparation of financial statements in
+conformity with GAAP and to maintain the accountability of assets.  No showing of scienter is
+necessary to establish a violation of Sections 13(b)(2)(A) or 13(b)(2)(B).  See SEC v. McNulty,
+137 F.3d 732, 740-741 (2d Cir. 1998); SEC v. World-Wide Coin Investments, Ltd., 567 F. Supp.
+724, 749-51 (N.D. Ga. 1983).
+Rule 13b2-1 of the Exchange Act prohibits any person from directly or indirectly
+falsifying, or causing to be falsified, any book, record or account subject to Section 13(b)(2)(A).
+Scienter is not an element of a violation of Rule 13b2-1.  McNulty, 137 F.3d at 740-741.
+AremisSoft violated each of these provisions of the federal securities laws by, among
+other things, including false and misleading financial statements and information in its 2000
+report filed with the Commission and in registration statements that incorporated that report and
+financial information.
+PKF’s failure to comply with GAAS was a “cause of”11 AremisSoft’s violations.
+Likewise, Mead’s failure to comply with GAAS was a “cause of” AremisSoft’s violations.  PKF
+issued an audit report signed by Mead containing an unqualified opinion stating that PKF had
+conducted its audit of AremisSoft’s financial statements in accordance with GAAS, that
+AremisSoft’s financial statements were consistent with GAAP, and that AremisSoft’s reported
+results fairly represented its financial condition and results of operation.  Mead consented on
+behalf of PKF to the inclusion of this audit report in AremisSoft’s annual report on Form 10-K
+and in registration statements filed or in effect for that period.  However, the audit report was
+misleading because PKF and Mead failed to conduct the audit in accordance with GAAS.  PKF
+and Mead knew or should have known that AremisSoft’s reported financial results did not fairly
+present the company’s financial condition or its results of operations.
+11  As described in this Order, the standard for liability as “a cause of” a violation under Section 21C of the
+Exchange Act is negligence.  See KMPG LLP v. SEC, 289 F.3d 109, 112 (D.C. Cir. 2002).  In this instance, PKF and
+Mead engaged in an act or omission that they knew or should have known would contribute to the primary violation.
+See Section 8A(a) of the Securities Act; Section 21C(a) of the Exchange Act.
+ - 15 -
+In auditing AremisSoft, PKF and Mead failed to exercise due professional care and
+skepticism, failed to obtain sufficient competent evidential matter, failed to properly plan or
+expand the procedures in the face of risk of material misstatement of the financial statements
+including risk due to fraudulent accounting.
+Despite these accounting and auditing failures, and in further violation of GAAS, PKF
+did not issue a qualified or adverse audit report, or disclaim an ability to express any opinion at
+all, but instead issued an unqualified audit report signed by Mead on AremisSoft’s 2000 financial
+statements.  Accordingly, PKF’s failure to comply with GAAS was a cause of AremisSoft’s
+violations of Section 17(a)(2) and (3) of the Securities Act and Sections 13(a) and 13(b)(2)(A)
+and (B) of the Exchange Act and Rules 12b-20, 13a-1, and 13b2-1 thereunder.  Likewise,
+Mead’s failure to comply with GAAS was a cause of AremisSoft’s violations of Section 17(a)(2)
+and (3) of the Securities Act and Sections 13(a) and 13(b)(2)(A) and (B) of the Exchange Act
+and Rules 12b-20, 13a-1, and 13b2-1 thereunder.
+Section 10A of the Exchange Act requires each audit to include procedures designed to
+provide reasonable assurance of detecting illegal acts that would have a direct and material effect
+on the determination of financial statement amounts and if, in the course of conducting an audit,
+the auditor becomes aware of information indicating that an illegal act had or may have occurred,
+the auditor is required to investigate and notify management, the board of directors, or the audit
+committee.  No showing of scienter is necessary to establish a violation of Section 10A.  SEC v.
+Solucorp Industries, Ltd., 197 F. Supp. 2d 4 (S.D.N.Y. 2002).  Mead willfully violated Section
+10A(a) of the Exchange Act by failing to design appropriate audit procedures to determine
+whether or not senior management of AremisSoft had committed fraud.  PKF willfully
+12 violated
+Section 10A of the Exchange Act because during its audit PKF became aware of information
+indicating that illegal acts had or may have occurred but did not bring that information to the
+attention of AremisSoft’s management, its board of directors, or its audit committee.
+E. FINDINGS
+Based on the foregoing, the Commission finds that:
+1. PKF willfully violated Section 10A of  the Exchange Act and was a cause of
+AremisSoft’s violations of Sections 17(a)(2) and (3) of the Securities Act and Sections 13(a) and
+13(b)(2)(A) and (B) of the Exchange Act and Rules 12b-20, 13a-1, and 13b2-1 thereunder;
+2. PKF engaged in improper professional conduct within the meaning of Rule
+102(e)(1)(ii) of the Commission’s Rules of Practice in connection with PKF’s 2000 audit of
+AremisSoft’s financial statements, which were included in AremisSoft’s annual report on Form
+10-K and in AremisSoft registration statements filed or in effect for that period;
+12  “Willfully” as used in this Order means intentionally committing the act that constitutes the violation. See
+Wonsover v. SEC, 205 F.3d 408, 414 (D.C. Cir. 2000); Tager v. SEC, 344 F.2d 5, 8 (2d Cir. 1965).  There is no
+requirement that the actor also be aware that he or she is violating one of the Rules or Acts.
+ - 16 -
+3. Mead willfully violated Section 10A(a) of the Exchange Act and was a cause of
+AremisSoft’s violations of Sections 17(a)(2) and (3) of the Securities Act and Sections 13(a) and
+13(b)(2)(A) and (B) of the Exchange Act and Rules 12b-20, 13a-1, and 13b2-1 thereunder;
+4. Mead engaged in improper professional  conduct within the meaning of Rule
+102(e)(1)(ii) of the Commission’s Rules of Practice in connection with PKF’s 2000 audit of
+AremisSoft’s financial statements, which were included in AremisSoft’s annual report on Form
+10-K and in AremisSoft registration statements filed or in effect for that period;
+5. Barnsdall engaged in improper professiona l conduct within the meaning of Rule
+102(e)(1)(ii) of the Commission’s Rules of Practice in connection with PKF’s 2000 audit of
+AremisSoft’s financial statements, which were included in AremisSoft’s annual report on Form
+10-K and in AremisSoft registration statements filed or in effect for that period.
+F. UNDERTAKINGS BY PKF
+PKF (and its successor PKF (UK) LLP, a limited liability partnership) undertakes and
+agrees that it will not accept any audit engagements for new Commission registrant audit clients
+for a period of one year from the date of the issuance of this Order.
+PKF further undertakes to:
+1. enhance and provide training concerning the proper level of professional
+skepticism of staff and partners concerning high risk clients;
+2. develop and implement enhanced audit procedures concerning the assessment and
+identification of fraud risk indicators at the planning stage and throughout the
+audit engagement; and
+3. require the involvement of a Quality Control and Compliance Partner in all audit
+engagements of Commission registrants identified as high risk.
+In determining whether to accept PKF’s Offer, the Commission has considered these
+undertakings.
+IV.
+ In view of the foregoing, the Commission deems it appropriate to impose the sanctions
+agreed to in Respondents’ Offers.
+ Accordingly, IT IS HEREBY ORDERED, pur suant to Section 8A of the Securities Act
+and Section 21C of the Exchange Act that:
+A. Respondent PKF shall cease and desist  from committing any violations and any
+future violations of Section 10A of the Exchange Act; from committing or causing any violations
+and any future violations of Sections 17(a)(2) and 17(a)(3) of the Securities Act; and from
+ - 17 -
+causing any violations and any future violations of Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B)
+of the Exchange Act and Rules 12b-20 and 13a-1 thereunder.
+B. Respondent PKF is censured pursuant to Rule 102(e) of the Commission’s Rules
+of Practice.
+C. Respondent Mead shall cease and desist  from committing any violations and any
+future violations of Section 10A(a) of the Exchange Act; from committing or causing any
+violations and any future violations of Sections 17(a)(2) and 17(a)(3) of the Securities Act; and
+from causing any violations and any future violations of Sections 13(a), 13(b)(2)(A), and
+13(b)(2)(B) of the Exchange Act and Rules 12b-20 and 13a-1 thereunder.
+D. Respondent Mead is censured pursuant to  Rule 102(e) of the Commission’s Rules
+of Practice.
+E. It is also Ordered, pursuant to Rule 102(e) of the Commission’s Rules of Practice
+that Respondent Mead is denied the privilege of appearing or practicing before the Commission
+as an accountant.
+F. Respondent Barnsdall is censured pursua nt to Rule 102(e) of the Commission’s
+Rules of Practice.
+G. It is also Ordered, pursuant to Rule 102(e) of the Commission’s Rules of Practice
+that Respondent Barnsdall is denied the privilege of appearing or practicing before the
+Commission as an accountant.
+H. After two years from the date of this order, Respondent Barnsdall may request
+that the Commission consider his reinstatement by submitting an application (attention:
+Office of the Chief Accountant) to resume appearing or practicing before the Commission as:
+  1. a preparer or reviewer, or a pe rson responsible for the preparation or
+review, of any public company’s financial statements that are filed with the Commission.  Such
+an application must satisfy the Commission that Respondent Barnsdall’s work in his practice
+before the Commission will be reviewed either by the independent audit committee of the public
+company for which he works or in some other acceptable manner, as long as he practices before
+the Commission in this capacity; and/or
+  2. an independent accountant.  Su ch an application must satisfy the
+Commission that:
+   (a) Respondent Barnsdall, or th e public accounting firm with which he
+is associated, is registered with the Public Company Accounting Oversight Board (“Board”) in
+accordance with the Sarbanes-Oxley Act of 2002, and such registration continues to be effective;
+   (b) Respondent Barnsdall, or th e registered public accounting firm
+with which he is associated, has been inspected by the Board and that inspection did not identify
+ - 18 -
+any criticisms of or potential defects in Respondent’s or the firm’s quality control system that
+would indicate that the Respondent will not receive appropriate supervision or, if the Board has
+not conducted an inspection, has received an unqualified report relating to his, or the firm’s, most
+recent peer review conducted in accordance with the guidelines adopted by the former SEC
+Practice Section of the American Institute of Certified Public Accountants Division for CPA
+Firms or an organization providing equivalent oversight and quality control functions;
+   (c) Respondent Barnsdall has resolv ed all disciplinary issues with the
+Board, and has complied with all terms and conditions of any sanctions imposed by the Board
+(other than reinstatement by the Commission); and
+   (d) Respondent Barnsdall acknowledge s his responsibility, as long as
+Respondent appears or practices before the Commission as an independent accountant, to
+comply with all requirements of the Commission and the Board, including, but not limited to, all
+requirements relating to registration, inspections, concurring partner reviews and quality control
+standards.
+I. The Commission will consider an application by Barnsdall to resume appearing or
+practicing before the Commission provided that his practicing certificate is current and he has
+resolved all other disciplinary issues with the applicable United Kingdom Institute of Chartered
+Accountants.  However, if licensure is dependent on reinstatement by the Commission, the
+Commission will consider an application on its other merits.  The Commission’s review may
+include consideration of, in addition to the matters referenced above, any other matters related to
+Barnsdall’s character, integrity, professional conduct, or qualifications to appear of practice
+before the Commission.
+By the Commission.
+       N a n c y  M .  M o r r i s
+       S e c r e t a r y
+ - 19 -

raw/aaer/2006/AAER-2410.txt ADDED Viewed

	@@ -0,0 +1,1417 @@

+     SEC.gov | PKF and Anthony Frederick John Mead
+         !function(){var e=navigator.userAgent,a=document.documentElement,n=a.className;n=n.replace("no-js","js"),/iPad|iPhone|iPod/.test(e)&&!window.MSStream&&(n+=" ua-ios"),a.className=n}();
+     {"path":{"baseUrl":"\/","pathPrefix":"","currentPath":"node\/498821","currentPathIsAdmin":false,"isFront":false,"currentLanguage":"en"},"pluralDelimiter":"\u0003","suppressDeprecationErrors":true,"gtag":{"tagId":"","consentMode":false,"otherIds":[],"events":[],"additionalConfigInfo":[]},"ajaxPageState":{"libraries":"eJxdT0GOwzAI_JBdn_oei2DkeINNZLC22devlaZS2wtiBhhmcKNUTPo97jxyaXEH3GJpiZrFhQW38A4cMqgeYQGlV19JFTKpQ-kUmvQKXP7I0cO4tC2kPnbg2wVdFslM0SCHPMs3vsEPPD7J6hgOGdPCKJyoRxxqUuePHjLLAuzVjimenRJGSLW08NoBK9LUn6SHlrytVOlcpJShB63QLSpBx_WkOzHNePol4fRQo_qMPvQ36ZXsAmd99lMNr2t_GUR9n60EyX9a_wePd5ns","theme":"uswds_sec","theme_token":null},"ajaxTrustedUrl":[],"gtm":{"tagId":null,"settings":{"data_layer":"dataLayer","include_classes":false,"allowlist_classes":"","blocklist_classes":"","include_environment":false,"environment_id":"","environment_token":""},"tagIds":["GTM-TD3BKV"]},"data":{"extlink":{"extTarget":false,"extTargetAppendNewWindowDisplay":true,"extTargetAppendNewWindowLabel":"(opens in a new window)","extTargetNoOverride":false,"extNofollow":false,"extTitleNoOverride":false,"extNoreferrer":false,"extFollowNoOverride":false,"extClass":"0","extLabel":"(link is external)","extImgClass":false,"extSubdomains":true,"extExclude":".*\\.gov|http:\/\/www.xbrl.org\/utr\/2013-05-17\/utr.xml|http:\/\/www.xbrl.org\/dtr\/type\/numeric-2009-12-16.xsd|http:\/\/www.xbrl.org\/dtr\/type\/nonNumeric-2009-12-16.xsd|https:\/\/secir.secure.force.com\/ombudsman\/OMMSForm","extInclude":"","extCssExclude":".data-exempt","extCssInclude":"","extCssExplicit":"","extAlert":true,"extAlertText":"You are now leaving the SEC Website. The link you have selected is located on another server. Please click on the OK button below to proceed to the selected site. The SEC does not endorse this web site, its sponsor, or any of the policies, activities, products, or services offered on the site or by any advertiser on the site.","extHideIcons":false,"mailtoClass":"0","telClass":"","mailtoLabel":"(link sends email)","telLabel":"(link is a phone number)","extUseFontAwesome":false,"extIconPlacement":"append","extPreventOrphan":false,"extFaLinkClasses":"fa fa-external-link","extFaMailtoClasses":"fa fa-envelope-o","extAdditionalLinkClasses":"","extAdditionalMailtoClasses":"","extAdditionalTelClasses":"","extFaTelClasses":"fa fa-phone","allowedDomains":null,"extExcludeNoreferrer":""}},"field_group":{"html_element":{"mode":"default","context":"view","settings":{"classes":"rightrail-list","show_empty_fields":false,"id":"","element":"div","show_label":true,"label_element":"h2","label_element_classes":"","attributes":"","effect":"none","speed":"fast"}}},"user":{"uid":0,"permissionsHash":"e506dfd1572f94bd1f339f1a7483bfbded31d4a9d2bdfdca3fdbc235153380ee"}}
+      Skip to search field
+      Skip to main content
+           An official website of the United States government
+           Here’s how you know
+           Here’s how you know
+                Official websites use .gov
+                              A  .gov  website belongs to an official government organization in the United States.
+                Secure .gov websites use HTTPS
+              A  lock
+              (   Lock  A locked padlock    )
+              or  https://  means you’ve safely connected to the .gov website. Share sensitive information only on official, secure websites.
+                     SEC homepage
+        Menu
+          Close
+     Search SEC.gov &amp; EDGAR
+       Search
+             Search Filings
+           Search Filings
+                             Full Text Search
+                             Latest Filings
+                             Mutual Fund Search
+                             Variable Insurance Products Search
+                             SIC Codes
+                             CIK Lookup
+                             Public Dissemination Service (PDS)
+                             Search Assistance
+             Submit Filings
+           Submit Filings
+                             EDGAR Filer Management Portal
+                             EDGAR Filing Portal
+                             Online Forms Management Portal
+                             EDGAR Next
+                             Forms Index
+                             Filer Support &amp; Resources
+             Data &amp; Research
+           Data &amp; Research
+                             Data Library
+                             Statistics &amp; Data Visualizations
+                             Structured Data
+                             Investment Management Data
+                             Open Data at the SEC
+             Rules, Enforcement, &amp; Compliance
+           Rules &amp; Regulations
+                             Rulemaking Activity
+                             Submit Public Comments
+                             Staff Guidance
+                             No-Action, Interpretive, and Exemptive Letters
+                             Self-Regulatory Organization Rulemaking
+                             Public Petitions for Rulemaking
+           Enforcement &amp; Litigation
+                             Litigation Releases
+                             Administrative Proceedings
+                             Administrative Law Judge Orders and Initial Decisions
+                             Trading Suspensions
+                             Distributions to Harmed Investors
+                             Receiverships
+           Compliance
+                             Examination Priorities
+                             Risk Alerts
+                             Compliance Outreach Program
+                             Proposed Rules
+                             What&#039;s New
+                             Whistleblower Program
+             Featured Topics
+           Featured Topics
+                             Crypto Task Force
+                             Cybersecurity
+                             Market Structure Analytics
+                             Saving and Investing for Military Personnel
+                             Saving and Investing for Teachers
+                             SEC-CFTC Harmonization Initiative
+                             Treasury Clearing Implementation
+             About
+           About
+                             Mission
+                             Commissioners
+                             Divisions &amp; Offices
+                             Division &amp; Office Directors
+                             Advisory Committees
+                             Budget &amp; Performance
+                             Reports &amp; Publications
+                             Commission Votes
+                             Contact the SEC
+                             Careers
+                             Submit a Tip or Complaint
+                           Newsroom
+                           |
+                           Investors
+                           Small Businesses
+                           Whistleblowers
+                           Newsroom
+                           |
+                           Investors
+                           Small Businesses
+                           Whistleblowers
+     Search SEC.gov &amp; EDGAR
+       Search
+        More in this Section
+                 Enforcement &amp; Litigation
+           Litigation Releases
+           Administrative Proceedings
+           Administrative Law Judge Orders and Initial Decisions
+           Trading Suspensions
+           Distributions to Harmed Investors
+           Receiverships
+           Electronic Filings in Administrative Proceedings (eFAP)
+           Rules of Practice
+           Applications for Reentry
+           Reports of Investigations
+           Whistleblower Program
+           Public Alert: Unregistered Soliciting Entities (PAUSE)
+           SEC Action Lookup - Individuals (SALI)
+           Enforcement Data Delivery Standards
+           Small Businesses
+           Appellate Briefs
+           Amicus / Friend of the Court Briefs
+                 Enforcement &amp; Litigation
+           Litigation Releases
+           Administrative Proceedings
+           Administrative Law Judge Orders and Initial Decisions
+           Trading Suspensions
+           Distributions to Harmed Investors
+           Receiverships
+           Electronic Filings in Administrative Proceedings (eFAP)
+           Rules of Practice
+           Applications for Reentry
+           Reports of Investigations
+           Whistleblower Program
+           Public Alert: Unregistered Soliciting Entities (PAUSE)
+           SEC Action Lookup - Individuals (SALI)
+           Enforcement Data Delivery Standards
+           Small Businesses
+           Appellate Briefs
+           Amicus / Friend of the Court Briefs
+               Home
+               Enforcement and Litigation
+               Litigation Releases
+              PKF and Anthony Frederick John Mead
+        PKF and Anthony Frederick John Mead
+                   U.S. SECURITIES AND EXCHANGE COMMISSION
+ Litigation Release No. 19652 / April 12, 2006
+ Accounting and Auditing Enforcement Release No. 2410 / April 12, 2006
+ SEC Sues UK Accounting Firm PKF and Former Partner Anthony Mead in Connection with the AremisSoft Corporation Audit
+ PKF to Pay $2 Million Penalty and Disgorge Audit Fees
+ Mead Barred from SEC Practice, Fined $50,000
+ Second Partner Stuart Barnsdall Censured and Barred Two Years
+  SEC v. PKF and Anthony Frederick John Mead , Civil Action No. 06 CV 2853 (S.D.N.Y)
+ In the Matter of PKF, Anthony Frederick John Mead, FCA, and Stuart John Barnsdall, ACA, Exchange Act Release No. 34-53633 / April 12, 2006
+ Accounting and Auditing Enforcement Release No. 2409 / April 12, 2006
+ The Securities and Exchange Commission today announced that it filed a civil action in the United States District Court for the Southern District of New York and a related administrative proceeding against PKF, a United Kingdom based accounting firm, and its former partner Anthony Frederick John Mead ("Mead"), as a result of the failed year 2000 audit of AremisSoft Corporation.  AremisSoft, a public company traded on the Nasdaq market, went bankrupt in March 2002 after announcing it was unable to substantiate approximately $90 million of revenues it reported in 2000.  Subject to Court approval and without admitting or denying the allegations in the Complaint, PKF consents to disgorge $309,048 in fees plus interest and to pay a $2 million penalty which may be distributed to harmed investors pursuant to the Sarbanes-Oxley Act of 2002.  Mead consents to a $50,000 penalty.  In 2005, PKF converted to PKF (UK) LLP, a limited liability partnership.
+ The Complaint charges that PKF became aware of information during the 2000 AremisSoft audit indicating that illegal acts had or may have occurred but did not bring that information to the attention of AremisSoft's management, board of directors, or audit committee and that Mead failed to design appropriate audit procedures to determine whether AremisSoft senior management had committed fraud, violations of Section 10A of the Securities Exchange Act of 1934 ("Exchange Act").
+ The Commission also instituted and simultaneously settled combined administrative and Rule 102(e) proceedings against PKF, Mead, and Stuart John Barnsdall ("Barnsdall"), concurring partner on the 2000 AremisSoft audit.  PKF, Mead, and Barnsdall settled without admitting or denying the findings in the Commission's order.  The Commission found PKF and Mead engaged in highly unreasonable conduct in connection with the audit of AremisSoft's 2000 financial statements that resulted in repeated violations of applicable professional standards in circumstances which each knew or should have known warranted heightened scrutiny.  It found Barnsdall engaged in unreasonable conduct that resulted in violations of applicable professional standards.  According to the Commission's order:
+   PKF issued an audit report, signed by Mead, containing an unqualified opinion stating that PKF had conducted its audit of AremisSoft's 2000 financial statements in accordance with generally accepted auditing standards ("GAAS"), and that those financial statements were consistent with generally accepted accounting principles ("GAAP"), when each knew or should have known that the financial statements did not comply with GAAP and that the audit had not been conducted in accordance with GAAS.  In its 2000 Form 10-K AremisSoft reported $97.5 million of its $123.6 million total revenue came from two Cyprus-based subsidiaries when, in fact, the subsidiaries together had just $1.7 million in revenue for the year.  AremisSoft also claimed $33.3 million in cash at December 31, 2000, but in fact, $9.98 million was in the bank account of one its co-CEOs and $10.7 million was not received by AremisSoft until mid-January 2001;
+    During the 2000 audit, a PKF staff accountant alerted Mead to shortcomings of the audits being performed on AremisSoft's two Cyprus based subsidiaries, particularly the lack of documented testing.  When the PKF accountant advised the PKF Cyprus partner, Pavlos Meletiou, about his concerns, especially the limited audit testing, Meletiou suggested that the testing be carried out after the audit;
+    In his review of the audit workpapers for one of the AremisSoft Cyprus-based subsidiaries, Mead found numerous problems, including serious deficiencies in two significant audit areas:  cash and accounts receivable.  According to his notes, the workpapers included copies, not originals, of cash confirmations, and both cash and accounts receivable confirmations were apparently not received directly by PKF Cyprus.  Moreover, inventory confirmations were provided by AremisSoft management rather than third parties.  A second PKF partner found multiple problems in the audit file related to the other AremisSoft Cyprus based subsidiary including similar problems with cash and accounts receivable;
+    The accounts receivable confirmations in the PKF Cyprus audit workpapers reviewed by PKF and Mead evidence additional irregularities that should have warranted heightened scrutiny.  None are originals; many have identical or similar handwriting; and, according to the dates printed on the top of each, eight of seventeen were returned on the same two dates.  The accounts receivable confirmations also were addressed to customers of AremisSoft rather than to account managers, despite the company's claim that account managers, not its end users, were indebted to AremisSoft;
+    PKF and Mead relied on AremisSoft's system of internal controls to limit substantive testing of revenue reported by AremisSoft's two Cyprus-based subsidiaries, but neither obtained sufficient understanding of the internal controls for those subsidiaries; and
+    Barnsdall conducted his concurring partner review the day after Mead signed and transmitted PKF's audit report for inclusion in AremisSoft's year 2000 Form 10-K but backdated his sign-off to the date of the audit report.
+  The order finds that through these actions, PKF willfully violated Section 10A of the Exchange Act and was a cause of AremisSoft's violations of Sections 17(a)(2) and 17(a)(3) of the Securities Act of 1933 ("Securities Act") and Sections 13(a) and 13(b)(2)(A) and (B) of the Exchange Act, and Rules 12b-20, 13a-1, and 13b2-1 thereunder; and that Mead willfully violated Section 10A(a) of the Exchange Act and was a cause of AremisSoft's violations of Sections 17(a)(2) and 17(a)(3) of the Securities Act and Sections 13(a) and 13(b)(2)(A) and (B) of the Exchange Act, and Rules 12b-20, 13a-1, and 13b2-1 thereunder.  PKF and Mead each consented to the order that they cease and desist from committing and/or causing the violations charged as well as any future violations of these provisions.
+ As part of the settlement, PKF agreed to disgorge $309,048 in audit fees plus pre-judgment interest and consented to a censure and an undertaking not to accept any audit engagements for new Commission registrant clients for one year.  Mead consented to a censure and permanent bar from appearing or practicing before the Commission as an accountant pursuant to Rule 102(e) of the Commission's Rules of Practice.  Barnsdall consented to a censure and two year bar from appearing or practicing before the Commission as an accountant pursuant to Rule 102(e).
+ The Commission acknowledges the assistance provided in this matter by the United Kingdom Financial Services Authority.
+ SEC Complaint in this matter  -->
+&nbsp;
+   Resources
+      Complaint in this matter
+           Return to top
+                 SEC homepage
+                                                     About the SEC
+           Budget &amp; Performance
+           Careers
+           Commission Votes
+           Contact
+           Contracts
+                                                     Transparency
+           Accessibility &amp; Disability
+           Super Intelligence
+           FOIA
+           Inspector General
+           No FEAR Act Data
+           Ombuds
+           SEC Excess Personal Property Guidance
+                                                     Websites
+           Investor.gov
+           Related Sites
+           USA.gov
+                                                     Site Information
+           Plain Writing
+           Privacy &amp; Security
+           Site Map
+               Stay connected. Sign up for email updates.
+   Your email address
+   Sign Up
+                 X
+                 Facebook
+               Instagram
+                 RSS
+                 YouTube
+               Email Updates

raw/aaer/2006/AAER-2417.txt ADDED Viewed

	@@ -0,0 +1,165 @@

+ UNITED STATES OF AMERICA
+ Before the
+ SECURITIES AND EXCHANGE COMMISSION
+SECURITIES EXCHANGE ACT OF 1934
+Release No.  53716 / April 25, 2006
+ACCOUNTING AND AUDITING ENFORCEMENT
+Release No.  2417 / April 25, 2006
+ADMINISTRATIVE PROCEEDING
+File No.  3-12272
+In the Matter of
+JAMES JARRETT,
+Respondent.
+ORDER INSTITUTING CEASE-AND-DESIST
+PROCEEDINGS, MAKING FINDINGS, AND
+IMPOSING A CEASE-AND-DESIST ORDER
+PURSUANT TO SECTION 21C OF THE
+SECURITIES EXCHANGE ACT OF 1934
+I.
+ The Securities and Exchange Commission (“Commission”) deems it appropriate that cease-
+and-desist proceedings be, and hereby are, instituted pursuant to Section 21C of the Securities
+Exchange Act of 1934 (“Exchange Act”), against James Jarrett (“Jarrett” or “Respondent”).
+II.
+ In anticipation of the institution of these proceedings, Respondent has submitted an Offer
+of Settlement (the “Offer”) which the Commission has determined to accept.  Solely for the
+purpose of these proceedings and any other proceedings brought by or on behalf of the
+Commission, or to which the Commission is a party, and without admitting or denying the findings
+herein, except as to the Commission’s jurisdiction over him and the subject matter of these
+proceedings, which are admitted, Respondent consents to the entry of this Order Instituting Cease-
+and-Desist Proceedings, Making Findings, and Imposing a Cease-and-Desist Order Pursuant to
+Section 21C of the Securities Exchange Act of 1934 (“Order”), as set forth below.
+ 2
+III.
+ On the basis of this Order and Res pondent’s Offer, the Commission finds1 that:
+A.  Facts
+Hayes Lemmerz International, Inc. (“Hayes”) is a Delaware corporation that is
+headquartered in Northville, Michigan and has operations throughout the United States, South
+America, and Europe.  The company is a major global supplier of automotive and commercial
+highway components (including wheels, brakes, powertrains, suspensions, and structural and other
+lightweight components).  During the relevant time period, Hayes was a publicly-held company
+with securities registered with the Commission pursuant to Section 12(b) of the Exchange Act.
+Hayes’ shares traded on the New York Stock Exchange until it was de-listed after the disclosure of
+the fraudulent accounting scheme described below.  Hayes’ common stock is now listed on the
+NASDAQ National Market.
+James Jarrett, age 60, is a resident of Indiana.  From May 2000 through October 2001, he
+was the Business Unit Controller for Hayes’ North American Aluminum Wheel Group (“AWG”),
+which was a part of Hayes’ North American Wheel Group (“NAWG”).  Jarrett’s responsibilities as
+the Business Unit Controller involved ensuring that AWG’s books and records complied with
+Generally Accepted Accounting Principles (“GAAP”) and Hayes’ internal accounting policies.
+ From at least 1999 through the first quarter of 2001, Hayes, acting through senior officers
+and employees, engaged in a fraudulent scheme to achieve corporate earnings targets and mask
+declining operating results.  Specifically, the fraudulent accounting scheme was carried out at
+certain Hayes plants and business units through three primary mechanisms:  (1) inappropriately
+deferring operating expenses to balance sheet accounts, (2) failing to process vendor invoices, and
+(3) recording certain expenses as assets by improperly classifying expenses as gain contingencies
+or inaccurately recording customer credits as receivables.  Hayes employees, including senior
+officers and accounting personnel, directed, ratified and/or knew of the above-listed practices.  As
+a result of Hayes’ fraudulent scheme, Hayes made materially false filings with the Commission in
+fiscal years 1999 and 2000 and for the first quarter of 2001.  In December 2001, Hayes restated its
+results for fiscal years 1999, 2000 and for the first quarter of 2001.  On December 5, 2001, Hayes
+filed for Chapter 11 bankruptcy due, in part, to revelations about its improper accounting practices.
+Hayes emerged from bankruptcy in June 2003.
+As the AWG Business Unit Controller, Jarrett knew of and participated in at least some of
+the improper accounting practices described above because he either authorized the action and/or
+ratified the improper records that resulted from the practices.  As the AWG Business Unit
+Controller, Jarrett was responsible for reconciling various income statements and balance sheet
+accounts and knew that these entries were false and that they misstated Hayes’ financial
+statements.  Specifically, Jarrett knew that in late 2000, approximately $2.9 million of operating
+1 The findings herein are made pursuant to Respondent's Offer of Settlement and are not binding
+on any other person or entity in this or any other proceeding.
+ 3
+expenses (such as utility costs, freight, and machine repairs) were improperly deferred to AWG
+plant balance sheet accounts.  Also, throughout 2000 and 2001, Jarrett failed to adequately accrue
+customer discounts on AWG financial statements, causing AWG’s reported net sales to be
+overstated.  Jarrett knew that failing to adequately accrue these discounts resulted in false entries
+on AWG’s balance sheet.  In February 2001, Jarrett knew that approximately $3 million of
+operating expenses were inappropriately deferred to an AWG plant balance sheet.  Finally, in
+2001, Jarrett was present during a meeting in which a Hayes’ executive directed an AWG plant
+controller, for whom Jarrett had oversight as the AWG Business Unit Controller, to stop recording
+supply invoices in months where the plant was not going to meet its internal earnings forecasts.
+The controller complied and a significant amount of unrecorded supply invoices accumulated at
+that plant.  Jarrett knew that this directive would cause expenses not to be recorded and the plant’s
+expenses to be understated.
+B.  Legal Analysis
+As a result of the conduct described above, Jarrett violated Section 13(b)(5) of the
+Exchange Act and Rule 13b2-1 thereunder, and caused violations of Sections 13(a), 13(b)(2)(A),
+and 13(b)(2)(B) of the Exchange Act and Rules 13a-1 and 13a-13 thereunder.
+1. Record-Keeping Provisions:  Section 13(b)(2)A) of the Exchange Act and Rule 13b2-1
+T h e r e u n d e r
+ Section 13(b)(2)(A) of the Ex change Act requires issuers with securities registered
+pursuant to Section 12 of the Exchange Act to make and keep books, records, and accounts that
+accurately and fairly reflect the transactions and dispositions of their assets.  Rule 13b2-1 prohibits
+the falsification of any book, record, or account subject to Section 13(b)(2)(A) of the Exchange
+Act.
+   As AWG Business Unit Cont roller, Jarrett was responsible for reconciling various income
+statements and balance sheet accounts and authorized and/or ratified entries in Hayes’ books and
+records that he knew inaccurately reflected transactions and dispositions of the company’s assets.
+Jarrett therefore caused Hayes’ violation of Section 13(b)(2)(A) of the Exchange Act and violated
+Rule 13b2-1 under the Exchange Act.
+2.  Internal Controls Provisions: Sections 13(b)(2)(B) and 13(b)(5) of the Exchange Act
+ Section 13(b)(2)(B) of the Exchan ge Act requires issuers with securities registered pursuant
+to Section 12 of the Exchange Act to devise and maintain a system of internal accounting controls
+sufficient to reasonably assure, among other things, that transactions are recorded as necessary to
+permit preparation of financial statements in conformity with GAAP.  Section 13(b)(5) of the
+Exchange Act prohibits any person from knowingly circumventing or knowingly failing to
+implement a system of internal accounting controls or knowingly falsifying any book, record, or
+account required to be made and kept pursuant to Section 13(b)(2) of the Exchange Act.
+ As AWG Business Unit Controller, Jarrett knew that the inappropriate accounting entries
+he and others made at the AWG plants would be included in Hayes’ books, records, and financial
+results.  Jarrett therefore caused Hayes’ books and records to contain inaccurate and incomplete
+ 4
+descriptions of the accounting entries, which prevented Hayes from preparing financial statements
+in conformity with GAAP.  By engaging in such conduct, Jarrett violated Section 13(b)(5) of the
+Exchange Act and caused Hayes’ violation Section 13(b)(2)(B) of the Exchange Act.
+3.   Reporting Provisions: Section 13(a) of the Exchange Act and Rules 13a-1 and 13a-13
+T h e r e u n d e r
+ Section 13(a) of the Exchange Act and Rules 13a-1 and 13a-13 thereunder require that
+issuers with securities registered under Section 12 of the Exchange Act file annual and quarterly
+reports with the Commission and keep this information current.  By engaging in the above-
+described conduct, Jarrett caused Hayes to file inaccurate quarterly and annual reports with the
+Commission.  Accordingly, Jarrett caused Hayes’ violation of Section 13(a) of the Exchange Act
+and Rules 13a-1 and 13a-13 thereunder.
+IV.
+ In view of the foregoing, the Commission deems it appropriate to impose the sanctions
+agreed to in Respondent Jarrett’s Offer.
+ Accordingly, it is hereby ORDERED that Respondent James Jarrett cease and desist from
+(1) committing or causing any violations and any future violations of Section 13(b)(5) of the
+Exchange Act and Rule 13b2-1 thereunder, and (2) causing any violations and any future violations
+of Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act and Rules 13a-1 and 13a-13
+thereunder.
+ By the Commission.
+       N a n c y  M .  M o r r i s
+       S e c r e t a r y

raw/aaer/2006/AAER-2453.pdf ADDED Viewed

Binary file (57.6 kB). View file

raw/aaer/2006/AAER-2455.pdf ADDED Viewed

Binary file (46.3 kB). View file

raw/aaer/2006/AAER-2463.pdf ADDED Viewed

Binary file (44.4 kB). View file

raw/aaer/2006/AAER-2474.pdf ADDED Viewed

Binary file (39.9 kB). View file

raw/aaer/2006/AAER-2491.pdf ADDED Viewed

Binary file (49.7 kB). View file

raw/aaer/2006/AAER-2494.txt ADDED Viewed

	@@ -0,0 +1,1378 @@

+     SEC.gov | Gregory A. Brady, et al.
+         !function(){var e=navigator.userAgent,a=document.documentElement,n=a.className;n=n.replace("no-js","js"),/iPad|iPhone|iPod/.test(e)&&!window.MSStream&&(n+=" ua-ios"),a.className=n}();
+     {"path":{"baseUrl":"\/","pathPrefix":"","currentPath":"node\/499921","currentPathIsAdmin":false,"isFront":false,"currentLanguage":"en"},"pluralDelimiter":"\u0003","suppressDeprecationErrors":true,"gtag":{"tagId":"","consentMode":false,"otherIds":[],"events":[],"additionalConfigInfo":[]},"ajaxPageState":{"libraries":"eJxdT0GOwzAI_JBdn_oei2DkeINNZLC22devlaZS2wtiBhhmcKNUTPo97jxyaXEH3GJpiZrFhQW38A4cMqgeYQGlV19JFTKpQ-kUmvQKXP7I0cO4tC2kPnbg2wVdFslM0SCHPMs3vsEPPD7J6hgOGdPCKJyoRxxqUuePHjLLAuzVjimenRJGSLW08NoBK9LUn6SHlrytVOlcpJShB63QLSpBx_WkOzHNePol4fRQo_qMPvQ36ZXsAmd99lMNr2t_GUR9n60EyX9a_wePd5ns","theme":"uswds_sec","theme_token":null},"ajaxTrustedUrl":[],"gtm":{"tagId":null,"settings":{"data_layer":"dataLayer","include_classes":false,"allowlist_classes":"","blocklist_classes":"","include_environment":false,"environment_id":"","environment_token":""},"tagIds":["GTM-TD3BKV"]},"data":{"extlink":{"extTarget":false,"extTargetAppendNewWindowDisplay":true,"extTargetAppendNewWindowLabel":"(opens in a new window)","extTargetNoOverride":false,"extNofollow":false,"extTitleNoOverride":false,"extNoreferrer":false,"extFollowNoOverride":false,"extClass":"0","extLabel":"(link is external)","extImgClass":false,"extSubdomains":true,"extExclude":".*\\.gov|http:\/\/www.xbrl.org\/utr\/2013-05-17\/utr.xml|http:\/\/www.xbrl.org\/dtr\/type\/numeric-2009-12-16.xsd|http:\/\/www.xbrl.org\/dtr\/type\/nonNumeric-2009-12-16.xsd|https:\/\/secir.secure.force.com\/ombudsman\/OMMSForm","extInclude":"","extCssExclude":".data-exempt","extCssInclude":"","extCssExplicit":"","extAlert":true,"extAlertText":"You are now leaving the SEC Website. The link you have selected is located on another server. Please click on the OK button below to proceed to the selected site. The SEC does not endorse this web site, its sponsor, or any of the policies, activities, products, or services offered on the site or by any advertiser on the site.","extHideIcons":false,"mailtoClass":"0","telClass":"","mailtoLabel":"(link sends email)","telLabel":"(link is a phone number)","extUseFontAwesome":false,"extIconPlacement":"append","extPreventOrphan":false,"extFaLinkClasses":"fa fa-external-link","extFaMailtoClasses":"fa fa-envelope-o","extAdditionalLinkClasses":"","extAdditionalMailtoClasses":"","extAdditionalTelClasses":"","extFaTelClasses":"fa fa-phone","allowedDomains":null,"extExcludeNoreferrer":""}},"user":{"uid":0,"permissionsHash":"e506dfd1572f94bd1f339f1a7483bfbded31d4a9d2bdfdca3fdbc235153380ee"}}
+      Skip to search field
+      Skip to main content
+           An official website of the United States government
+           Here’s how you know
+           Here’s how you know
+                Official websites use .gov
+                              A  .gov  website belongs to an official government organization in the United States.
+                Secure .gov websites use HTTPS
+              A  lock
+              (   Lock  A locked padlock    )
+              or  https://  means you’ve safely connected to the .gov website. Share sensitive information only on official, secure websites.
+                     SEC homepage
+        Menu
+          Close
+     Search SEC.gov &amp; EDGAR
+       Search
+             Search Filings
+           Search Filings
+                             Full Text Search
+                             Latest Filings
+                             Mutual Fund Search
+                             Variable Insurance Products Search
+                             SIC Codes
+                             CIK Lookup
+                             Public Dissemination Service (PDS)
+                             Search Assistance
+             Submit Filings
+           Submit Filings
+                             EDGAR Filer Management Portal
+                             EDGAR Filing Portal
+                             Online Forms Management Portal
+                             EDGAR Next
+                             Forms Index
+                             Filer Support &amp; Resources
+             Data &amp; Research
+           Data &amp; Research
+                             Data Library
+                             Statistics &amp; Data Visualizations
+                             Structured Data
+                             Investment Management Data
+                             Open Data at the SEC
+             Rules, Enforcement, &amp; Compliance
+           Rules &amp; Regulations
+                             Rulemaking Activity
+                             Submit Public Comments
+                             Staff Guidance
+                             No-Action, Interpretive, and Exemptive Letters
+                             Self-Regulatory Organization Rulemaking
+                             Public Petitions for Rulemaking
+           Enforcement &amp; Litigation
+                             Litigation Releases
+                             Administrative Proceedings
+                             Administrative Law Judge Orders and Initial Decisions
+                             Trading Suspensions
+                             Distributions to Harmed Investors
+                             Receiverships
+           Compliance
+                             Examination Priorities
+                             Risk Alerts
+                             Compliance Outreach Program
+                             Proposed Rules
+                             What&#039;s New
+                             Whistleblower Program
+             Featured Topics
+           Featured Topics
+                             Crypto Task Force
+                             Cybersecurity
+                             Market Structure Analytics
+                             Saving and Investing for Military Personnel
+                             Saving and Investing for Teachers
+                             SEC-CFTC Harmonization Initiative
+                             Treasury Clearing Implementation
+             About
+           About
+                             Mission
+                             Commissioners
+                             Divisions &amp; Offices
+                             Division &amp; Office Directors
+                             Advisory Committees
+                             Budget &amp; Performance
+                             Reports &amp; Publications
+                             Commission Votes
+                             Contact the SEC
+                             Careers
+                             Submit a Tip or Complaint
+                           Newsroom
+                           |
+                           Investors
+                           Small Businesses
+                           Whistleblowers
+                           Newsroom
+                           |
+                           Investors
+                           Small Businesses
+                           Whistleblowers
+     Search SEC.gov &amp; EDGAR
+       Search
+        More in this Section
+                 Enforcement &amp; Litigation
+           Litigation Releases
+           Administrative Proceedings
+           Administrative Law Judge Orders and Initial Decisions
+           Trading Suspensions
+           Distributions to Harmed Investors
+           Receiverships
+           Electronic Filings in Administrative Proceedings (eFAP)
+           Rules of Practice
+           Applications for Reentry
+           Reports of Investigations
+           Whistleblower Program
+           Public Alert: Unregistered Soliciting Entities (PAUSE)
+           SEC Action Lookup - Individuals (SALI)
+           Enforcement Data Delivery Standards
+           Small Businesses
+           Appellate Briefs
+           Amicus / Friend of the Court Briefs
+                 Enforcement &amp; Litigation
+           Litigation Releases
+           Administrative Proceedings
+           Administrative Law Judge Orders and Initial Decisions
+           Trading Suspensions
+           Distributions to Harmed Investors
+           Receiverships
+           Electronic Filings in Administrative Proceedings (eFAP)
+           Rules of Practice
+           Applications for Reentry
+           Reports of Investigations
+           Whistleblower Program
+           Public Alert: Unregistered Soliciting Entities (PAUSE)
+           SEC Action Lookup - Individuals (SALI)
+           Enforcement Data Delivery Standards
+           Small Businesses
+           Appellate Briefs
+           Amicus / Friend of the Court Briefs
+               Home
+               Enforcement and Litigation
+               Litigation Releases
+              Gregory A. Brady, et al.
+        Gregory A. Brady, et al.
+                   U.S. SECURITIES AND EXCHANGE COMMISSION
+ Litigation Release No. 19871 / October 16, 2006
+ Accounting and Auditing Enforcement Release No.  2494 / October 16, 2006
+  SEC v. Gregory A. Brady, et al. , Civil Action No. 3:05-CV-1416-D, United States District Court for the Northern District of Texas, Dallas Division
+ SEC Settles Charges Against Former i2 Technologies CFO William M. Beecher
+ On October 12, 2006, the Commission settled civil charges against William M. Beecher, the former chief financial officer of Dallas-based i2 Technologies, Inc. and a defendant in the Commission's July 2005 enforcement action against three former i2 officers arising from an alleged scheme to overstate i2's revenues. Without admitting or denying the Commission's allegations, Beecher has consented to the entry of a final judgment enjoining him from violating or aiding and abetting violations of the antifraud, record-keeping, reporting, internal-controls and false-statements-to-auditors provisions of the federal securities laws. Beecher also has consented to an order barring him from serving as a public company officer or director for a period of five years, and to pay a civil penalty and disgorgement, with prejudgment interest. The settlement is subject to approval by United States District Judge Sidney A. Fitzwater.
+ The Commission's Complaint alleges that, over the four years ended December 31, 2001 and the first three quarters of 2002, i2 misstated approximately $1 billion of software license revenue, including over $125 million of revenue it never should have recognized. The Complaint further alleges that Beecher participated and assisted others in a fraudulent revenue-recognition scheme by, among other things, signing i2's public filings containing the misstated financial statements and approving earnings releases and participating in public conference calls at which materially false and misleading financial information was provided. The Commission's complaint also alleges that Beecher profited by trading i2 securities on the basis of material nonpublic information.
+ The proposed Judgment to which Beecher has consented, without admitting or denying the Commission's allegations, enjoins him from violating or aiding and abetting violations of Section 17(a) of the Securities Act of 1933 and Sections 10(b), 13(a), 13(b)(2)(A), 13(b)(2)(B) and 13(b)(5) of the Securities Exchange Act of 1934 and Rules 10b-5, 12b-20, 13a-1, 13a-13, 13a-14, 13b2-1 and 13b2-2 thereunder. The proposed Judgment also prohibits Beecher from serving as an officer or director of a public company for five years, and orders him to pay disgorgement and prejudgment interest of $1,929,336 and a third-tier civil penalty of $250,000. The Commission intends ultimately to move the Court to establish a Fair Fund under Section 308 of the Sarbanes-Oxley Act of 2001, to hold the civil penalty, disgorgement and accrued interest, for ultimate distribution to injured i2 investors.
+ For further information about the Commission's action against the former i2 executives, see Litigation Releases Nos.  19306  (July 18, 2005) and  19624  (March 28, 2006), and Accounting and Auditing Enforcement Releases Nos.  2279  (July 18, 2005) and  2400  (March 28, 2006).
+ SEC Complaint in this matter
+-->
+&nbsp;
+           Return to top
+                 SEC homepage
+                                                     About the SEC
+           Budget &amp; Performance
+           Careers
+           Commission Votes
+           Contact
+           Contracts
+                                                     Transparency
+           Accessibility &amp; Disability
+           Super Intelligence
+           FOIA
+           Inspector General
+           No FEAR Act Data
+           Ombuds
+           SEC Excess Personal Property Guidance
+                                                     Websites
+           Investor.gov
+           Related Sites
+           USA.gov
+                                                     Site Information
+           Plain Writing
+           Privacy &amp; Security
+           Site Map
+               Stay connected. Sign up for email updates.
+   Your email address
+   Sign Up
+                 X
+                 Facebook
+               Instagram
+                 RSS
+                 YouTube
+               Email Updates

raw/aaer/2006/AAER-2506.txt ADDED Viewed

	@@ -0,0 +1,153 @@

+ UNITED STATES OF AMERICA
+ before the
+ SECURITIES AND EXCHANGE COMMISSION
+SECURITIES EXCHANGE ACT OF 1934
+Release No.  54677 / October 31, 2006
+ACCOUNTING AND AUDITING ENFORCEMENT
+Release No. 2506 / October 31, 2006
+ADMINISTRATIVE PROCEEDING
+File No.  3-12468
+      :
+ :
+          In the Matter of : ORDER INSTITUTING ADMINISTRATIVE
+      : PROCEEDINGS PURSUANT TO RULE
+  DOUGLAS W. MARCILLE, CPA, : 102( e) OF THE COMMISSION’S RULES OF
+      : PRACTICE, MAKING FINDINGS, AND
+  Respondent.         : IMPOSING REME DIAL SANCTIONS
+      :
+____________________________________ :
+I.
+ The Securities and Exchange Commission (“Commission”) deems it appropriate and in the
+public interest that public administrative proceedings be, and hereby are, instituted against Douglas
+Marcille, CPA (“Respondent” or “Marcille”) pursuant to Rule 102(e)(3) of the Commission’s
+Rules of Practice.1
+II.
+ In anticipation of the institution of these proceedings, Respondent has submitted an Offer
+of Settlement (the “Offer”) which the Commission has determined to accept.  Solely for the
+1 Rule 102(e)(3)(i) provides, in relevant part, that:
+ The Commission, with due regard to the public interest and without  preliminary hearing,
+may, by order, . . . suspend from appearing or practicing before it any . . . accountant . . . who has
+been by name . . . permanently enjoined by any court of competent jurisdiction, by reason of his
+or her misconduct in an action brought by the Commission, from violating or aiding and abetting
+the violation of any provision of the Federal securities laws or of the rules and regulations
+thereunder.
+ 2
+purpose of these proceedings and any other proceedings brought by or on behalf of the
+Commission, or to which the Commission is a party, and without admitting or denying the findings
+herein, except as to the Commission’s jurisdiction over him and the subject matter of these
+proceedings, and the finding contained in paragraph III.3., below, which are admitted, Respondent
+consents to the entry of this Order Instituting Administrative Proceedings Pursuant to Rule 102(e)
+of the Commission’s Rules of Practice, Making Findings, and Imposing Remedial Sanctions
+(“Order”), as set forth below.
+III.
+ On the basis of this Order and Respondent’s Offer, the Commission finds that:
+ 1. Marcille, age 49, is and has been a certified public accountant licensed to
+practice in the State of Massachusetts.  He served as Chief Financial Officer of U.S. Gas & Electric,
+Inc. (“U.S. Gas”) from December 2002 until September 2004 when he became the company’s Chief
+Executive Officer, a position he currently holds.
+ 2. U.S. Gas is a Delaware corporation with its principal place of business in
+North Miami, Florida.  U.S. Gas is engaged in the business of retail sales of natural gas.  At all
+relevant times, U.S. Gas’s common stock was registered with the Commission pursuant to Section
+12(g) of the Securities Exchange Act of 1934 (“Exchange Act”).
+ 3. On September 27, 2006 the Commis sion filed a complaint against Marcille
+in SEC v. U.S. Gas & Electric, Inc. et al., (Civil Action No. C-06-22440-CIV-LENARD).  On
+October 23, 2006 the court entered an order permanently enjoining Marcille, by consent, from
+future violations of Sections 5(a), 5(c), 17(a)(2) and 17(a)(3) of the Securities Act of 1933.
+4. The Commission’s complaint alleged,  among other things, that during the
+time Marcille was its Chief Financial Officer, U.S. Gas, with the participation of its officers,
+including Marcille, made material misstatements and omissions to investors in several unregistered
+offerings concerning the use of proceeds.  Specifically, the complaint alleges that U.S. Gas, with
+the participation of its officers, including Marcille, failed to disclose to investors that excessive
+commissions were being paid to telemarketers out of the offering proceeds, and made
+misrepresentations to investors in one of the offerings regarding the amount of management fees
+that would be paid out of investor funds.
+IV.
+ In view of the foregoing, the Commission deems it appropriate and in the public interest to
+impose the sanction agreed to in Respondent Marcille’s Offer.
+ Accordingly, it is hereby ORDERED, effective immediately, that:
+ A. Marcille is suspended from appearing or practicing before the Commission as an
+accountant.
+ 3
+ B. After three years from the date of this  order, Respondent may request that the
+Commission consider his reinstatement by submitting an application (attention: Office of the
+Chief Accountant) to resume appearing or practicing before the Commission as:
+       1. a preparer or reviewer, or  a person responsible for the preparation or
+review, of any public company’s financial statements that are filed with the Commission.  Such
+an application must satisfy the Commission that Respondent’s work in his practice before the
+Commission will be reviewed either by the independent audit committee of the public company
+for which he works or in some other acceptable manner, as long as he practices before the
+Commission in this capacity; and/or
+  2.    an independent accountant.  Such an application must satisfy the
+Commission that:
+           (a) Respondent, or the public accounting firm with which he is
+associated, is registered with the Public Company Accounting Oversight Board (“Board”) in
+accordance with the Sarbanes-Oxley Act of 2002, and such registration continues to be effective;
+   (b) Respondent, or the registered  public accounting firm with which he
+is associated, has been inspected by the Board and that inspection did not identify any criticisms
+of or potential defects in the Respondent’s or the firm’s quality control system that would
+indicate that the Respondent will not receive appropriate supervision;
+   (c) Respondent has resolved all di sciplinary issues with the Board, and
+has complied with all terms and conditions of any sanctions imposed by the Board (other than
+reinstatement by the Commission); and
+   (d) Respondent acknowledges his responsibility, as long as
+Respondent appears or practices before the Commission as an independent accountant, to
+comply with all requirements of the Commission and the Board, including, but not limited to, all
+requirements relating to registration, inspections, concurring partner reviews and quality control
+standards.
+ 4
+C. The Commission will consider an application by Respondent to resume
+appearing or practicing before the Commission provided that his state CPA license is
+current and he has resolved all other disciplinary issues with the applicable state boards of
+accountancy.  However, if state licensure is dependent on reinstatement by the
+Commission, the Commission will consider an application on its other merits.  The
+Commission’s review may include consideration of, in addition to the matters referenced
+above, any other matters relating to Respondent’s character, integrity, professional conduct,
+or qualifications to appear or practice before the Commission.
+ By the Commission.
+       N a n c y  M .  M o r r i s
+       S e c r e t a r y

raw/aaer/2006/AAER-2508.txt ADDED Viewed

	@@ -0,0 +1,1426 @@

+     SEC.gov | Michael Moran, James Sievers, Martin Zaepfel, James Cannataro, John Steele, Michael Crusemann and Michael Otto
+         !function(){var e=navigator.userAgent,a=document.documentElement,n=a.className;n=n.replace("no-js","js"),/iPad|iPhone|iPod/.test(e)&&!window.MSStream&&(n+=" ua-ios"),a.className=n}();
+     {"path":{"baseUrl":"\/","pathPrefix":"","currentPath":"node\/500051","currentPathIsAdmin":false,"isFront":false,"currentLanguage":"en"},"pluralDelimiter":"\u0003","suppressDeprecationErrors":true,"gtag":{"tagId":"","consentMode":false,"otherIds":[],"events":[],"additionalConfigInfo":[]},"ajaxPageState":{"libraries":"eJxdT0GOwzAI_JBdn_oei2DkeINNZLC22devlaZS2wtiBhhmcKNUTPo97jxyaXEH3GJpiZrFhQW38A4cMqgeYQGlV19JFTKpQ-kUmvQKXP7I0cO4tC2kPnbg2wVdFslM0SCHPMs3vsEPPD7J6hgOGdPCKJyoRxxqUuePHjLLAuzVjimenRJGSLW08NoBK9LUn6SHlrytVOlcpJShB63QLSpBx_WkOzHNePol4fRQo_qMPvQ36ZXsAmd99lMNr2t_GUR9n60EyX9a_wePd5ns","theme":"uswds_sec","theme_token":null},"ajaxTrustedUrl":[],"gtm":{"tagId":null,"settings":{"data_layer":"dataLayer","include_classes":false,"allowlist_classes":"","blocklist_classes":"","include_environment":false,"environment_id":"","environment_token":""},"tagIds":["GTM-TD3BKV"]},"data":{"extlink":{"extTarget":false,"extTargetAppendNewWindowDisplay":true,"extTargetAppendNewWindowLabel":"(opens in a new window)","extTargetNoOverride":false,"extNofollow":false,"extTitleNoOverride":false,"extNoreferrer":false,"extFollowNoOverride":false,"extClass":"0","extLabel":"(link is external)","extImgClass":false,"extSubdomains":true,"extExclude":".*\\.gov|http:\/\/www.xbrl.org\/utr\/2013-05-17\/utr.xml|http:\/\/www.xbrl.org\/dtr\/type\/numeric-2009-12-16.xsd|http:\/\/www.xbrl.org\/dtr\/type\/nonNumeric-2009-12-16.xsd|https:\/\/secir.secure.force.com\/ombudsman\/OMMSForm","extInclude":"","extCssExclude":".data-exempt","extCssInclude":"","extCssExplicit":"","extAlert":true,"extAlertText":"You are now leaving the SEC Website. The link you have selected is located on another server. Please click on the OK button below to proceed to the selected site. The SEC does not endorse this web site, its sponsor, or any of the policies, activities, products, or services offered on the site or by any advertiser on the site.","extHideIcons":false,"mailtoClass":"0","telClass":"","mailtoLabel":"(link sends email)","telLabel":"(link is a phone number)","extUseFontAwesome":false,"extIconPlacement":"append","extPreventOrphan":false,"extFaLinkClasses":"fa fa-external-link","extFaMailtoClasses":"fa fa-envelope-o","extAdditionalLinkClasses":"","extAdditionalMailtoClasses":"","extAdditionalTelClasses":"","extFaTelClasses":"fa fa-phone","allowedDomains":null,"extExcludeNoreferrer":""}},"field_group":{"html_element":{"mode":"default","context":"view","settings":{"classes":"rightrail-list","show_empty_fields":false,"id":"","element":"div","show_label":true,"label_element":"h2","label_element_classes":"","attributes":"","effect":"none","speed":"fast"}}},"user":{"uid":0,"permissionsHash":"e506dfd1572f94bd1f339f1a7483bfbded31d4a9d2bdfdca3fdbc235153380ee"}}
+      Skip to search field
+      Skip to main content
+           An official website of the United States government
+           Here’s how you know
+           Here’s how you know
+                Official websites use .gov
+                              A  .gov  website belongs to an official government organization in the United States.
+                Secure .gov websites use HTTPS
+              A  lock
+              (   Lock  A locked padlock    )
+              or  https://  means you’ve safely connected to the .gov website. Share sensitive information only on official, secure websites.
+                     SEC homepage
+        Menu
+          Close
+     Search SEC.gov &amp; EDGAR
+       Search
+             Search Filings
+           Search Filings
+                             Full Text Search
+                             Latest Filings
+                             Mutual Fund Search
+                             Variable Insurance Products Search
+                             SIC Codes
+                             CIK Lookup
+                             Public Dissemination Service (PDS)
+                             Search Assistance
+             Submit Filings
+           Submit Filings
+                             EDGAR Filer Management Portal
+                             EDGAR Filing Portal
+                             Online Forms Management Portal
+                             EDGAR Next
+                             Forms Index
+                             Filer Support &amp; Resources
+             Data &amp; Research
+           Data &amp; Research
+                             Data Library
+                             Statistics &amp; Data Visualizations
+                             Structured Data
+                             Investment Management Data
+                             Open Data at the SEC
+             Rules, Enforcement, &amp; Compliance
+           Rules &amp; Regulations
+                             Rulemaking Activity
+                             Submit Public Comments
+                             Staff Guidance
+                             No-Action, Interpretive, and Exemptive Letters
+                             Self-Regulatory Organization Rulemaking
+                             Public Petitions for Rulemaking
+           Enforcement &amp; Litigation
+                             Litigation Releases
+                             Administrative Proceedings
+                             Administrative Law Judge Orders and Initial Decisions
+                             Trading Suspensions
+                             Distributions to Harmed Investors
+                             Receiverships
+           Compliance
+                             Examination Priorities
+                             Risk Alerts
+                             Compliance Outreach Program
+                             Proposed Rules
+                             What&#039;s New
+                             Whistleblower Program
+             Featured Topics
+           Featured Topics
+                             Crypto Task Force
+                             Cybersecurity
+                             Market Structure Analytics
+                             Saving and Investing for Military Personnel
+                             Saving and Investing for Teachers
+                             SEC-CFTC Harmonization Initiative
+                             Treasury Clearing Implementation
+             About
+           About
+                             Mission
+                             Commissioners
+                             Divisions &amp; Offices
+                             Division &amp; Office Directors
+                             Advisory Committees
+                             Budget &amp; Performance
+                             Reports &amp; Publications
+                             Commission Votes
+                             Contact the SEC
+                             Careers
+                             Submit a Tip or Complaint
+                           Newsroom
+                           |
+                           Investors
+                           Small Businesses
+                           Whistleblowers
+                           Newsroom
+                           |
+                           Investors
+                           Small Businesses
+                           Whistleblowers
+     Search SEC.gov &amp; EDGAR
+       Search
+        More in this Section
+                 Enforcement &amp; Litigation
+           Litigation Releases
+           Administrative Proceedings
+           Administrative Law Judge Orders and Initial Decisions
+           Trading Suspensions
+           Distributions to Harmed Investors
+           Receiverships
+           Electronic Filings in Administrative Proceedings (eFAP)
+           Rules of Practice
+           Applications for Reentry
+           Reports of Investigations
+           Whistleblower Program
+           Public Alert: Unregistered Soliciting Entities (PAUSE)
+           SEC Action Lookup - Individuals (SALI)
+           Enforcement Data Delivery Standards
+           Small Businesses
+           Appellate Briefs
+           Amicus / Friend of the Court Briefs
+                 Enforcement &amp; Litigation
+           Litigation Releases
+           Administrative Proceedings
+           Administrative Law Judge Orders and Initial Decisions
+           Trading Suspensions
+           Distributions to Harmed Investors
+           Receiverships
+           Electronic Filings in Administrative Proceedings (eFAP)
+           Rules of Practice
+           Applications for Reentry
+           Reports of Investigations
+           Whistleblower Program
+           Public Alert: Unregistered Soliciting Entities (PAUSE)
+           SEC Action Lookup - Individuals (SALI)
+           Enforcement Data Delivery Standards
+           Small Businesses
+           Appellate Briefs
+           Amicus / Friend of the Court Briefs
+               Home
+               Enforcement and Litigation
+               Litigation Releases
+              Michael Moran, James Sievers, Martin Zaepfel, James Cannataro, John Steele, Michael Crusemann and Michael Otto
+        Michael Moran, James Sievers, Martin Zaepfel, James Cannataro, John Steele, Michael Crusemann and Michael Otto
+                   U.S. SECURITIES AND EXCHANGE COMMISSION
+ Litigation Release No. 19897 / November 2, 2006
+ Accounting and Auditing Enforcement  Release No. 2508 / November 2, 2006
+  Securities and Exchange Commission v. Michael Moran and James Sievers , No. 06-CV-5968, N.D. Ill., November 2, 2006
+  Securities and Exchange Commission v. Martin Zaepfel , No. 06-CV-5967, N.D. Ill., November 2, 2006
+  Securities and Exchange Commission v. James Cannataro , No. 06-CV-5961, N.D. Ill., November 2, 2006
+  Securities and Exchange Commission v. John Steele , No. 06-CV-5965, N.D. Ill., November 2, 2006
+  Securities and Exchange Commission v. Michael Crusemann and Michael Otto , No. 06-CV-5969, N.D. Ill., November 2, 2006
+ On November 2, 2006, the Securities and Exchange Commission filed settled enforcement actions against former officers and directors of Spiegel, Inc., an Illinois-based public company.  During the relevant period, Spiegel owned and operated catalogue retailers Spiegel, Eddie Bauer and Newport News.
+ The Commission filed settled charges against the former Co-Presidents of Spiegel, Michael Moran and James Sievers, former CEO Martin Zaepfel, former CFO James Cannataro, and former Treasurer John Steele, in connection with the overstatement of the performance of Spiegel's credit card receivables portfolio.  In addition, the Commission settled with the former Chairman of Spiegel's Board of Directors, Michael Otto, and a former director, Michael Crusemann, and former CEO Martin Zaepfel in connection with the decision to withhold Spiegel's required financial reports to avoid issuance by its outside auditor of a "going concern" opinion.
+ The Commission alleges in its complaints that Moran, Sievers, Zaepfel, Cannataro and Steele improperly increased inter-company fees between Spiegel's retail subsidiaries and Spiegel's bank subsidiary, which had the effect of hiding the deteriorating performance of the company's credit card receivables portfolio.  Spiegel was thus able to benefit improperly from the securitization of that portfolio.
+ The Commission also alleged that former Directors Otto and Crusemann and former CEO Zaepfel all participated in the decision to not file Spiegel's 2001 Form 10-K and first quarter 2002 Form 10-Q on a timely basis.  Prior to the deadline for the filing of the Form 10-K, Spiegel's outside auditor informed the company that a "going concern" opinion would accompany the filing unless Spiegel was able to resolve its underlying financial problems.  When it failed to resolve those problems by the April 15, 2002 deadline, the company improperly elected to withhold its filing rather than make the required disclosures to the investing public.
+ In light of the above, the Commission alleged that Moran, Sievers, Zaepfel, Cannataro and Steele violated Sections 17(a)(2) and 17(a)(3) of the Securities Act of 1933 and violated and aided and abetted violations of various books and records and financial reporting provisions of the Securities Exchange Act of 1934. The Commission also alleged that Otto, Crusemann and Zaepfel aided and abetted Spiegel's violations of the financial reporting provisions of the Exchange Act.
+ Without admitting or denying the Commission's allegations, Moran, Sievers, Cannataro, Steele, Otto, Crusemann and Zaepfel have consented to the Court's issuance of an order of permanent injunction enjoining them from future violations of the federal securities laws.  In addition, Moran, Sievers, Cannataro and Steele have consented to each pay a civil penalty of $120,000.  Otto and Crusemann have consented to each pay a civil penalty of $100,000.  Zaepfel has consented to pay a civil penalty of $170,000.
+  SEC Complaints in this matter
+  Michael Crusemann and Michael Otto
+  John R. Steele
+  Martin Zaepfel
+  James R. Cannataro
+  Michael R. Moran and James W. Sievers
+  &nbsp;
+   Resources
+     Complaint: Michael Crusemann and Michael Otto
+     Complaint: John R. Steele
+     Complaint: Martin Zaepfel
+     Complaint: James R. Cannataro
+     Complaint: Michael R. Moran and James W. Sievers
+           Return to top
+                 SEC homepage
+                                                     About the SEC
+           Budget &amp; Performance
+           Careers
+           Commission Votes
+           Contact
+           Contracts
+                                                     Transparency
+           Accessibility &amp; Disability
+           Super Intelligence
+           FOIA
+           Inspector General
+           No FEAR Act Data
+           Ombuds
+           SEC Excess Personal Property Guidance
+                                                     Websites
+           Investor.gov
+           Related Sites
+           USA.gov
+                                                     Site Information
+           Plain Writing
+           Privacy &amp; Security
+           Site Map
+               Stay connected. Sign up for email updates.
+   Your email address
+   Sign Up
+                 X
+                 Facebook
+               Instagram
+                 RSS
+                 YouTube
+               Email Updates

raw/aaer/2006/AAER-2511.txt ADDED Viewed

	@@ -0,0 +1,1373 @@

+     SEC.gov | Stansbury Holdings, et al.
+         !function(){var e=navigator.userAgent,a=document.documentElement,n=a.className;n=n.replace("no-js","js"),/iPad|iPhone|iPod/.test(e)&&!window.MSStream&&(n+=" ua-ios"),a.className=n}();
+     {"path":{"baseUrl":"\/","pathPrefix":"","currentPath":"node\/500071","currentPathIsAdmin":false,"isFront":false,"currentLanguage":"en"},"pluralDelimiter":"\u0003","suppressDeprecationErrors":true,"gtag":{"tagId":"","consentMode":false,"otherIds":[],"events":[],"additionalConfigInfo":[]},"ajaxPageState":{"libraries":"eJxdT0GOwzAI_JBdn_oei2DkeINNZLC22devlaZS2wtiBhhmcKNUTPo97jxyaXEH3GJpiZrFhQW38A4cMqgeYQGlV19JFTKpQ-kUmvQKXP7I0cO4tC2kPnbg2wVdFslM0SCHPMs3vsEPPD7J6hgOGdPCKJyoRxxqUuePHjLLAuzVjimenRJGSLW08NoBK9LUn6SHlrytVOlcpJShB63QLSpBx_WkOzHNePol4fRQo_qMPvQ36ZXsAmd99lMNr2t_GUR9n60EyX9a_wePd5ns","theme":"uswds_sec","theme_token":null},"ajaxTrustedUrl":[],"gtm":{"tagId":null,"settings":{"data_layer":"dataLayer","include_classes":false,"allowlist_classes":"","blocklist_classes":"","include_environment":false,"environment_id":"","environment_token":""},"tagIds":["GTM-TD3BKV"]},"data":{"extlink":{"extTarget":false,"extTargetAppendNewWindowDisplay":true,"extTargetAppendNewWindowLabel":"(opens in a new window)","extTargetNoOverride":false,"extNofollow":false,"extTitleNoOverride":false,"extNoreferrer":false,"extFollowNoOverride":false,"extClass":"0","extLabel":"(link is external)","extImgClass":false,"extSubdomains":true,"extExclude":".*\\.gov|http:\/\/www.xbrl.org\/utr\/2013-05-17\/utr.xml|http:\/\/www.xbrl.org\/dtr\/type\/numeric-2009-12-16.xsd|http:\/\/www.xbrl.org\/dtr\/type\/nonNumeric-2009-12-16.xsd|https:\/\/secir.secure.force.com\/ombudsman\/OMMSForm","extInclude":"","extCssExclude":".data-exempt","extCssInclude":"","extCssExplicit":"","extAlert":true,"extAlertText":"You are now leaving the SEC Website. The link you have selected is located on another server. Please click on the OK button below to proceed to the selected site. The SEC does not endorse this web site, its sponsor, or any of the policies, activities, products, or services offered on the site or by any advertiser on the site.","extHideIcons":false,"mailtoClass":"0","telClass":"","mailtoLabel":"(link sends email)","telLabel":"(link is a phone number)","extUseFontAwesome":false,"extIconPlacement":"append","extPreventOrphan":false,"extFaLinkClasses":"fa fa-external-link","extFaMailtoClasses":"fa fa-envelope-o","extAdditionalLinkClasses":"","extAdditionalMailtoClasses":"","extAdditionalTelClasses":"","extFaTelClasses":"fa fa-phone","allowedDomains":null,"extExcludeNoreferrer":""}},"user":{"uid":0,"permissionsHash":"e506dfd1572f94bd1f339f1a7483bfbded31d4a9d2bdfdca3fdbc235153380ee"}}
+      Skip to search field
+      Skip to main content
+           An official website of the United States government
+           Here’s how you know
+           Here’s how you know
+                Official websites use .gov
+                              A  .gov  website belongs to an official government organization in the United States.
+                Secure .gov websites use HTTPS
+              A  lock
+              (   Lock  A locked padlock    )
+              or  https://  means you’ve safely connected to the .gov website. Share sensitive information only on official, secure websites.
+                     SEC homepage
+        Menu
+          Close
+     Search SEC.gov &amp; EDGAR
+       Search
+             Search Filings
+           Search Filings
+                             Full Text Search
+                             Latest Filings
+                             Mutual Fund Search
+                             Variable Insurance Products Search
+                             SIC Codes
+                             CIK Lookup
+                             Public Dissemination Service (PDS)
+                             Search Assistance
+             Submit Filings
+           Submit Filings
+                             EDGAR Filer Management Portal
+                             EDGAR Filing Portal
+                             Online Forms Management Portal
+                             EDGAR Next
+                             Forms Index
+                             Filer Support &amp; Resources
+             Data &amp; Research
+           Data &amp; Research
+                             Data Library
+                             Statistics &amp; Data Visualizations
+                             Structured Data
+                             Investment Management Data
+                             Open Data at the SEC
+             Rules, Enforcement, &amp; Compliance
+           Rules &amp; Regulations
+                             Rulemaking Activity
+                             Submit Public Comments
+                             Staff Guidance
+                             No-Action, Interpretive, and Exemptive Letters
+                             Self-Regulatory Organization Rulemaking
+                             Public Petitions for Rulemaking
+           Enforcement &amp; Litigation
+                             Litigation Releases
+                             Administrative Proceedings
+                             Administrative Law Judge Orders and Initial Decisions
+                             Trading Suspensions
+                             Distributions to Harmed Investors
+                             Receiverships
+           Compliance
+                             Examination Priorities
+                             Risk Alerts
+                             Compliance Outreach Program
+                             Proposed Rules
+                             What&#039;s New
+                             Whistleblower Program
+             Featured Topics
+           Featured Topics
+                             Crypto Task Force
+                             Cybersecurity
+                             Market Structure Analytics
+                             Saving and Investing for Military Personnel
+                             Saving and Investing for Teachers
+                             SEC-CFTC Harmonization Initiative
+                             Treasury Clearing Implementation
+             About
+           About
+                             Mission
+                             Commissioners
+                             Divisions &amp; Offices
+                             Division &amp; Office Directors
+                             Advisory Committees
+                             Budget &amp; Performance
+                             Reports &amp; Publications
+                             Commission Votes
+                             Contact the SEC
+                             Careers
+                             Submit a Tip or Complaint
+                           Newsroom
+                           |
+                           Investors
+                           Small Businesses
+                           Whistleblowers
+                           Newsroom
+                           |
+                           Investors
+                           Small Businesses
+                           Whistleblowers
+     Search SEC.gov &amp; EDGAR
+       Search
+        More in this Section
+                 Enforcement &amp; Litigation
+           Litigation Releases
+           Administrative Proceedings
+           Administrative Law Judge Orders and Initial Decisions
+           Trading Suspensions
+           Distributions to Harmed Investors
+           Receiverships
+           Electronic Filings in Administrative Proceedings (eFAP)
+           Rules of Practice
+           Applications for Reentry
+           Reports of Investigations
+           Whistleblower Program
+           Public Alert: Unregistered Soliciting Entities (PAUSE)
+           SEC Action Lookup - Individuals (SALI)
+           Enforcement Data Delivery Standards
+           Small Businesses
+           Appellate Briefs
+           Amicus / Friend of the Court Briefs
+                 Enforcement &amp; Litigation
+           Litigation Releases
+           Administrative Proceedings
+           Administrative Law Judge Orders and Initial Decisions
+           Trading Suspensions
+           Distributions to Harmed Investors
+           Receiverships
+           Electronic Filings in Administrative Proceedings (eFAP)
+           Rules of Practice
+           Applications for Reentry
+           Reports of Investigations
+           Whistleblower Program
+           Public Alert: Unregistered Soliciting Entities (PAUSE)
+           SEC Action Lookup - Individuals (SALI)
+           Enforcement Data Delivery Standards
+           Small Businesses
+           Appellate Briefs
+           Amicus / Friend of the Court Briefs
+               Home
+               Enforcement and Litigation
+               Litigation Releases
+              Stansbury Holdings, et al.
+        Stansbury Holdings, et al.
+                   U.S. SECURITIES AND EXCHANGE COMMISSION
+ Litigation Release No. 19901 / November 7, 2006
+ Accounting and Auditing Enforcement  Release No. 2511 / November 7, 2006
+  Securities and Exchange Commission v. Stansbury Holdings, et al. , Civil Action No. 06-cv-00088-REB-BNB
+ The Commission announced that on October 12, 2006, the United States District Court for the District of Colorado entered a default judgment against Defendant Stansbury Holdings Corporation.
+ In its complaint, the Commission alleged that Stansbury Holdings defrauded investors by materially overstating its assets in annual and quarterly reports filed with the Commission and in a private placement memorandum.  Stansbury fraudulently overvalued two if its mining properties known as Hamilton and Dillon despite numerous events demonstrating they were worth far less, including foreclosure actions on the properties.  Stansbury also failed to adjust the value of these assets even after Stansbury changed its business plan and decided not to mine vermiculite, the activity for which it had purchased the two mining claims.  Stansbury failed to create and maintain required books, records and accounts and to devise and maintain a required system of internal accounting controls.  It failed to obtain quarterly reviews of its financial statements for several quarters and it failed to file two mandatory periodic reports with the Commission.
+ By order of the court, Stansbury Holdings is permanently restrained and enjoined from violating, directly or indirectly, Section 17(a) of the Securities Act of 1933 ("Securities Act"), Sections 10(b), 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Securities Exchange Act of 1934 ("Exchange Act") and Rules 10b-5, 12b-20, 13a-1, 13a-2 and 13b2-1 thereunder.
+ SEC Complaint in this matter  -->
+ &nbsp;
+           Return to top
+                 SEC homepage
+                                                     About the SEC
+           Budget &amp; Performance
+           Careers
+           Commission Votes
+           Contact
+           Contracts
+                                                     Transparency
+           Accessibility &amp; Disability
+           Super Intelligence
+           FOIA
+           Inspector General
+           No FEAR Act Data
+           Ombuds
+           SEC Excess Personal Property Guidance
+                                                     Websites
+           Investor.gov
+           Related Sites
+           USA.gov
+                                                     Site Information
+           Plain Writing
+           Privacy &amp; Security
+           Site Map
+               Stay connected. Sign up for email updates.
+   Your email address
+   Sign Up
+                 X
+                 Facebook
+               Instagram
+                 RSS
+                 YouTube
+               Email Updates

raw/aaer/2006/AAER-2518.txt ADDED Viewed

	@@ -0,0 +1,430 @@

+ UNITED STATES OF AMERICA
+ Before the
+ SECURITIES AND EXCHANGE COMMISSION
+SECURITIES EXCHANGE ACT OF 1934
+Release No.  54830 / November 29, 2006
+ACCOUNTING AND AUDITING ENFORCEMENT
+Release No.  2518 / November 29, 2006
+ADMINISTRATIVE PROCEEDING
+File No. 3-12487
+ ______________________________
+     :
+In the Matter of   : ORDER INSTITUTING PROCEEDINGS
+     : PURSUANT TO SECTION 21C OF THE
+ASHLAND INC. and     : SECURITIES EXCHANGE ACT OF
+WILLIAM C. OLASIN,  : 1934, MAKING FINDINGS AND
+     :  I M P O S I N G  A  CEASE-AND-DESIST ORDER
+  Respondents.  :
+                                                               :
+I.
+ The Securities and Exchange Commission (“Commission”) deems it appropriate that cease-
+and-desist proceedings be, and hereby are, instituted pursuant to Section 21C of the Securities
+Exchange Act of 1934 (“Exchange Act”) against Ashland Inc. (“Ashland”) and William C. Olasin
+(“Olasin”) (collectively, “Respondents”).
+II.
+ In anticipation of the institution of these proceedings, Ashland and Olasin each have
+submitted an Offer of Settlement (the “Offers”), which the Commission has determined to accept.
+Solely for the purpose of these proceedings and any other proceedings brought by or on behalf of
+the Commission, or to which the Commission is a party, and without admitting or denying the
+findings herein, except as to the Commission’s jurisdiction over Respondents and the subject
+matter of these proceedings, which Respondents admit, Respondents consent to the issuance of this
+Order Instituting Proceedings Pursuant to Section 21C of the Securities Exchange Act of 1934,
+Making Findings and Imposing a Cease-and-Desist Order (“Order”), as set forth below.
+III.
+FACTS
+ On the basis of this Order and Respondents’ Offers, the Commission finds that:
+ A. Summary
+Between 1999 and 2001, William Olasin, Ashland Inc.’s Director of Environmental
+Remediation, reduced the cost estimates for remediating environmental contamination at dozens of
+chemical and refinery sites for which Ashland had responsibility.  Ashland used those estimates to
+determine its environmental reserve, which Ashland disclosed in the periodic reports that it filed
+with the Commission.  Olasin had no reasonable basis for reducing these cost estimates, which had
+been developed by a team of Ashland engineers, an outside consultant, and a computer program.
+Ashland’s process for setting its environmental reserve did not establish adequate
+guidelines for, or require documentation or review of, adjustments to the cost estimates.  Ashland
+included the estimates that Olasin had reduced in its reported environmental reserve.  As a result,
+Ashland materially understated its environmental reserve and overstated its net income in annual
+and quarterly reports filed from 1999 to 2001.
+Ashland violated the reporting, books and records, and internal controls provisions of the
+Exchange Act, Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B) and Rules 12b-20, 13a-1, and 13a-13
+thereunder.  Olasin caused Ashland’s violations, and also violated Rule 13b2-1 of the Exchange
+Act.
+ B. Respondents
+ 1. Ashland Inc. is a Fortune 500 chemical company incorporated in
+Kentucky.  Ashland’s common stock is registered with the Commission under Section 12(b) of the
+Exchange Act and is listed on the New York and Chicago Stock Exchanges under the symbol
+“ASH.”  During the relevant period, Ashland’s primary businesses included chemical production
+and distribution, such as its Valvoline motor oil division, highway and bridge construction, and
+petroleum refining and marketing.  Ashland is responsible for cleaning up environmental
+contamination at locations throughout the country.  Ashland’s fiscal year ends on September 30
+and, in 2005, Ashland reported revenue of $9.9 billion and operating income of $746 million.
+Ashland’s environmental reserve was a significant item in its financial statements from 1998 to
+2005, ranging from a low of $152 million to a high of $178 million.
+  2. William Olasin, age 55, resides in Dublin, Ohio.  Olasin was Ashland’s
+Director of Environmental Remediation from 1996 until April 2006, when Ashland reassigned
+Olasin as a project manager within the Engineering Department.  Olasin has a B.A. from Marietta
+College, Ohio in biology and geology and a B.S. from the University of Michigan in natural
+resources.
+ 2
+ C. Relevant Accounting Principles
+ As a public company, Ashland is required to fairly, accurately, and timely report its
+financial results and condition.  To ensure fair and accurate reports, the federal securities laws and
+the Commission’s regulations require public companies, such as Ashland, to prepare and present
+their reports and financial statements in conformity with Generally Accepted Accounting
+Principles (“GAAP”).  Under GAAP, items listed in financial statements must be reliable, i.e.,
+sufficiently faithful in their representation of the underlying obligations and sufficiently free of
+error and bias to be useful to others making decisions based on the financial statements.1  Financial
+statements filed with the Commission that are not prepared in accordance with GAAP are
+presumed to be misleading or inaccurate.  Ashland represented in its Commission filings that its
+financial statements complied with GAAP.
+Ashland’s expenditures for environmental compliance have a significant effect on its
+businesses.  As required by GAAP, Ashland accrues an environmental reserve for future costs that
+it expects to incur to remediate contamination.2  Ashland explained in its annual reports and the
+notes to its financial statements that the reserve reflects the company’s “estimates of the most
+likely costs which will be incurred over an extended period to remediate identified
+environmental conditions for which the costs are reasonably estimable[.]”
+ D. Ashland’s Process for Estimating the Environmental Reserve
+From 1999 through 2001, Ashland’s environmental remediation efforts were managed by
+the Remediation Group within the company’s Environmental, Health and Safety Department
+(“EH&S”).  As the director of Ashland’s Remediation Group, Olasin was responsible for
+Ashland’s determination of its future environmental liability.  Olasin supervised a group of six
+environmental engineers who managed remediation at various sites and determined the initial
+liability estimates used to set the reserve.
+Although Olasin was responsible for the accuracy of all estimates, Olasin’s Remediation
+Group provided estimates for only some categories, including the chemical and refinery sites.  For
+other categories, Olasin reviewed estimates forwarded to him by other Ashland divisions and
+consultants.
+Olasin’s Remediation Group used a “decision tree” method for determining the cleanup
+cost estimates for remediating the chemical and refinery sites.  Each spring, the engineers in the
+1  FASB Concepts Statement No. 5, Recognition and Measurement in Financial Statements of
+Business Enterprises, paragraphs 63 and 75.
+2  Financial Accounting Standard No. 5, Accounting for Contingencies (“FAS 5”), requires Ashland to
+accrue for future remediation costs if it is probable that the company has incurred a liability and it can
+reasonably estimate the amount of the loss.  The American Institute of Certified Public Accountants’
+Statement of Position 96-1, Environmental Remediation Liabilities, identifies future remediation costs that
+must be included in the company’s environmental reserve, such as pre-cleanup activities and performance of
+remedial action.
+ 3
+Remediation Group met for two days with an independent, outside consultant to analyze each
+remediation site.  Olasin did not participate in these sessions because of the independent
+consultant’s concern that Olasin could bias the input of the engineers.  At the sessions, the
+engineers presented possible remediation strategies for each site and the estimated costs for each
+remedy.  The group critiqued each strategy and cost estimate.  The independent consultant, who
+had a doctorate in engineering and 25 years of environmental remediation experience, facilitated
+the discussion by asking for justifications for the engineers’ estimates and keeping the group within
+a set of “ground rules,” which described the types of costs that should be accrued and listed
+assumptions that Ashland used in the process.
+After the engineers reached a consensus for each site, the consultant entered the estimates
+into a computer program called “Crystal Ball,” which generated a probability range of the total
+future cost estimates for each site.  The Crystal Ball output was forwarded to Olasin for his review.
+Ashland considered it appropriate for Olasin to correct mistakes in the estimates or otherwise
+adjust them, as long as he had a reasonable basis for doing so.  After his review, Olasin provided
+the cost estimates to an accountant who worked for Ashland as a contractor.  The accountant
+compiled all estimates into a single report, which Olasin then forwarded to an assistant controller.
+The assistant controller used the estimates to determine Ashland’s environmental reserve, which
+Ashland recorded in its books and records and reported in its Commission filings.
+Ashland conducted this process once each year, and recorded any resulting change to its
+environmental reserve during the fourth quarter.  In the first three quarters of each following year,
+Ashland carried forward the prior year’s reserve estimate, after making adjustments based on
+expenditures during the quarter and any unusual developments.
+ E. Olasin’s Reductions
+ Between 1999 and 2001, Olasin made multiple reductions to the cost estimates determined
+by the team of engineers and the independent consultant that Ashland used to set its environmental
+reserve.  Olasin had no reasonable basis and no supporting documentation for these reductions,
+which generally were across-the-board reductions of various sites by the same large percentage.
+ In 1999, after reviewing the Crystal Ball output , Olasin directed the accountant to reduce
+by 25% the Crystal Ball calculations for fourteen of the chemical and refinery sites whose costs
+were estimated through the decision tree process – including seven of the ten largest sites.  Olasin
+then directed the accountant to reduce the reserve for all chemical and refinery locations whose
+costs were estimated through the decision tree process (more than fifty sites) “across the board” by
+an additional 25%, including the fourteen sites already reduced.  There is neither a documented
+basis for Olasin’s reductions nor any evidence that each site’s estimate was overstated by the same
+percentage.
+Olasin’s reductions decreased Ashland’s reserve by over $12 million, which reduced the
+reserve for Ashland’s chemical and refinery sites whose costs were estimated through the decision
+tree process by 33% and decreased Ashland’s total reserve by 6.9% to $166 million.  Ashland’s
+annual report and financial statements for 1999 contained the misstated reserve.  Olasin’s
+reductions also increased Ashland’s fourth quarter net income by 6.7%, to $114 million.
+ 4
+ In 2000, Olasin used a two-step process to ad just the estimates for more than 40 chemical
+and refinery sites whose costs had been estimated through the decision tree process.  First, Olasin
+reduced the estimates for 20 sites by approximately 25%, and reduced the estimates for an
+additional five sites by approximately 44%, the equivalent of two 25% reductions.  Olasin also
+reduced the estimates for nine sites, including three of the five largest, by 38% to 73% to round
+number estimates.3  Olasin also increased the estimates for five sites.  Second, Olasin reduced the
+estimates for 38 sites by an additional 3%.  Revised Crystal Ball data reflecting the first series of
+adjustments was maintained, but no documentation exists to justify the reductions, or to indicate
+that multiple sites were overstated by the same percentage.
+Olasin’s reductions in 2000 decreased Ashland’s reserve by over $12 million, which
+reduced the reserve for chemical sites whose costs were estimated through the decision tree process
+by 41% and reduced Ashland’s total reserve by 7% to $163 million.  The adjustment also increased
+Ashland’s annual net income before charges for one-time items for 2000 by 2.65% to $292 million,
+and increased net income after charges for one-time items by 12.1% to $70 million.4  The
+adjustment increased Ashland’s fourth quarter net income by 9% to $96 million.5
+ In 2001, Olasin made an across-the-boar d, 10% reduction to estimates for 40 sites,
+reducing the reserve by $1,904,000 to $176 million.  There is no documentation supporting these
+reductions.  Olasin’s 10% reduction had the effect of keeping constant the total reserve for the
+chemical sites that he managed, and reduced Ashland’s total environmental reserve by
+approximately 1%.
+Olasin also considered both a 24% and a 10% reduction in 2002, but abandoned the
+planned reduction when Ashland’s internal auditors commenced an internal audit at approximately
+the time the reduction would have been finalized.  A week before the internal auditors interviewed
+Olasin, the Crystal Ball program was re-run to remove the planned adjustment. 6
+3  Olasin reduced three of the five largest estimates from $2,968,000, $2,446,000, and $2,324,000 to
+$800,000, $1,000,000, and $1,000,000, respectively.
+4  Ashland incurred one-time charges in 2000 for a discontinued operation and debt retirement.
+5  The 2000 adjustment was carried forward during the first three quarters in 2001.  Ashland began
+disclosing its environmental reserve in quarterly reports in the second quarter of 2001.  As a result, the
+reduction in 2000 decreased the environmental reserve that Ashland reported in its quarterly reports for
+the second and third quarters of 2001 by 7.5% in the second quarter and 6.3% in the third quarter.
+6  Ashland’s reserve for the chemical sites that we re the subject of Olasin’s reductions increased
+considerably when his reductions stopped after 2001.  From 2001 to 2005, Ashland’s reserve for the
+chemical onsite locations grew from $18 million to over $36 million.
+ 5
+F. Ashland’s Internal Controls
+During the relevant period, Ashland’s internal controls for setting the company’s
+environmental reserve depended on detailed, documented support for the engineers’ estimates, as
+well as the peer critique session led by the independent consultant.  Ashland maintained specific,
+written procedures describing this process.  However, Ashland’s internal controls were inadequate
+because they did not establish guidelines for, or require documentation or review of, adjustments to
+the engineers’ cost estimates.  Olasin helped design these controls.
+Prior to 2001, Ashland’s written procedures did not provide a process for adjusting the cost
+estimates generated by the Crystal Ball process.  In 2001, Ashland changed the written procedures
+to indicate that the “management team” might adjust the estimates produced by the engineers.
+However, the revised procedures did not identify the “management team” and did not establish any
+guidelines setting forth when or how an adjustment could be made.  In addition, unlike the
+documented, factual basis required for the original estimates, the procedures did not require
+documentation or review of any adjustments.
+ G . Ashland Receives Complaints in 2002
+ In 2002, three engineers who worked for Olasin raised questions about Olasin’s conduct
+regarding the process of setting the environmental reserve in their confidential responses to an
+internal Code of Conduct Questionnaire and Certification Statement.  One engineer specifically
+alleged, among other things, that Olasin was improperly reducing the reserve through
+“management adjustments.”
+ 7
+ In response to these reports, Ashland’s la w department informed the internal audit
+department about the first engineer’s complaints and asked it to conduct an audit.  Consistent with
+the audit department’s normal practice, the internal audit was designed to evaluate internal
+controls, not to determine whether Ashland’s reserve conformed with GAAP.  The internal
+auditors did nothing to familiarize themselves with the accounting rules for an environmental
+reserve.
+ The internal auditors reviewed only fiscal years 2001 and 2002, and discovered Olasin’s
+10% reduction in 2001.  The auditors asked Olasin about the 2001 reduction, and Olasin said that
+he reduced the estimates because, in his judgment, they were approximately 10% too high and he
+did not have time for a site-by-site review.  The auditors asked Olasin for documentation or other
+support for the reduction in 2001, but he said there was none.  The auditors also reviewed
+individual adjustments that Olasin made in 2002, and asked Olasin and the remediation engineers
+responsible for the sites in question about the adjustments.  Olasin explained the reasons for the
+adjustments, and the engineers agreed that the adjustments were proper.  The auditors did not find
+the planned across-the-board reductions for 2002.  The auditors concluded that the 10% reduction
+in 2001 (which amounted to less than $2 million) was not quantitatively material and
+recommended changes to Ashland’s environmental reserve process, including documentation and
+tracking of all changes to cost estimates, and review and approval by the engineers of any change
+made to site estimates.  Ashland implemented these recommendations.
+7  Olasin himself referred to his reductions as “management adjustments.”
+ 6
+A few days after responding to a preview of the internal audit report, Olasin told the first
+engineer (whose identity he had learned) that his performance was suffering and that he should
+spend the weekend thinking about whether he wanted to stay with the company.  The engineer
+ultimately left Ashland because he believed that he was being subjected to retaliation.8  Ashland
+learned about the engineer’s concerns about retaliation, including Olasin’s instruction that the
+engineer should consider whether he wanted to continue working at Ashland.  Ashland did not
+discipline Olasin for this conduct, but his supervisor told him that it was wrong.  In April 2006,
+after the Commission staff’s investigation was complete, Ashland reassigned Olasin as a project
+manager within Ashland’s Engineering Department and removed him from the reserve setting
+process.
+ H. Legal Analysis
+  1. Reporting Violations
+Section 13(a) of the Exchange Act and Rules 13a-1 and 13a-13 thereunder require issuers
+with securities registered under Section 12 of the Exchange Act to file annual and quarterly reports
+with the Commission, and the obligation to file such reports includes the requirement that they be
+true and correct.  Rule 12b-20 further requires that such reports contain any additional information
+necessary to ensure that the required statements in the reports are not, under the circumstances,
+materially misleading.  Financial statements in Commission filings that do not comply with GAAP
+are presumed to be misleading.  Regulation S-X, 17 C.F.R. 210.4-01(a)(1).
+GAAP required Ashland to maintain an environmental reserve, and Ashland identified the
+reserve in its Commission filings as important to its business.  As discussed above, Ashland’s
+annual reports and notes to the company’s financial statements filed on Form 10-K for 1999 and
+2000 materially understated Ashland’s environmental reserve and overstated its net income.
+Ashland also materially understated the company’s environmental reserve in its quarterly reports
+for the second and third quarters of 2001, filed on Form 10-Q.  The misstatements ranged from 7%
+to 12%.  As a result of this conduct, Ashland violated Section 13(a) of the Exchange Act and Rules
+12b-20, 13a-1, and 13a-13 thereunder.  Olasin caused Ashland’s violations by improperly reducing
+the cost estimates used to determine Ashland’s environmental reserve.
+ 2. Record Keeping and Internal Controls Violations
+Section 13(b)(2)(A) of the Exchange Act requires Section 12 registrants to make and keep
+books, records, and accounts that accurately and fairly reflect the transactions and dispositions of
+their assets.  Section 13(b)(2)(B) of the Exchange Act requires such registrants to devise and
+maintain a system of internal accounting controls sufficient to provide reasonable assurances that,
+among other things, transactions are recorded as necessary to permit preparation of financial
+statements in conformity with GAAP and to maintain the accountability of assets.  Exchange Act
+Rule 13b2-1 prohibits the direct or indirect falsification of any book, record, or account subject to
+8  The engineer filed a complaint with the Depart ment of Labor under the whistleblower protection
+provisions of Section 806 of the Sarbanes-Oxley Act of 2002, and eventually reached a settlement with
+Ashland.
+ 7
+Section 13(b)(2)(A).
+Ashland violated Section 13(b)(2)(A) because its books and records contained inaccurate
+cost estimates that were used to determine the company’s environmental reserve in fiscal years
+1999, 2000, and 2001.  Olasin caused Ashland’s violations by reducing the cost estimates without
+a reasonable basis and documentation.  Ashland’s internal controls were deficient, and the
+company violated Section 13(b)(2)(B), because the company had no guidelines, documentation, or
+review requirements for adjustments of the cost estimates developed by the team of Ashland
+engineers.  Olasin caused Ashland’s violations because he helped design Ashland’s controls for the
+decision tree process.  By reducing the engineers’ estimates without any reasonable basis, Olasin
+also caused Ashland’s books and records to be falsified and thereby violated Exchange Act Rule
+13b2-1.
+IV.
+UNDERTAKINGS
+A.      Ashland undertakes to implement the following revisions that it has made to its
+policies and procedures for determining its environmental reserve:
+1.      Document all adjustments to the environmental remediation reserve
+estimates and the reasons for each adjustment to create a clear audit trail of
+the estimates.
+2.      Retain all records relating to environmental remediation reserve estimates
+for a period of seven years following the period to which the reserve
+estimates relate.
+3.      Require the manager of Ashland’s Environmental Remediation Group, or
+his or her equivalent or successor, to consult with the remedial engineer or
+other individual responsible for the environmental remediation estimate for
+a given site before deciding whether to adjust the estimate of that site.
+4.      Include in Ashland’s Business Responsibility Questionnaire and
+Certification (or equivalent or successor document) sent to the
+Environmental Remediation Group and Accounting Department, or to their
+equivalents or successors, questions concerning whether the individual is
+aware of any failure to follow the Environmental Remediation Group’s (or
+its equivalent’s or successor’s) reserve-setting procedures or of any
+misstatement in Ashland’s books and records concerning any environmental
+remediation reserve.
+5.      Conduct an annual best practices review with Ashland’s outside auditor for
+the purpose of discussing and, when appropriate, modifying the company’s
+policies and procedures for determining its environmental reserve, including
+the  policies and procedures identified in this Section IV.A or instituted as a
+result of the undertaking identified in Section IV.C, below.  This review
+ 8
+shall include a comparison of each site’s reserve estimate to the site’s
+annual budget and historical expenditures.
+6.      Require a report to Ashland’s board of directors or an appropriate
+committee of the board on an annual basis regarding compliance with these
+provisions.
+B.      Ashland undertakes to preclude Olasin from participating in the determination of
+Ashland’s environmental reserve, the creation and maintenance of Ashland’s books
+and records, and the preparation of Ashland’s financial statements.
+C.      Ashland undertakes to retain PricewaterhouseCoopers LLP to review:
+1.      Ashland’s policies, procedures, and internal controls relating to the
+company’s determination of its environmental reserve.
+2.      Ashland’s policies, procedures, and internal controls relating to solicitation
+and investigation of internal complaints, and measures to prevent retaliation
+against complainants.
+Ashland will require PricewaterhouseCoopers to submit to the audit committee of
+Ashland’s board of directors and the staff of the Division of Enforcement a written
+report fully documenting its findings and proposed recommendations.  Within 90
+days after receipt of such report, Ashland’s audit committee, or board of directors,
+as appropriate, will adopt and implement such recommendations; provided,
+however, that as to any recommendation that Ashland believes is unduly
+burdensome or impractical, Ashland may suggest an alternative policy or procedure
+designed to achieve the same objective, submitted in writing to
+PricewaterhouseCoopers and the staff of the Division of Enforcement.  Ashland
+will require PricewaterhouseCoopers to reasonably evaluate any alternative policy
+or procedure proposed by Ashland, and Ashland agrees that it will abide by the
+decision of PricewaterhouseCoopers regarding such alternative proposals.
+V.
+Based on the foregoing, the Commission finds that:
+A.   Respondent Ashland violated Sections  13(a), 13(b)(2)(A), and 13(b)(2)(B) of the
+Exchange Act and Rules 12b-20, 13a-1, and 13a-13 thereunder.
+B. Respondent Olasin violat ed Exchange Act Rule 13b2-1 and caused Ashland’s
+violations of Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act and Rules 12b-20,
+13a-1, and 13a-13 thereunder.
+ 9
+VI.
+In view of the foregoing, the Commission deems it appropriate to impose the sanctions
+agreed to in Respondents’ Offers.
+Accordingly, pursuant to Section 21C of the Exchange Act, it is hereby ORDERED, that:
+ A. Respondent Ashland cease and desist from committing or causing any violations and
+any future violations of Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act and Rules
+12b-20, 13a-1, and 13a-13 thereunder.
+ B. Respondent Olasin cease  and desist from committing or causing any violations and
+any future violations of Exchange Act Rule 13b2-1 and from causing any violations and any future
+violations of Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act and Rules 12b-20,
+13a-1, and 13a-13 thereunder.
+ C. Respondent Ashland shall comply with its undertakings set forth in Section IV
+above.
+ By the Commission.
+       N a n c y  M .  M o r r i s
+       S e c r e t a r y
+ 10

raw/aaer/2008/AAER-2765.txt ADDED Viewed

	@@ -0,0 +1,84 @@

+ UNITED STATES OF AMERICA
+ before the
+SECURITIES AND EXCHANGE COMMISSION
+SECURITIES EXCHANGE ACT OF 1934
+Release No.  57092 / January 3, 2008
+ACCOUNTING AND AUDITING ENFORCEMENT
+Release No.  2765 / January 3, 2008
+ADMINISTRATIVE PROCEEDING
+File No. 3-12920
+:
+In the Matter of : ORDER INSTITUTING ADMINISTRATIVE
+: PROCEEDINGS PURSUANT TO RULE
+GREG A. GADEL (CPA), : 102(e) OF THE COMMISSION’S RULES OF
+: PRACTICE, MAKING FINDINGS, AND
+Respondent. : IMPOSING REMEDIAL SANCTIONS
+:
+____________________________________ :
+I.
+The Securities and Exchange Commission (“Commission”) deems it appropriate and in the
+public interest that public administrative proceedings be, and hereby are, instituted against Greg A.
+Gadel (“Respondent” or “Gadel”) pursuant to Ru le 102(e)(3)(i) of t he Commission’s Rules of
+Practice.1
+II.
+In anticipation of  the institution of  these proceedings, Gadel has su bmitted an Off er of
+Settlement (the “Offer”) which the Commission has determined to accept.  Solely for the purpose
+of these proceedings and any other proceedings brought by or on behalf of the Commission, or to
+which the Commission is a party, and without admitting or denying the findings herein, except as
++to the Commission’s jurisdiction over him and the subject matter of these procee dings, and the
+findings contained in Section III.3. below, which are admitted, Gadel consents to the entry of this
+1 Rule 102(e)(3)(i) provides, in relevant part, that:
+The Commission, with due regard to the public interest and without preliminary hearing, may, by order, . . .
+suspend from appearing or practicing before it any . . . accountant . . . who has been by name . . . permanently
+enjoined by any court of competent jurisdiction, by reason of his or her misconduct in an action brought by the
+Commission, from violating or aiding and abetting the violation of any provision of the Federal securities laws or of
+the rules and regulations thereunder.
+Order Instituting Administrative Proceedings Pursuant to Rule 102(e) of the Commission’s Rules
+of Practice, Making Findings, and Imposing Remedial Sanctions (“Order”), as set forth below.
+III.
+On the basis of this Order and Gadel’s Offer, the Commission finds that:
+1. Gadel, age 47, is a nd has been a certified public accountant who has ne ver
+been licensed to practice in any st ate.  He serv ed as Chie f Fina ncial Officer and Senior Vice
+President of Buca, Inc (“Buca”) from 1997 until his resignation in February 2005.
+2. Buca was, at all rel evant times, a Minnesota corporation with its principal
+place of business in Minneapolis, Minnesota.  Buca is the holding company for the Buca di Beppo
+restaurant chain.  Buca conducted an initial public offering of its stock in 1999.  Since Buca’s initial
+public offering, its common stock has been registered pursuant to Section 12(g) of t he Exchange
+Act and traded on NASDAQ.
+3. On June 7, 2006, the Commissi on filed a com plaint against Gadel in the
+civil action entitled Securities and Exchange Commission v. Greg A. Gadel and Daniel J. Skrypek,
+Civil Action Number 06-cv-2320, in the United States District Court for the District of Minnesota.
+On December 21, 2007, the c ourt entered a final judgment against Gadel, permanently enjoining
+him from future violations of Section 17(a) of the Securities Exchange Act of 1933 (“Securities
+Act”) and Sections 10(b), 13(b)(5), and 14(a) of the Securities Exchange Act of 1934 (“Exchange
+Act”) and Rules 10b-5, 13a-14, 13b2-1, 13b2- 2, 14a-3, and 14a-9 the reunder, and aiding and
+abetting violations of Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act and Rules
+12b-20, 13a-1, and 13a- 13 thereunder.  Gadel was al so prohibited from acting as  an officer or
+director of  any issuer that has a class of  s ecurities registered pursuant to Section 12 of  the
+Exchange Act, or that is required to file reports pursuant to Section 15(d) of the Exchange Act.
+4. The Commission’s complaint alleged, among other things, that Gadel
+engaged in a fraudulent  scheme which resulted in  Buca f iling materially false and misleading
+financial statements in the company’s annual reports on Form 10-K for the years ended 2000 to
+2003, and in the company’s quarterly reports for every quarter in fiscal years 2000 to 2003 and
+the first  thr ee quarters of fis cal ye ar 2004.  The complai nt a lleged that Gadel  engaged i n
+improper accounting practices that materially in creased Buca’s pre-tax income, in a  departure
+from Generally Accept ed Ac counting Principl es (“GAAP”).  These practices included
+improperly capitalizing expenses.  The complain t also alleged that Ga del f ailed to ensure
+disclosure of two related party transactions involving Buca’s Chief Executive Officer and a
+series of related party transactions in which Gadel was involved.  The complaint further alleged
+that Gadel provide d fal se and misl eading information t o Buca’s audit ors concerning Buca’s
+financial statements and falsely certi fied the acc uracy of Buca’s 2002 a nd 2003 For ms 10-K.
+The c omplaint further alleged that  Gadel was  involve d i n dra fting and approvi ng proxy
+statements that materially understated his co mpensation and the compensation of Buca’s Chief
+Executive Officer.
+2
+IV.
+In view of the foregoing, the Commission deems it appropriate and in the public interest to
+impose the sanction agreed to in Gadel’s Offer.
+Accordingly, it is hereby ORDERED, effective immediately, that:
+Gadel is suspended from appearing or practicing before the Commission as an accountant.
+ By the Commission.
+       N ancy M. Morris
+       S ecretary
+3

raw/aaer/2008/AAER-2766.pdf ADDED Viewed

Binary file (85.3 kB). View file

raw/aaer/2008/AAER-2769.txt ADDED Viewed

	@@ -0,0 +1,135 @@

+ UNITED STATES OF AMERICA
+ Before the
+SECURITIES AND EXCHANGE COMMISSION
+SECURITIES EXCHANGE ACT OF 1934
+Release No.  57177 / January 22, 2008
+ACCOUNTING AND AUDITING ENFORCEMENT
+Release No. 2769 / January 22, 2008
+ADMINISTRATIVE PROCEEDING
+File No. 3-12789
+In the Matter of
+CARL S. SANKO, CPA,
+Respondent.
+ORDER MAKING FINDINGS, AND
+IMPOSING REMEDIAL SANCTIONS
+PURSUANT TO SECTION 4C OF THE
+SECURITIES EXCHANGE ACT OF 1934
+AND RULE 102(e) OF THE
+COMMISSION’S RULES OF PRACTICE
+I.
+On September 13, 2007, the Securities and Exchange Commission (“Commission”) issued
+an Order Instituting Administrative Proceedings Pursuant to Section 4C of the Securities Exchange
+Act of 1934 and Rule 102(e) of the Commission’s Rules of Practice, and Notice of Hearing against
+Carl S. Sanko, CPA (“Sanko” or “Respondent”).
+II.
+ Respondent has submitted an Offer of Settlement (“Offer”) which the Commission has
+determined to accept.  Solely for the purpose of these proceedings and any other proceedings
+brought by or on behalf of the Commission, or to which the Commission is a party, and without
+admitting or denying the findings herein, except as to the Commission’s jurisdiction over him and
+the subject matter of these proceedings, which are admitted, Respondent consents to the entry of
+this Order Making Findings and Imposing Remedial Sanctions Pursuant to Section 4C of the
+Securities Exchange Act of 1934 and Rule 102(e) of the Commission’s Rules of Practice
+(“Order”), as set forth below.
+III.
+On the basis of this Order and Respondent’s Offer, the Commission finds1 that:
+A. RESPONDENT
+1. Sanko, 51, of Tehachapi, California, is a certified public accountant licensed in
+California since 1987.  Sanko operates as a sole proprietorship.  Sanko prepared and issued an
+audit report dated June 3, 2004, in connection with his audit of Platina Energy Group, Inc.
+(“Platina”).
+B. FACTS
+1. Platina is a Delaware corporation based in New Orleans, Louisiana.  During the
+relevant period, Platina’s common stock traded on the OTC Bulletin Board.  Its common stock is
+registered with the Commission pursuant to Section 12(g) of the Securities Exchange Act of 1934
+(“Exchange Act”).  Platina reported $638 in revenue and total assets of $14,312 for its fiscal year
+ended 2003.
+2. Platina has at all relevant times been an issuer as defined by the Sarbanes-Oxley
+Act of 2002 (the “Act”). Platina was known as Federal Protection Services, Inc. during the
+relevant period.
+3. Sanko audited Platina’s financial statements included in Platina’s annual report for
+fiscal year 2003 on Form 10-KSB, filed with the Commission on June 29, 2004.  Sanko prepared
+and issued an audit report dated June 3, 2004, which was included in Platina’s Form 10-KSB.
+4. Although Sanko was aware of the registration requirement, at no point was Sanko
+registered with the Public Company Accounting Oversight Board (“PCAOB”).
+5. Sanko received $7,500 for conducting an audit of Platina’s financial statements for
+its fiscal year 2003, and for issuing an audit report on those financial statements.
+C. VIOLATIONS
+1. Section 4C(a) of the Exchange Act provides, in relevant part, that the Commission
+“may censure any person, or deny, temporarily or permanently, to any person the privilege of
+appearing or practicing before the Commission in any way, if that person is found by the
+Commission … (1)  not to possess the requisite qualifications to represent others … or (3) to ha ve
+willfully violated, or willfully aided and abetted the violation of, any provision of the securities
+laws or the rules and regulations issued thereunder.”
+The findings herein are made pursuant to Respondent’s Offer of Settlement and are not binding on any
+other person or entity in this or any other proceeding.
+2
+1
+2. Rule 102(e)(1) of the Commission’s Rules of Practice provides that the
+Commission “may censure a person or deny, temporarily or permanently, the privilege of
+appearing or practicing before it in any way to any person who is found by the Commission ... (i)
+not to possess the requisite qualifications to represent others … or ( iii) to have willfully violated …
+any provision of the Federal securities laws or the rules and regulations thereunder.”
+3. Section 102(a) of the Act provides that “it shall be unlawful for any person that is
+not a registered public accounting firm to prepare or issue, or to participate in the preparation or
+issuance of, any audit report with respect to any issuer.”2
+4. The provisions of Section 102(a) of the Act became effective on October 22, 2003.3
+5. Based on the conduct described above, Sanko willfully4 violated Section 102(a) of
+the Act.
+D. FINDI NGS
+Based on the foregoing, the Commission finds that Sanko did not possess the requisite
+qualifications to represent others and willfully violated Section 102(a) of the Sarbanes-Oxley Act
+of 2002.
+IV.
+In view of the foregoing, the Commission deems it appropriate to impose the sanctions
+agreed to in Respondent’s Offer.
+Accordingly, it is hereby ORDERED, effective immediately:
+A. Sanko is denied the privilege of appearing or practicing before the
+Commission as an accountant.
+B. After one year from the date of this Order, Respondent may request that
+the Commission consider its reinstatement by submitting an application (attention: Office of the
+Chief Accountant) to resume appearing or practicing before the Commission as:
+2 A violation of the Act or any rule that the PCAOB issues under the Act is treated for all purposes in the
+same manner as a violation of the Exchange Act, including with respect to penalties.  Sarbanes-Oxley Act of 2002,
+15 U.S.C.A. § 7202(b)(1) (West 2002).
+3 Section 102(a) became effective “[b]eginning 180 days after the date of the determination of the
+Commission under Section 101(d)” of the Act that the PCAOB was prepared to undertake its statutory
+responsibilities.  The Commission made the required determination on April 25, 2003. See Order Regarding Section
+101(d) of the Sarbanes-Oxley Act of 2002, Securities Act of 1933 Release No. 8223, Exchange Act Release No.
+47746, 2003 WL 1956164 (Apr. 25, 2003).
+4 “Willfully” as used in this Order means intentionally committing the act that constitutes the violation.
+There is no requirement that the actor also be aware that he is violating a rule or statute. See Wonsover v. SEC, 205
+F.3d 408, 414 (D.C. Cir. 2000); Tager v. SEC, 344 F.2d 5, 8 (2d Cir. 1965).
+3
+1. a preparer or reviewer, or a person responsible for the preparation or
+review, of any public company’s financial statements that are filed with the Commission.  Such
+an application must satisfy the Commission that Respondent’s work in Respondent’s practice
+before the Commission will be reviewed either by the independent audit committee of the public
+company for which Respondent works or in some other acceptable manner, as long as
+Respondent practices before the Commission in this capacity; and/or
+2. an independent accountant.  Such an application must satisfy the
+Commission that:
+(a) Respondent is registered with the PCAOB in accordance with
+the Sarbanes-Oxley Act of 2002, and such registration continues to be effective.  However, if
+registration with the PCAOB is dependent upon reinstatement by the Commission, the
+Commission will consider an application on its other merits;
+(b) Respondent has resolved all disciplinary issues with the
+PCAOB, and has complied with all terms and conditions of any sanctions imposed by the
+PCAOB (other than reinstatement by the Commission); and
+(c) Respondent acknowledges responsibility, as long as
+Respondent appears or practices before the Commission as an independent accountant, to
+comply with all requirements of the Commission and the PCAOB, including, but not limited to,
+all requirements relating to registration, inspections, concurring partner reviews and quality
+control standards.
+C. The Commission will consider an application by Respondent to resume
+appearing or practicing before the Commission provided that Respondent’s state CPA license is
+current and Respondent has resolved all other disciplinary issues with the applicable state boards
+of accountancy. However, if state licensure is dependent on reinstatement by the Commission,
+the Commission will consider an application on its other merits.  The Commission’s review may
+include consideration of, in addition to the matters referenced above, any other matters relating
+to Respondent’s character, integrity, professional conduct, or qualifications to appear or practice
+before the Commission.
+ By the Commission.
+       N ancy M. Morris
+       S ecretary
+4

raw/aaer/2008/AAER-2770.txt ADDED Viewed

	@@ -0,0 +1,158 @@

+ UNITED STATES OF AMERICA
+ Before the
+SECURITIES AND EXCHANGE COMMISSION
+SECURITIES EXCHANGE ACT OF 1934
+Release No.  57178 / January 22, 2008
+ACCOUNTING AND AUDITING ENFORCEMENT
+Release No. 2770 / January 22, 2008
+ADMINISTRATIVE PROCEEDING
+File No. 3-12791
+In the Matter of
+FREDERICK A. KADEN & CO.,
+AND FREDERICK A. KADEN,
+CPA,
+Respondents.
+ORDER MAKING FINDINGS AND
+IMPOSING REMEDIAL SANCTIONS
+PURSUANT TO SECTION 4C OF THE
+SECURITIES EXCHANGE ACT OF 1934
+AND RULE 102(e) OF THE
+COMMISSION’S RULES OF PRACTICE
+I.
+On September 13, 2007, the Securities and Exchange Commission (“Commission”) issued
+an Order Instituting Administrative Proceedings Pursuant to Section 4C of the Securities Exchange
+Act of 1934 and Rule 102(e) of the Commission’s Rules of Practice, and Notice of Hearing against
+Frederick A. Kaden & Co. (“the Firm”) and Frederick A. Kaden, CPA (“Kaden”).  The Firm and
+Kaden will be referred to hereafter collectively as “Respondents.”
+II.
+Respondents have submitted an Offer of Settlement (“Offer”) which the Commission has
+determined to accept.  Solely for the purpose of these proceedings and any other proceedings
+brought by or on behalf of the Commission, or to which the Commission is a party, and without
+admitting or denying the findings herein, except as to the Commission’s jurisdiction over them and
+the subject matter of these proceedings, which are admitted, Respondents consent to the entry of
+this Order Making Findings and Imposing Remedial Sanctions Pursuant to Section 4C of the
+Securities Exchange Act of 1934 and Rule 102(e) of the Commission’s Rules of Practice
+(“Order”), as set forth below.
+III.
+On the basis of this Order and Respondents’ Offer, the Commission finds1 that:
+A. RESPONDENTS
+1. The Firm is a New York company and public accounting firm headquartered in
+Brentwood, New York.  The Firm prepared and issued an audit report dated March 17, 2004, in
+connection with its audit of Daxor Corporation (“Daxor”).
+2. Kaden has been a certified public accountant licensed in New York since 1982.  As
+engagement partner on the Daxor engagement, Kaden participated in the preparation and issuance
+of the March 17, 2004 Daxor audit report.
+B. FACTS
+1. Daxor is a New York corporation based in New York, New York. During the
+relevant period, Daxor’s common stock traded on the American Stock Exchange.  Its common
+stock is registered with the Commission pursuant to Section 12(b) of the Securities Exchange Act
+of 1934 (“Exchange Act”).
+2. Daxor has at all relevant times been an issuer as defined by the Sarbanes-Oxley Act
+of 2002 (the “Act”).
+3. Daxor reported $3,165,437 in revenue and total assets of $48,300,532 for its fiscal
+year ended 2003.
+4. The Firm audited Daxor’s financial statement included in Daxor’s annual report for
+fiscal year 2003 on Form 10-K, filed with the Commission on March 30, 2004.
+5. The Firm prepared and issued an audit report dated March 17, 2004, which was
+included in Daxor’s Form 10-K.
+6. Kaden participated in auditing the financial statements included in Daxor’s annual
+report for fiscal year 2003 on Form 10-K, filed with the Commission on March 30, 2004.
+7. Kaden participated in the preparation and issuance of an audit report dated March
+17, 2004, which was included in Daxor’s 10-K.
+8. Although Respondents were aware of the registration requirement, at no point was
+the Firm registered with the Public Company Accounting Oversight Board (“PCAOB”).
+9. The Firm received $11,000 for conducting an audit of Daxor’s financial statements
+for its fiscal year 2003, and for issuing an audit report on those financial statements.
+The findings herein are made pursuant to Respondents’ Offer of Settlement and are not binding on any
+other person or entity in this or any other proceeding.
+2
+1
+C. VIOLATIONS
+1. Section 4C(a) of the Exchange Act provides, in relevant part, that the Commission
+“may censure any person, or deny, temporarily or permanently, to any person the privilege of
+appearing or practicing before the Commission in any way, if that person is found by the
+Commission … (1)  not to possess the requisite qualifications to represent others … or (3) to ha ve
+willfully violated, or willfully aided and abetted the violation of, any provision of the securities
+laws or the rules and regulations issued thereunder.”
+2. Rule 102(e)(1) of the Commission’s Rules of Practice provides that the
+Commission “may censure a person or deny, temporarily or permanently, the privilege of
+appearing or practicing before it in any way to any person who is found by the Commission ... (i)
+not to possess the requisite qualifications to represent others … or ( iii) to have willfully violated …
+any provision of the Federal securities laws or the rules and regulations thereunder.”
+3. Section 102(a) of the Act provides that “it shall be unlawful for any person that is
+not a registered public accounting firm to prepare or issue, or to participate in the preparation or
+issuance of, any audit report with respect to any issuer.”2
+4. The provisions of Section 102(a) of the Act became effective on October 22, 2003.3
+5. Based on the conduct described above, the Firm willfully4 violated Section 102(a)
+of the Act.
+D. FINDI NGS
+1. Based on the foregoing, the Commission finds that the Firm and Kaden did not
+possess the requisite qualifications to represent others.
+2. Based on the foregoing, the Commission finds that the Firm willfully violated
+Section 102(a) of the Sarbanes-Oxley Act of 2002.
+2 A violation of the Act or any rule that the PCAOB issues under the Act is treated for all purposes in the
+same manner as a violation of the Exchange Act, including with respect to penalties.  Sarbanes-Oxley Act of 2002,
+15 U.S.C.A. § 7202(b)(1) (West 2002).
+3 Section 102(a) became effective “[b]eginning 180 days after the date of the determination of the
+Commission under Section 101(d)” of the Act that the PCAOB was prepared to undertake its statutory
+responsibilities.  The Commission made the required determination on April 25, 2003. See Order Regarding Section
+101(d) of the Sarbanes-Oxley Act of 2002, Securities Act of 1933 Release No. 8223, Exchange Act Release No.
+47746, 2003 WL 1956164 (Apr. 25, 2003).
+4 “Willfully” as used in this Order means intentionally committing the act that constitutes the violation.
+There is no requirement that the actor also be aware that he is violating a rule or statute. See Wonsover v. SEC, 205
+F.3d 408, 414 (D.C. Cir. 2000); Tager v. SEC, 344 F.2d 5, 8 (2d Cir. 1965).
+3
+IV.
+In view of the foregoing, the Commission deems it appropriate to impose the sanctions
+agreed to in Respondents’ Offer.
+Accordingly, it is hereby ORDERED, effective immediately, that:
+1. Frederick A. Kaden & Co
+A. The Firm is denied the privilege of appearing or practicing before the
+Commission as an accountant.
+B. After one year from the date of this Order, the Firm may request that the
+Commission consider its reinstatement by submitting an application (attention: Office of the
+Chief Accountant) to resume appearing or practicing before the Commission as:
+1. a preparer or reviewer, or a person responsible for the preparation or
+review, of any public company’s financial statements that are filed with the Commission.  Such
+an application must satisfy the Commission that the Firm’s work in the Firm’s practice before
+the Commission will be reviewed either by the independent audit committee of the public
+company for which the Firm works or in some other acceptable manner, as long as the Firm
+practices before the Commission in this capacity; and/or
+2. an independent accountant.  Such an application must satisfy the
+Commission that:
+(a) the Firm is registered with the PCAOB in accordance with the
+Sarbanes-Oxley Act of 2002, and such registration continues to be effective.  However, if
+registration with the PCAOB is dependent upon reinstatement by the Commission, the
+Commission will consider an application on its other merits;
+(b) the Firm has resolved all disciplinary issues with the PCAOB,
+and has complied with all terms and conditions of any sanctions imposed by the PCAOB (other
+than reinstatement by the Commission); and
+(c) the Firm acknowledges responsibility, as long as the Firm
+appears or practices before the Commission as an independent accountant, to comply with all
+requirements of the Commission and the PCAOB, including, but not limited to, all requirements
+relating to registration, inspections, concurring partner reviews and quality control standards.
+4
+C. The Commission will consider an application by the Firm to resume
+appearing or practicing before the Commission provided that the Firm’s state CPA license is
+current and the Firm has resolved all other disciplinary issues with the applicable state boards of
+accountancy. However, if state licensure is dependent on reinstatement by the Commission, the
+Commission will consider an application on its other merits.  The Commission’s review may
+include consideration of, in addition to the matters referenced above, any other matters relating
+to the Firm’s character, integrity, professional conduct, or qualifications to appear or practice
+before the Commission.
+2. Frederick A. Kaden, CPA
+A. Kaden is censured.
+B. Kaden may practice before the Commission as an independent accountant
+provided that:
+1. The public accounting firm with which he is associated is
+registered with the PCAOB in accordance with the Act, and such registration continues to be
+effective; and
+2. He has submitted to the Commission staff (attention: Office of the
+Chief Accountant) the PCAOB’s letter notifying the public accounting firm with which he is
+associated that its registration application has been approved.
+ By the Commission.
+       N ancy M. Morris
+       S ecretary
+5

raw/aaer/2008/AAER-2771.txt ADDED Viewed

	@@ -0,0 +1,203 @@

+ UNITED STATES OF AMERICA
+ Before the
+SECURITIES AND EXCHANGE COMMISSION
+SECURITIES EXCHANGE ACT OF 1934
+Release No.  57179 / January 22, 2008
+ACCOUNTING AND AUDITING ENFORCEMENT
+Release No.  2771 / January 22, 2008
+ADMINISTRATIVE PROCEEDING
+File No. 3-12792
+In the Matter of
+HALT, BUZAS & POWELL,
+LTD., WAYNE A. POWELL,
+CPA, AND STEVEN R. HALT,
+CPA,
+Respondents.
+ORDER MAKING FINDINGS AND
+IMPOSING REMEDIAL SANCTIONS
+AND A CEASE-AND-DESIST ORDER
+PURSUANT TO SECTIONS 4C AND 21C
+OF THE SECURITIES EXCHANGE ACT
+OF 1934 AND RULE 102(e) OF THE
+COMMISSION’S RULES OF PRACTICE
+I.
+On September 13, 2007, the Securities and Exchange Commission (“Commission”) issued
+an Order Instituting Administrative and Cease-And-Desist Proceedings Pursuant to Sections 4C and
+21C of the Securities Exchange Act of 1934 and Rule 102(e) of the Commission’s Rules of
+Practice, and Notice of Hearing against Halt, Buzas & Powell, Ltd. (“the Firm” or “Halt, Buzas &
+Powell”), Wayne A. Powell, CPA (“Powell”), and Steven R. Halt, CPA (“Halt”).  The Firm,
+Powell, and Halt will be referred to hereafter collectively as “Respondents.”
+II.
+Respondents have submitted an Offer of Settlement (“Offer”) which the Commission has
+determined to accept.  Solely for the purpose of these proceedings and any other proceedings
+brought by or on behalf of the Commission, or to which the Commission is a party, and without
+admitting or denying the findings herein, except as to the Commission’s jurisdiction over them and
+the subject matter of these proceedings, which are admitted, Respondents consent to the entry of
+this Order Making Findings and Imposing Remedial Sanctions and a Cease-and-Desist Order
+Pursuant to Sections 4C and 21C of the Securities Exchange Act of 1934 and Rule 102(e) of the
+Commission’s Rules of Practice (“Order”), as set forth below.
+III.
+On the basis of this Order and Respondents’ Offer, the Commission finds1 that:
+A. RESPONDENTS
+1. The Firm is a Virginia corporation and public accounting firm headquartered in
+Alexandria, Virginia.  The Firm prepared and issued audit reports dated August 11, 2004, and
+October 11, 2004, in connection with its audits of American Utilicraft Corp. (“American
+Utilicraft”).
+2. Powell, 40, of Odenton, Maryland, is a certified public accountant licensed in
+Maryland since 1989.  As engagement partner on the American Utilicraft engagement, Powell
+participated in the preparation and issuance of the August 11, 2004 and October 11, 2004
+American Utilicraft audit reports.
+3. Halt, 55, of Fort Washington, Maryland, is a certified public accountant licensed in
+Virginia since 1976. As concurring partner on the American Utilicraft engagement, Halt
+participated in the preparation and issuance of the August 11, 2004 and October 11, 2004
+American Utilicraft audit reports.
+B. FACTS
+1. American Utilicraft is a Delaware Corporation based in Lawrenceville, Georgia.
+During the relevant period, American Utilicraft’s common stock traded on the Pink Sheets.  Its
+common stock is registered with the Commission pursuant to Section 12(g) of the Securities
+Exchange Act of 1934 (“Exchange Act”).  American Utilicraft reported $286,550 in revenue and
+total assets of $818,233 for its fiscal year ended 2003.
+2. American Utilicraft has at all relevant times been an issuer as defined by the
+Sarbanes-Oxley Act of 2002 (the “Act”).
+3. Although Respondents were aware of the Public Company Accounting Oversight
+Board (“PCAOB”) registration requirements, at no point did the Firm register with the PCAOB as
+a public accounting firm.
+4. The Firm audited the financial statements included in American Utilicraft’s annual
+report for fiscal years 2001, 2002, and 2003 on Forms 10-KSB, filed with the Commission on
+November 3, 2004 (for fiscal years 2001 and 2002) and on December 6, 2004 (for fiscal year
+2003).
+5. The Firm prepared and issued audit reports dated August 11, 2004, and October 11,
+2004, which were included in American Utilicraft’s Forms 10-KSB.
+The findings herein are made pursuant to Respondents’ Offer of Settlement and are not binding on any
+other person or entity in this or any other proceeding.
+2
+1
+6. Powell and Halt participated in auditing the financial statements included in
+American Utilicraft’s annual reports for fiscal years 2001 through 2003 on Forms 10-KSB, filed
+with the Commission on November 3, 2004 (for fiscal years 2001 and 2002) and on December 6,
+2004 (for fiscal year 2003).
+7. Powell and Halt participated in the preparation and issuance of audit reports dated
+August 11, 2004, and October 11, 2004, which were included in American Utilicraft’s Form 10-
+KSB.
+8. Respondents were aware of the registration requirements and the October 22, 2003
+deadline for registration with the PCAOB when the Firm issued the August 11, 2004 and October
+11, 2004 audit reports.
+9. The Firm received $104,797 for conducting an audit of American Utilicraft’s
+financial statements for its fiscal years 2001 through 2003, and for issuing an audit report on those
+financial statements.
+C. VIOLATIONS
+1. Section 4C(a) of the Exchange Act provides, in relevant part, that the Commission
+“may censure any person, or deny, temporarily or permanently, to any person the privilege of
+appearing or practicing before the Commission in any way, if that person is found by the
+Commission … (1)  not to possess the requisite qualifications to represent others … or (3) to ha ve
+willfully violated, or willfully aided and abetted the violation of, any provision of the securities
+laws or the rules and regulations issued thereunder.”
+2. Rule 102(e)(1) of the Commission’s Rules of Practice provides that the
+Commission “may censure a person or deny, temporarily or permanently, the privilege of
+appearing or practicing before it in any way to any person who is found by the Commission ... (i)
+not to possess the requisite qualifications to represent others … or ( iii) to have willfully violated …
+any provision of the Federal securities laws or the rules and regulations thereunder.”
+3. Section 102(a) of the Act provides that “it shall be unlawful for any person that is
+not a registered public accounting firm to prepare or issue, or to participate in the preparation or
+issuance of, any audit report with respect to any issuer.”2
+A violation of the Act or any rule that the PCAOB issues under the Act is treated for all purposes in the
+same manner as a violation of the Exchange Act, including with respect to penalties.  Sarbanes-Oxley Act of 2002,
+15 U.S.C.A. § 7202(b)(1) (West 2002).
+3
+2
+4. The provisions of Section 102(a) of the Act became effective on October 22, 2003.3
+5. Based on the conduct described above, the Firm willfully4 violated Section 102(a)
+of the Act.
+D. FINDI NGS
+1. Based on the foregoing, the Commission finds that the Firm, Powell and Halt did
+not possess the requisite qualifications to represent others.
+2. Based on the foregoing, the Commission finds that the Firm willfully violated
+Section 102(a) of the Sarbanes-Oxley Act of 2002.
+.
+IV.
+In view of the foregoing, the Commission deems it appropriate to impose the sanctions
+agreed to in Respondents’ Offer.
+Accordingly, it is hereby ORDERED, effective immediately, that:
+1. Halt, Buzas & Powell, Ltd.
+A. The Firm shall cease and desist from committing or causing any violations
+and any future violations of Section 102(a) of the Act.
+B. The Firm is denied the privilege of appearing or practicing before the
+Commission as an accountant.
+C. After one year from the date of this Order, the Firm may request that the
+Commission consider its reinstatement by submitting an application (attention: Office of the
+Chief Accountant) to resume appearing or practicing before the Commission as:
+1. a preparer or reviewer, or a person responsible for the preparation or
+review, of any public company’s financial statements that are filed with the Commission.  Such
+an application must satisfy the Commission that the Firm’s work in the Firm’s practice before
+the Commission will be reviewed either by the independent audit committee of the public
+company for which the Firm works or in some other acceptable manner, as long as the Firm
+practices before the Commission in this capacity; and/or
+3 Section 102(a) became effective “[b]eginning 180 days after the date of the determination of the
+Commission under Section 101(d)” of the Act that the PCAOB was prepared to undertake its statutory
+responsibilities.  The Commission made the required determination on April 25, 2003. See Order Regarding Section
+101(d) of the Sarbanes-Oxley Act of 2002, Securities Act of 1933 Release No. 8223, Exchange Act Release No.
+47746, 2003 WL 1956164 (Apr. 25, 2003).
+4 “Willfully” as used in this Order means intentionally committing the act that constitutes the violation.
+There is no requirement that the actor also be aware that he is violating a rule or statute. See Wonsover v. SEC, 205
+F.3d 408, 414 (D.C. Cir. 2000); Tager v. SEC, 344 F.2d 5, 8 (2d Cir. 1965).
+4
+2. an independent accountant.  Such an application must satisfy the
+Commission that:
+(a) the Firm is registered with the PCAOB in accordance with the
+Sarbanes-Oxley Act of 2002, and such registration continues to be effective.  However, if
+registration with the PCAOB is dependent upon reinstatement by the Commission, the
+Commission will consider an application on its other merits;
+(b) the Firm has resolved all disciplinary issues with the PCAOB,
+and has complied with all terms and conditions of any sanctions imposed by the PCAOB (other
+than reinstatement by the Commission); and
+(c) the Firm acknowledges responsibility, as long as the Firm
+appears or practices before the Commission as an independent accountant, to comply with all
+requirements of the Commission and the PCAOB, including, but not limited to, all requirements
+relating to registration, inspections, concurring partner reviews and quality control standards.
+D. The Commission will consider an application by the Firm to resume
+appearing or practicing before the Commission provided that the Firm’s state CPA license is
+current and the Firm has resolved all other disciplinary issues with the applicable state boards of
+accountancy. However, if state licensure is dependent on reinstatement by the Commission, the
+Commission will consider an application on its other merits.  The Commission’s review may
+include consideration of, in addition to the matters referenced above, any other matters relating
+to the Firm’s character, integrity, professional conduct, or qualifications to appear or practice
+before the Commission.
+E. IT IS FURTHER ORDERED that Halt, Buzas & Powell shall, within 21
+days of the entry of this Order, pay disgorgement of $83,837 and prejudgment interest of $17,874
+to the Securities and Exchange Commission.  If timely payment is not made, additional interest
+shall accrue pursuant to SEC Rule of Practice 600.  Payment shall be: (A) made by United States
+postal money order, certified check, bank cashier’s check or bank money order; (B) made payable
+to the Securities and Exchange Commission; (C) hand-delivered or mailed to the Office of
+Financial Management, Securities and Exchange Commission, Operations Center, 6432 General
+Green Way, Stop 0-3, Alexandria, VA 22312; and (D) submitted under cover letter that identifies
+Halt, Buzas & Powell as a Respondent in these proceedings, the file number of these proceedings,
+a copy of which cover letter and money order or check shall be sent to Christopher Conte, Division
+of Enforcement, Securities and Exchange Commission, 100 F Street N.E., Washington, D.C.
+20549-4631.
+5
+2. Wayne A. Powell, CPA
+A. Powell is censured.
+B. Powell may practice before the Commission as an independent accountant
+provided that:
+1. The public accounting firm with which he is associated is
+registered with the PCAOB in accordance with the Act, and such registration continues to be
+effective; and
+2. He has submitted to the Commission staff (Attention: Office of the
+Chief Accountant) the PCAOB’s letter notifying the public accounting firm with which he is
+associated that its registration application has been approved.
+3. Steven R. Halt, CPA
+A. Halt is censured.
+B. Halt may practice before the Commission as an independent accountant
+provided that:
+1. The public accounting firm with which he is associated is registered
+with the PCAOB in accordance with the Act, and such registration continues to be effective; and
+2. He has submitted to the Commission staff (Attention: Office of the
+Chief Accountant) the PCAOB’s letter notifying the public accounting firm with which he is
+associated that its registration application has been approved.
+ By the Commission.
+       N ancy M. Morris
+       S ecretary
+6

raw/aaer/2008/AAER-2773.txt ADDED Viewed

	@@ -0,0 +1,1369 @@

+     SEC.gov | Michael K. Openshaw
+         !function(){var e=navigator.userAgent,a=document.documentElement,n=a.className;n=n.replace("no-js","js"),/iPad|iPhone|iPod/.test(e)&&!window.MSStream&&(n+=" ua-ios"),a.className=n}();
+     {"path":{"baseUrl":"\/","pathPrefix":"","currentPath":"node\/502761","currentPathIsAdmin":false,"isFront":false,"currentLanguage":"en"},"pluralDelimiter":"\u0003","suppressDeprecationErrors":true,"gtag":{"tagId":"","consentMode":false,"otherIds":[],"events":[],"additionalConfigInfo":[]},"ajaxPageState":{"libraries":"eJxdT0GOwzAI_JBdn_oei2DkeINNZLC22devlaZS2wtiBhhmcKNUTPo97jxyaXEH3GJpiZrFhQW38A4cMqgeYQGlV19JFTKpQ-kUmvQKXP7I0cO4tC2kPnbg2wVdFslM0SCHPMs3vsEPPD7J6hgOGdPCKJyoRxxqUuePHjLLAuzVjimenRJGSLW08NoBK9LUn6SHlrytVOlcpJShB63QLSpBx_WkOzHNePol4fRQo_qMPvQ36ZXsAmd99lMNr2t_GUR9n60EyX9a_wePd5ns","theme":"uswds_sec","theme_token":null},"ajaxTrustedUrl":[],"gtm":{"tagId":null,"settings":{"data_layer":"dataLayer","include_classes":false,"allowlist_classes":"","blocklist_classes":"","include_environment":false,"environment_id":"","environment_token":""},"tagIds":["GTM-TD3BKV"]},"data":{"extlink":{"extTarget":false,"extTargetAppendNewWindowDisplay":true,"extTargetAppendNewWindowLabel":"(opens in a new window)","extTargetNoOverride":false,"extNofollow":false,"extTitleNoOverride":false,"extNoreferrer":false,"extFollowNoOverride":false,"extClass":"0","extLabel":"(link is external)","extImgClass":false,"extSubdomains":true,"extExclude":".*\\.gov|http:\/\/www.xbrl.org\/utr\/2013-05-17\/utr.xml|http:\/\/www.xbrl.org\/dtr\/type\/numeric-2009-12-16.xsd|http:\/\/www.xbrl.org\/dtr\/type\/nonNumeric-2009-12-16.xsd|https:\/\/secir.secure.force.com\/ombudsman\/OMMSForm","extInclude":"","extCssExclude":".data-exempt","extCssInclude":"","extCssExplicit":"","extAlert":true,"extAlertText":"You are now leaving the SEC Website. The link you have selected is located on another server. Please click on the OK button below to proceed to the selected site. The SEC does not endorse this web site, its sponsor, or any of the policies, activities, products, or services offered on the site or by any advertiser on the site.","extHideIcons":false,"mailtoClass":"0","telClass":"","mailtoLabel":"(link sends email)","telLabel":"(link is a phone number)","extUseFontAwesome":false,"extIconPlacement":"append","extPreventOrphan":false,"extFaLinkClasses":"fa fa-external-link","extFaMailtoClasses":"fa fa-envelope-o","extAdditionalLinkClasses":"","extAdditionalMailtoClasses":"","extAdditionalTelClasses":"","extFaTelClasses":"fa fa-phone","allowedDomains":null,"extExcludeNoreferrer":""}},"user":{"uid":0,"permissionsHash":"e506dfd1572f94bd1f339f1a7483bfbded31d4a9d2bdfdca3fdbc235153380ee"}}
+      Skip to search field
+      Skip to main content
+           An official website of the United States government
+           Here’s how you know
+           Here’s how you know
+                Official websites use .gov
+                              A  .gov  website belongs to an official government organization in the United States.
+                Secure .gov websites use HTTPS
+              A  lock
+              (   Lock  A locked padlock    )
+              or  https://  means you’ve safely connected to the .gov website. Share sensitive information only on official, secure websites.
+                     SEC homepage
+        Menu
+          Close
+     Search SEC.gov &amp; EDGAR
+       Search
+             Search Filings
+           Search Filings
+                             Full Text Search
+                             Latest Filings
+                             Mutual Fund Search
+                             Variable Insurance Products Search
+                             SIC Codes
+                             CIK Lookup
+                             Public Dissemination Service (PDS)
+                             Search Assistance
+             Submit Filings
+           Submit Filings
+                             EDGAR Filer Management Portal
+                             EDGAR Filing Portal
+                             Online Forms Management Portal
+                             EDGAR Next
+                             Forms Index
+                             Filer Support &amp; Resources
+             Data &amp; Research
+           Data &amp; Research
+                             Data Library
+                             Statistics &amp; Data Visualizations
+                             Structured Data
+                             Investment Management Data
+                             Open Data at the SEC
+             Rules, Enforcement, &amp; Compliance
+           Rules &amp; Regulations
+                             Rulemaking Activity
+                             Submit Public Comments
+                             Staff Guidance
+                             No-Action, Interpretive, and Exemptive Letters
+                             Self-Regulatory Organization Rulemaking
+                             Public Petitions for Rulemaking
+           Enforcement &amp; Litigation
+                             Litigation Releases
+                             Administrative Proceedings
+                             Administrative Law Judge Orders and Initial Decisions
+                             Trading Suspensions
+                             Distributions to Harmed Investors
+                             Receiverships
+           Compliance
+                             Examination Priorities
+                             Risk Alerts
+                             Compliance Outreach Program
+                             Proposed Rules
+                             What&#039;s New
+                             Whistleblower Program
+             Featured Topics
+           Featured Topics
+                             Crypto Task Force
+                             Cybersecurity
+                             Market Structure Analytics
+                             Saving and Investing for Military Personnel
+                             Saving and Investing for Teachers
+                             SEC-CFTC Harmonization Initiative
+                             Treasury Clearing Implementation
+             About
+           About
+                             Mission
+                             Commissioners
+                             Divisions &amp; Offices
+                             Division &amp; Office Directors
+                             Advisory Committees
+                             Budget &amp; Performance
+                             Reports &amp; Publications
+                             Commission Votes
+                             Contact the SEC
+                             Careers
+                             Submit a Tip or Complaint
+                           Newsroom
+                           |
+                           Investors
+                           Small Businesses
+                           Whistleblowers
+                           Newsroom
+                           |
+                           Investors
+                           Small Businesses
+                           Whistleblowers
+     Search SEC.gov &amp; EDGAR
+       Search
+        More in this Section
+                 Enforcement &amp; Litigation
+           Litigation Releases
+           Administrative Proceedings
+           Administrative Law Judge Orders and Initial Decisions
+           Trading Suspensions
+           Distributions to Harmed Investors
+           Receiverships
+           Electronic Filings in Administrative Proceedings (eFAP)
+           Rules of Practice
+           Applications for Reentry
+           Reports of Investigations
+           Whistleblower Program
+           Public Alert: Unregistered Soliciting Entities (PAUSE)
+           SEC Action Lookup - Individuals (SALI)
+           Enforcement Data Delivery Standards
+           Small Businesses
+           Appellate Briefs
+           Amicus / Friend of the Court Briefs
+                 Enforcement &amp; Litigation
+           Litigation Releases
+           Administrative Proceedings
+           Administrative Law Judge Orders and Initial Decisions
+           Trading Suspensions
+           Distributions to Harmed Investors
+           Receiverships
+           Electronic Filings in Administrative Proceedings (eFAP)
+           Rules of Practice
+           Applications for Reentry
+           Reports of Investigations
+           Whistleblower Program
+           Public Alert: Unregistered Soliciting Entities (PAUSE)
+           SEC Action Lookup - Individuals (SALI)
+           Enforcement Data Delivery Standards
+           Small Businesses
+           Appellate Briefs
+           Amicus / Friend of the Court Briefs
+               Home
+               Enforcement and Litigation
+               Litigation Releases
+              Michael K. Openshaw
+        Michael K. Openshaw
+                   U.S. SECURITIES AND EXCHANGE COMMISSION
+ Litigation Release No. 20440 / January 25, 2008
+ Accounting and Auditing Enforcement Release No. 2773 / January 25, 2008
+  SEC v. Michael K. Openshaw , United States District Court for the District of Utah (Civil Action No. 2:07cv0977) (December 17, 2007)
+ The Securities and Exchange Commission announced that on January 23, 2008, the United States District Court for the District of Utah entered a Final Judgment against Michael K. Openshaw for violating Sections 10(b) and 13(b)(5) of the Securities Exchange Act of 1934 and Rules 10b-5, 13a-14, 13b2-1 and 13b2-2 thereunder, and for aiding and abetting violations of Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Rules 12b-20, 13a-1, and 13a-13 thereunder.
+ The Complaint alleged that from September through December of 2004, Openshaw, who was then CFO of Q Comm International, a Utah corporation, completed five unauthorized bank wires, transferring a total of $1,525,000 to a Q Comm vendor. It is alleged that Openshaw wired these funds without approval and without disclosing the transfers to the other members of Q Comm's management or its auditors. The Complaint also alleged that Openshaw concealed the transfers through improper accounting entries and by altering documents. The Complaint further alleged that Openshaw's acts caused Q Comm's financial statements for the year ended December 31, 2004 and the quarter ended March 31, 2005 to be materially misleading and to deviate from Generally Accepted Accounting Principles. Finally, the Complaint alleged that Openshaw falsely certified Q Comm's annual report for the year ended December 31, 2004.
+ Openshaw consented to the entry of the final judgment without admitting or denying the allegations in the Complaint. The final judgment permanently enjoined Openshaw from future violations of Sections 10(b) and 13(b)(5) of the Exchange Act and Rules 10b-5, 13a-14, 13b2-1 and 13b2-2 thereunder, and from aiding and abetting violations of Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Rules 12b-20, 13a-1, and 13a-13 thereunder and barring him from serving as an officer or director of a publicly-held company.
+           Return to top
+                 SEC homepage
+                                                     About the SEC
+           Budget &amp; Performance
+           Careers
+           Commission Votes
+           Contact
+           Contracts
+                                                     Transparency
+           Accessibility &amp; Disability
+           Super Intelligence
+           FOIA
+           Inspector General
+           No FEAR Act Data
+           Ombuds
+           SEC Excess Personal Property Guidance
+                                                     Websites
+           Investor.gov
+           Related Sites
+           USA.gov
+                                                     Site Information
+           Plain Writing
+           Privacy &amp; Security
+           Site Map
+               Stay connected. Sign up for email updates.
+   Your email address
+   Sign Up
+                 X
+                 Facebook
+               Instagram
+                 RSS
+                 YouTube
+               Email Updates

raw/aaer/2008/AAER-2780.txt ADDED Viewed

	@@ -0,0 +1,1372 @@

+     SEC.gov | James Charles Blue, Randy Cook, and Victor Campbell
+         !function(){var e=navigator.userAgent,a=document.documentElement,n=a.className;n=n.replace("no-js","js"),/iPad|iPhone|iPod/.test(e)&&!window.MSStream&&(n+=" ua-ios"),a.className=n}();
+     {"path":{"baseUrl":"\/","pathPrefix":"","currentPath":"node\/502791","currentPathIsAdmin":false,"isFront":false,"currentLanguage":"en"},"pluralDelimiter":"\u0003","suppressDeprecationErrors":true,"gtag":{"tagId":"","consentMode":false,"otherIds":[],"events":[],"additionalConfigInfo":[]},"ajaxPageState":{"libraries":"eJxdT0GOwzAI_JBdn_oei2DkeINNZLC22devlaZS2wtiBhhmcKNUTPo97jxyaXEH3GJpiZrFhQW38A4cMqgeYQGlV19JFTKpQ-kUmvQKXP7I0cO4tC2kPnbg2wVdFslM0SCHPMs3vsEPPD7J6hgOGdPCKJyoRxxqUuePHjLLAuzVjimenRJGSLW08NoBK9LUn6SHlrytVOlcpJShB63QLSpBx_WkOzHNePol4fRQo_qMPvQ36ZXsAmd99lMNr2t_GUR9n60EyX9a_wePd5ns","theme":"uswds_sec","theme_token":null},"ajaxTrustedUrl":[],"gtm":{"tagId":null,"settings":{"data_layer":"dataLayer","include_classes":false,"allowlist_classes":"","blocklist_classes":"","include_environment":false,"environment_id":"","environment_token":""},"tagIds":["GTM-TD3BKV"]},"data":{"extlink":{"extTarget":false,"extTargetAppendNewWindowDisplay":true,"extTargetAppendNewWindowLabel":"(opens in a new window)","extTargetNoOverride":false,"extNofollow":false,"extTitleNoOverride":false,"extNoreferrer":false,"extFollowNoOverride":false,"extClass":"0","extLabel":"(link is external)","extImgClass":false,"extSubdomains":true,"extExclude":".*\\.gov|http:\/\/www.xbrl.org\/utr\/2013-05-17\/utr.xml|http:\/\/www.xbrl.org\/dtr\/type\/numeric-2009-12-16.xsd|http:\/\/www.xbrl.org\/dtr\/type\/nonNumeric-2009-12-16.xsd|https:\/\/secir.secure.force.com\/ombudsman\/OMMSForm","extInclude":"","extCssExclude":".data-exempt","extCssInclude":"","extCssExplicit":"","extAlert":true,"extAlertText":"You are now leaving the SEC Website. The link you have selected is located on another server. Please click on the OK button below to proceed to the selected site. The SEC does not endorse this web site, its sponsor, or any of the policies, activities, products, or services offered on the site or by any advertiser on the site.","extHideIcons":false,"mailtoClass":"0","telClass":"","mailtoLabel":"(link sends email)","telLabel":"(link is a phone number)","extUseFontAwesome":false,"extIconPlacement":"append","extPreventOrphan":false,"extFaLinkClasses":"fa fa-external-link","extFaMailtoClasses":"fa fa-envelope-o","extAdditionalLinkClasses":"","extAdditionalMailtoClasses":"","extAdditionalTelClasses":"","extFaTelClasses":"fa fa-phone","allowedDomains":null,"extExcludeNoreferrer":""}},"user":{"uid":0,"permissionsHash":"e506dfd1572f94bd1f339f1a7483bfbded31d4a9d2bdfdca3fdbc235153380ee"}}
+      Skip to search field
+      Skip to main content
+           An official website of the United States government
+           Here’s how you know
+           Here’s how you know
+                Official websites use .gov
+                              A  .gov  website belongs to an official government organization in the United States.
+                Secure .gov websites use HTTPS
+              A  lock
+              (   Lock  A locked padlock    )
+              or  https://  means you’ve safely connected to the .gov website. Share sensitive information only on official, secure websites.
+                     SEC homepage
+        Menu
+          Close
+     Search SEC.gov &amp; EDGAR
+       Search
+             Search Filings
+           Search Filings
+                             Full Text Search
+                             Latest Filings
+                             Mutual Fund Search
+                             Variable Insurance Products Search
+                             SIC Codes
+                             CIK Lookup
+                             Public Dissemination Service (PDS)
+                             Search Assistance
+             Submit Filings
+           Submit Filings
+                             EDGAR Filer Management Portal
+                             EDGAR Filing Portal
+                             Online Forms Management Portal
+                             EDGAR Next
+                             Forms Index
+                             Filer Support &amp; Resources
+             Data &amp; Research
+           Data &amp; Research
+                             Data Library
+                             Statistics &amp; Data Visualizations
+                             Structured Data
+                             Investment Management Data
+                             Open Data at the SEC
+             Rules, Enforcement, &amp; Compliance
+           Rules &amp; Regulations
+                             Rulemaking Activity
+                             Submit Public Comments
+                             Staff Guidance
+                             No-Action, Interpretive, and Exemptive Letters
+                             Self-Regulatory Organization Rulemaking
+                             Public Petitions for Rulemaking
+           Enforcement &amp; Litigation
+                             Litigation Releases
+                             Administrative Proceedings
+                             Administrative Law Judge Orders and Initial Decisions
+                             Trading Suspensions
+                             Distributions to Harmed Investors
+                             Receiverships
+           Compliance
+                             Examination Priorities
+                             Risk Alerts
+                             Compliance Outreach Program
+                             Proposed Rules
+                             What&#039;s New
+                             Whistleblower Program
+             Featured Topics
+           Featured Topics
+                             Crypto Task Force
+                             Cybersecurity
+                             Market Structure Analytics
+                             Saving and Investing for Military Personnel
+                             Saving and Investing for Teachers
+                             SEC-CFTC Harmonization Initiative
+                             Treasury Clearing Implementation
+             About
+           About
+                             Mission
+                             Commissioners
+                             Divisions &amp; Offices
+                             Division &amp; Office Directors
+                             Advisory Committees
+                             Budget &amp; Performance
+                             Reports &amp; Publications
+                             Commission Votes
+                             Contact the SEC
+                             Careers
+                             Submit a Tip or Complaint
+                           Newsroom
+                           |
+                           Investors
+                           Small Businesses
+                           Whistleblowers
+                           Newsroom
+                           |
+                           Investors
+                           Small Businesses
+                           Whistleblowers
+     Search SEC.gov &amp; EDGAR
+       Search
+        More in this Section
+                 Enforcement &amp; Litigation
+           Litigation Releases
+           Administrative Proceedings
+           Administrative Law Judge Orders and Initial Decisions
+           Trading Suspensions
+           Distributions to Harmed Investors
+           Receiverships
+           Electronic Filings in Administrative Proceedings (eFAP)
+           Rules of Practice
+           Applications for Reentry
+           Reports of Investigations
+           Whistleblower Program
+           Public Alert: Unregistered Soliciting Entities (PAUSE)
+           SEC Action Lookup - Individuals (SALI)
+           Enforcement Data Delivery Standards
+           Small Businesses
+           Appellate Briefs
+           Amicus / Friend of the Court Briefs
+                 Enforcement &amp; Litigation
+           Litigation Releases
+           Administrative Proceedings
+           Administrative Law Judge Orders and Initial Decisions
+           Trading Suspensions
+           Distributions to Harmed Investors
+           Receiverships
+           Electronic Filings in Administrative Proceedings (eFAP)
+           Rules of Practice
+           Applications for Reentry
+           Reports of Investigations
+           Whistleblower Program
+           Public Alert: Unregistered Soliciting Entities (PAUSE)
+           SEC Action Lookup - Individuals (SALI)
+           Enforcement Data Delivery Standards
+           Small Businesses
+           Appellate Briefs
+           Amicus / Friend of the Court Briefs
+               Home
+               Enforcement and Litigation
+               Litigation Releases
+              James Charles Blue, Randy Cook, and Victor Campbell
+        James Charles Blue, Randy Cook, and Victor Campbell
+                   U.S. SECURITIES AND EXCHANGE COMMISSION
+ Litigation Release No. 20446 / February 1, 2008
+ Accounting and Auditing Enforcement Release No. 2780 / February 1, 2008
+  United States Securities and Exchange Commission v. James Charles Blue, Randy Cook, and Victor Campbell , 07-cv-00095-REB-MEH (D. Colo. filed January 16, 2007)
+ RANDY COOK, FORMER PRESIDENT OF UNITED AGRI PRODUCTS NORTH AMERICAN OPERATIONS, SETTLES SEC LITIGATION BY CONSENTING TO A PERMANENT INJUNCTION AND AGREEING TO PAY $367,429.64 IN DISGORGEMENT AND PENALTIES
+ The U.S. Securities and Exchange Commission (Commission) today announced that, on February 1, 2008, the Commission filed a Consent and proposed settled Final Judgment against Randy Cook, former President of North American Operations of United Agri Products ("UAP"), in  United States Securities and Exchange Commission v. James Charles Blue, Randy Cook, and Victor Campbell , 07-cv-00095-REB-MEH (D. Colo. filed Jan. 16, 2007).
+ The Commission's Complaint in this case alleged that Cook and his co-defendants, former UAP executives James Charles Blue and Victor Campbell, engaged in misconduct at UAP, a former subsidiary of ConAgra Foods, Inc., which resulted in the overstatement of UAP's operating results in 1999 and 2000.  Specifically, the Complaint alleged that Cook participated in improper accounting practices at UAP, including: (1) the improper recognition of revenue from deferred delivery sales and associated rebates from UAP's suppliers; (2) the failure to record bad debt expenses when realized; and (3) the improper recognition of revenue from advance vendor rebates.  As alleged, Cook's misconduct caused ConAgra, UAP's parent, to file materially false and misleading financial statements with the Commission in the company's annual reports for 1999 and 2000.  According to the Complaint, Cook obtained inflated bonus and other profit-based compensation as a result of his misconduct.
+ Cook, without admitting or denying the allegations in the Commission's Complaint, consented to the entry of a Final Judgment which would order Cook to pay $191,635 in disgorgement and pre-judgment interest thereon in the amount of $140,794.64, together with a civil money penalty in the amount of $35,000.  The proposed Final Judgment also will permanently enjoin him from violating the internal controls and books and records provisions of the federal securities laws (Sections 13(b)(5) of the Securities Exchange Act of 1934 (Exchange Act) and Exchange Act Rule 13b2-1), and from aiding and abetting violations of the reporting, books and records, and internal controls provisions of the Exchange Act (Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Exchange Act Rules 12b-20 and 13a-1).  The SEC has moved to dismiss with prejudice the charges against Cook for violating and aiding and abetting violations of Exchange Act Section 10(b) and Rule 10b-5 contingent on entry of the Final Judgment and Cook's compliance with its terms and conditions.  The settlement is subject to the Court's approval.
+ Cook's co-defendants, James Charles Blue, the former President and Chief Operating Officer of ConAgra Agri Products Companies, and Victor Campbell, UAP's former Controller, previously agreed to settle the Commission's action without admitting or denying the allegations in the Complaint, and final judgments were entered as to them on January 17, 2007.
+  See also   Litigation Release No. 19969  (January 17, 2007).
+           Return to top
+                 SEC homepage
+                                                     About the SEC
+           Budget &amp; Performance
+           Careers
+           Commission Votes
+           Contact
+           Contracts
+                                                     Transparency
+           Accessibility &amp; Disability
+           Super Intelligence
+           FOIA
+           Inspector General
+           No FEAR Act Data
+           Ombuds
+           SEC Excess Personal Property Guidance
+                                                     Websites
+           Investor.gov
+           Related Sites
+           USA.gov
+                                                     Site Information
+           Plain Writing
+           Privacy &amp; Security
+           Site Map
+               Stay connected. Sign up for email updates.
+   Your email address
+   Sign Up
+                 X
+                 Facebook
+               Instagram
+                 RSS
+                 YouTube
+               Email Updates

raw/aaer/2008/AAER-2781.txt ADDED Viewed

	@@ -0,0 +1,1383 @@

+     SEC.gov | Stephen P. Gardner, et al.
+         !function(){var e=navigator.userAgent,a=document.documentElement,n=a.className;n=n.replace("no-js","js"),/iPad|iPhone|iPod/.test(e)&&!window.MSStream&&(n+=" ua-ios"),a.className=n}();
+     {"path":{"baseUrl":"\/","pathPrefix":"","currentPath":"node\/502806","currentPathIsAdmin":false,"isFront":false,"currentLanguage":"en"},"pluralDelimiter":"\u0003","suppressDeprecationErrors":true,"gtag":{"tagId":"","consentMode":false,"otherIds":[],"events":[],"additionalConfigInfo":[]},"ajaxPageState":{"libraries":"eJxdT0GOwzAI_JBdn_oei2DkeINNZLC22devlaZS2wtiBhhmcKNUTPo97jxyaXEH3GJpiZrFhQW38A4cMqgeYQGlV19JFTKpQ-kUmvQKXP7I0cO4tC2kPnbg2wVdFslM0SCHPMs3vsEPPD7J6hgOGdPCKJyoRxxqUuePHjLLAuzVjimenRJGSLW08NoBK9LUn6SHlrytVOlcpJShB63QLSpBx_WkOzHNePol4fRQo_qMPvQ36ZXsAmd99lMNr2t_GUR9n60EyX9a_wePd5ns","theme":"uswds_sec","theme_token":null},"ajaxTrustedUrl":[],"gtm":{"tagId":null,"settings":{"data_layer":"dataLayer","include_classes":false,"allowlist_classes":"","blocklist_classes":"","include_environment":false,"environment_id":"","environment_token":""},"tagIds":["GTM-TD3BKV"]},"data":{"extlink":{"extTarget":false,"extTargetAppendNewWindowDisplay":true,"extTargetAppendNewWindowLabel":"(opens in a new window)","extTargetNoOverride":false,"extNofollow":false,"extTitleNoOverride":false,"extNoreferrer":false,"extFollowNoOverride":false,"extClass":"0","extLabel":"(link is external)","extImgClass":false,"extSubdomains":true,"extExclude":".*\\.gov|http:\/\/www.xbrl.org\/utr\/2013-05-17\/utr.xml|http:\/\/www.xbrl.org\/dtr\/type\/numeric-2009-12-16.xsd|http:\/\/www.xbrl.org\/dtr\/type\/nonNumeric-2009-12-16.xsd|https:\/\/secir.secure.force.com\/ombudsman\/OMMSForm","extInclude":"","extCssExclude":".data-exempt","extCssInclude":"","extCssExplicit":"","extAlert":true,"extAlertText":"You are now leaving the SEC Website. The link you have selected is located on another server. Please click on the OK button below to proceed to the selected site. The SEC does not endorse this web site, its sponsor, or any of the policies, activities, products, or services offered on the site or by any advertiser on the site.","extHideIcons":false,"mailtoClass":"0","telClass":"","mailtoLabel":"(link sends email)","telLabel":"(link is a phone number)","extUseFontAwesome":false,"extIconPlacement":"append","extPreventOrphan":false,"extFaLinkClasses":"fa fa-external-link","extFaMailtoClasses":"fa fa-envelope-o","extAdditionalLinkClasses":"","extAdditionalMailtoClasses":"","extAdditionalTelClasses":"","extFaTelClasses":"fa fa-phone","allowedDomains":null,"extExcludeNoreferrer":""}},"user":{"uid":0,"permissionsHash":"e506dfd1572f94bd1f339f1a7483bfbded31d4a9d2bdfdca3fdbc235153380ee"}}
+      Skip to search field
+      Skip to main content
+           An official website of the United States government
+           Here’s how you know
+           Here’s how you know
+                Official websites use .gov
+                              A  .gov  website belongs to an official government organization in the United States.
+                Secure .gov websites use HTTPS
+              A  lock
+              (   Lock  A locked padlock    )
+              or  https://  means you’ve safely connected to the .gov website. Share sensitive information only on official, secure websites.
+                     SEC homepage
+        Menu
+          Close
+     Search SEC.gov &amp; EDGAR
+       Search
+             Search Filings
+           Search Filings
+                             Full Text Search
+                             Latest Filings
+                             Mutual Fund Search
+                             Variable Insurance Products Search
+                             SIC Codes
+                             CIK Lookup
+                             Public Dissemination Service (PDS)
+                             Search Assistance
+             Submit Filings
+           Submit Filings
+                             EDGAR Filer Management Portal
+                             EDGAR Filing Portal
+                             Online Forms Management Portal
+                             EDGAR Next
+                             Forms Index
+                             Filer Support &amp; Resources
+             Data &amp; Research
+           Data &amp; Research
+                             Data Library
+                             Statistics &amp; Data Visualizations
+                             Structured Data
+                             Investment Management Data
+                             Open Data at the SEC
+             Rules, Enforcement, &amp; Compliance
+           Rules &amp; Regulations
+                             Rulemaking Activity
+                             Submit Public Comments
+                             Staff Guidance
+                             No-Action, Interpretive, and Exemptive Letters
+                             Self-Regulatory Organization Rulemaking
+                             Public Petitions for Rulemaking
+           Enforcement &amp; Litigation
+                             Litigation Releases
+                             Administrative Proceedings
+                             Administrative Law Judge Orders and Initial Decisions
+                             Trading Suspensions
+                             Distributions to Harmed Investors
+                             Receiverships
+           Compliance
+                             Examination Priorities
+                             Risk Alerts
+                             Compliance Outreach Program
+                             Proposed Rules
+                             What&#039;s New
+                             Whistleblower Program
+             Featured Topics
+           Featured Topics
+                             Crypto Task Force
+                             Cybersecurity
+                             Market Structure Analytics
+                             Saving and Investing for Military Personnel
+                             Saving and Investing for Teachers
+                             SEC-CFTC Harmonization Initiative
+                             Treasury Clearing Implementation
+             About
+           About
+                             Mission
+                             Commissioners
+                             Divisions &amp; Offices
+                             Division &amp; Office Directors
+                             Advisory Committees
+                             Budget &amp; Performance
+                             Reports &amp; Publications
+                             Commission Votes
+                             Contact the SEC
+                             Careers
+                             Submit a Tip or Complaint
+                           Newsroom
+                           |
+                           Investors
+                           Small Businesses
+                           Whistleblowers
+                           Newsroom
+                           |
+                           Investors
+                           Small Businesses
+                           Whistleblowers
+     Search SEC.gov &amp; EDGAR
+       Search
+        More in this Section
+                 Enforcement &amp; Litigation
+           Litigation Releases
+           Administrative Proceedings
+           Administrative Law Judge Orders and Initial Decisions
+           Trading Suspensions
+           Distributions to Harmed Investors
+           Receiverships
+           Electronic Filings in Administrative Proceedings (eFAP)
+           Rules of Practice
+           Applications for Reentry
+           Reports of Investigations
+           Whistleblower Program
+           Public Alert: Unregistered Soliciting Entities (PAUSE)
+           SEC Action Lookup - Individuals (SALI)
+           Enforcement Data Delivery Standards
+           Small Businesses
+           Appellate Briefs
+           Amicus / Friend of the Court Briefs
+                 Enforcement &amp; Litigation
+           Litigation Releases
+           Administrative Proceedings
+           Administrative Law Judge Orders and Initial Decisions
+           Trading Suspensions
+           Distributions to Harmed Investors
+           Receiverships
+           Electronic Filings in Administrative Proceedings (eFAP)
+           Rules of Practice
+           Applications for Reentry
+           Reports of Investigations
+           Whistleblower Program
+           Public Alert: Unregistered Soliciting Entities (PAUSE)
+           SEC Action Lookup - Individuals (SALI)
+           Enforcement Data Delivery Standards
+           Small Businesses
+           Appellate Briefs
+           Amicus / Friend of the Court Briefs
+               Home
+               Enforcement and Litigation
+               Litigation Releases
+              Stephen P. Gardner, et al.
+        Stephen P. Gardner, et al.
+                   U.S. SECURITIES AND EXCHANGE COMMISSION
+ Litigation Release No. 20449 / February 6, 2008
+ Accounting and Auditing Enforcement Release No. 2781 / February 6, 2008
+  Securities and Exchange Commission v.  Stephen P. Gardner, et al. , Civil Action No. 04 CV 2002 JAH (RBB) (S.D. Cal.)  (October 5, 2004)
+ Former KPMG Consulting Principal Settles SEC Charges for Role in Peregrine Accounting Fraud
+ The Securities and Exchange Commission today filed a settled enforcement action against a former principal and managing director of KPMG Consulting LLC for his role in deceiving investors in a major corporate accounting fraud.
+ Larry A. Rodda was charged by the SEC in 2004 with aiding and abetting a massive financial fraud orchestrated by senior officers at Peregrine Systems, Inc., a San Diego software company that has since been acquired by Hewlett-Packard Company.  According to the SEC's complaint, Rodda knowingly signed four sham software license agreements that allowed Peregrine to improperly record approximately $22 million in revenue.  Rodda has agreed to pay an $80,000 financial penalty to settle the SEC's charges.
+ According to the SEC's complaint, Rodda and eight other defendants fraudulently inflated the product revenues Peregrine reported in SEC filings and elsewhere from its fiscal year 2000 through the third quarter of its fiscal year 2002.  In February 2003, Peregrine restated its financial results for 11 quarters, reducing previously reported revenue of $1.34 billion by more than $507 million.
+ The sham software license agreements signed by Rodda made it appear that Peregrine had actually sold software to end-users through Rodda's employer, KPMG Consulting.  In fact, based on oral side agreements with a Peregrine executive, Rodda knew that his firm would have no payment obligation on the software license agreements.  The Commission also alleges that Rodda helped Peregrine conceal the true nature of one of these agreements from Peregrine's auditors at Arthur Andersen when he signed a false audit confirmation.
+ Rodda pleaded guilty in November 2004 to criminal charges brought by the U.S. Attorney's Office for the Southern District of California.  He pleaded guilty to one count of conspiracy to commit securities fraud, wire fraud, bank fraud and falsification of the books, records and accounts of a public corporation.  On January 23, 2008, Rodda was sentenced to six months in the custody of the Bureau of Prisons, six months of home detention, and two years of supervised release.  He was ordered to pay a $100 mandatory special assessment.  Twelve other individuals - including Peregrine's former CEO and CFO - have pleaded guilty in the ongoing criminal case.
+ Without admitting or denying the SEC's allegations, Rodda agreed to be enjoined from violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, in addition to paying the financial penalty.  The settlement is subject to the approval of the U.S. District Court for the Southern District of California.
+ The Commission acknowledges the assistance of the U.S. Attorney's Office for the Southern District of California and the FBI.
+ Additional materials:   Litigation Release No. 18919 .
+ SEC Complaint in this matter  -->
+ &nbsp;
+           Return to top
+                 SEC homepage
+                                                     About the SEC
+           Budget &amp; Performance
+           Careers
+           Commission Votes
+           Contact
+           Contracts
+                                                     Transparency
+           Accessibility &amp; Disability
+           Super Intelligence
+           FOIA
+           Inspector General
+           No FEAR Act Data
+           Ombuds
+           SEC Excess Personal Property Guidance
+                                                     Websites
+           Investor.gov
+           Related Sites
+           USA.gov
+                                                     Site Information
+           Plain Writing
+           Privacy &amp; Security
+           Site Map
+               Stay connected. Sign up for email updates.
+   Your email address
+   Sign Up
+                 X
+                 Facebook
+               Instagram
+                 RSS
+                 YouTube
+               Email Updates

raw/aaer/2008/AAER-2782.txt ADDED Viewed

	@@ -0,0 +1,105 @@

+ UNITED STATES OF AMERICA
+ before the
+SECURITIES AND EXCHANGE COMMISSION
+SECURITIES EXCHANGE ACT OF 1934
+Release No. 57282 / February 6, 2008
+ACCOUNTING AND AUDITING ENFORCEMENT
+Release No. 2782 / February 6, 2008
+ADMINISTRATIVE PROCEEDING
+File No. 3-12949
+:
+:
+:
+In the Matter of : ORDER INSTITUTING ADMINISTRATIVE
+: PROCEEDINGS PURSUANT TO RULE
+WILLIAM PATRICK : 102(e) OF THE COMMISSION’S RULES OF
+ BORCHARD (CPA), : PRACTICE, MAKING FINDINGS, AND
+: IMPOSING REMEDIAL SANCTIONS
+ Res pondent. :
+:
+____________________________________ :
+I.
+The Securities and Exchange Commission (“Commission”) deems it appropriate and in the
+public interest that public administrative proceedings be, and hereby are, instituted against William
+Patrick Borchard (“Respondent” or “Borchard”) pursuant to Rule 102(e)(3)(i) of the Commission’s
+Rules of Practice.1
+II.
+In anticipation of the institution of these proceedings, Respondent has submitted an Offer
+of Settlement (the “Offer”) which the Commission has determined to accept.  Solely for the
+purpose of these proceedings and any other proceedings brought by or on behalf of the
+1 Rule 102(e)(3)(i) provides, in relevant part, that:
+The Commission, with due regard to the public interest and without preliminary hearing,
+may, by order, . . . suspend from appearing or practicing before it any . . . accountant . . . who has
+been by name . . . permanently enjoined by any court of competent jurisdiction, by reason of his
+or her misconduct in an action brought by the Commission, from violating or aiding and abetting
+the violation of any provision of the Federal securities laws or of the rules and regulations
+thereunder.
+Commission, or to which the Commission is a party, and without admitting or denying the findings
+herein, except as to the Commission’s jurisdiction over him and the subject matter of these
+proceedings, and the findings contained in Section III.2. below, which are admitted, Respondent
+consents to the entry of this Order Instituting Administrative Proceedings Pursuant to Rule 102(e)
+of the Commission’s Rules of Practice, Making Findings, and Imposing Remedial Sanctions
+(“Order”), as set forth below.
+III.
+On the basis of this Order and Respondent’s Offer, the Commission finds that:
+1. Borchard, age 28, is and has been a certified public accountant licensed to
+practice in the State of California since September 15, 2006.  He worked at PricewaterhouseCoopers
+LLP (“PWC”) from 2001 until 2007.
+2. On January 15, 2008, the Commission filed a complaint against Borchard in
+SEC v. Gregory B. Raben, et al. (Civil Action No. CV-08-0250-EMC).  On January 25, 2008, the
+court entered an order permanently enjoining Borchard, by consent, from future violations of
+Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) and Rule 10b-5
+thereunder.  Borchard was also ordered to pay a $20,835.57 civil money penalty.
+3. The Commission’s complaint alleged, among other things, that Borchard
+passed material, non-public information that Borchard learned through his job on to a PWC
+colleague, who then traded on the inside information.  Specifically, the complaint alleged that,
+from February to October 2006, Borchard provided his PWC colleague with material, non-public
+information about six publicly-held companies that Borchard had learned were potential
+acquisition targets, and that Borchard’s PWC colleague then traded on the basis of Borchard’s
+material, non-public information, reaping ill-gotten gains of over $20,000.00.
+IV.
+In view of the foregoing, the Commission deems it appropriate and in the public interest to
+impose the sanction agreed to in Respondent Borchard’s Offer.
+Accordingly, it is hereby ORDERED, effective immediately, that:
+A. Borchard is suspended from appearing or practicing before the Commission as an
+accountant.
+B. After three years from the date of this order, Respondent may request that the
+Commission consider his reinstatement by submitting an application (attention: Office of the
+Chief Accountant) to resume appearing or practicing before the Commission as:
+1. a preparer or reviewer, or a person responsible for the preparation or
+review, of any public company’s financial statements that are filed with the Commission.  Such
+2
+an application must satisfy the Commission that Respondent’s work in his practice before the
+Commission will be reviewed either by the independent audit committee of the public company
+for which he works or in some other acceptable manner, as long as he practices before the
+Commission in this capacity; and/or
+2. an independent accountant.  Such an application must satisfy the
+Commission that:
+(a) Respondent, or the public accounting firm with which he is
+associated, is registered with the Public Company Accounting Oversight Board (“Board”) in
+accordance with the Sarbanes-Oxley Act of 2002, and such registration continues to be effective;
+(b) Respondent, or the registered public accounting firm with which he
+is associated, has been inspected by the Board and that inspection did not identify any criticisms
+of or potential defects in Respondent’s or the firm’s quality control system that would indicate
+that Respondent will not receive appropriate supervision;
+(c) Respondent has resolved all disciplinary issues with the Board, and
+has complied with all terms and conditions of any sanctions imposed by the Board (other than
+reinstatement by the Commission); and
+(d) Respondent acknowledges his responsibility, as long as
+Respondent appears or practices before the Commission as an independent accountant, to
+comply with all requirements of the Commission and the Board, including, but not limited to, all
+requirements relating to registration, inspections, concurring partner reviews and quality control
+standards.
+C. The Commission will consider an application by Respondent to resume
+appearing or practicing before the Commission provided that his state CPA license is
+current and he has resolved all other disciplinary issues with the applicable state boards of
+accountancy. However, if state licensure is dependent on reinstatement by the
+Commission, the Commission will consider an application on its other merits.  The
+Commission’s review may include consideration of, in addition to the matters referenced
+above, any other matters relating to Respondent’s character, integrity, professional conduct,
+or qualifications to appear or practice before the Commission.
+ By the Commission.
+       N ancy M. Morris
+       S ecretary
+3

raw/aaer/2008/AAER-2785.txt ADDED Viewed

	@@ -0,0 +1,258 @@

+UNITED STATES OF AMERICA
+ Before the
+SECURITIES AND EXCHANGE COMMISSION
+SECURITIES EXCHANGE ACT OF 1934
+Release No. 57333 / February 14, 2008
+ACCOUNTING AND AUDITING ENFORCEMENT
+Release No. 2785 / February 14, 2008
+ADMINISTRATIVE PROCEEDING
+File No. 3-12957
+ORDER INSTITUTING CEASE-AND-DESIST
+In the Matter of PROCEEDINGS PURSUANT TO SECTION
+21C OF THE SECURITIES EXCHANGE ACT
+WESTINGHOUSE AIR BRAKE OF 1934, MAKING FINDINGS, AND
+TECHNOLOGIES CORPORATION, IMPOSING A CEASE-AND-DESIST ORDER
+Respondent.
+I.
+The Securities and Exchange Commission ("Commission") deems it appropriate that cease-
+and-desist proceedings be, and hereby are, instituted pursuant to Section 21C of the Securities
+Exchange Act of 1934 ("Exchange Act"), against Westinghouse Air Brake Technologies
+Corporation ("Wabtec" or "Respondent").
+II.
+In anticipation of the institution of these proceedings, Respondent has submitted an Offer of
+Settlement (the "Offer") which the Commission has determined to accept.  Solely for the purpose of
+these proceedings and any other proceedings brought by or on behalf of the Commission, or to
+which the Commission is a party, and without admitting or denying the findings herein, except as
+to the Commission’s jurisdiction over Respondent and the subject matter of these proceedings,
+which are admitted, Respondent consents to the entry of this Order Instituting Cease-and-Desist
+Proceedings Pursuant to Section 21C of the Securities Exchange Act of 1934, Making Findings,
+and Imposing a Cease-and-Desist Order ("Order"), as set forth below.1
+On February 14, 2008, the Commission filed a complaint against Wabtec in the United States District
+Court for the Eastern District of Pennsylvania alleging violations of Sections 13(b)(2)(A), 13(b)(2)(B) and 30A of
+the Exchange Act and seeking the imposition of a civil penalty.  Without admitting or denying the Commission's
+allegations, Wabtec has consented to the entry of a final judgment that requires Wabtec to pay a civil penalty of
+$87,000. See SEC v. Westinghouse Air Brake Technologies Corporation, Civil Action No. 08-CV-706 (E.D.Pa.).
+1
+III.
+On the basis of this Order and Respondent’s Offer, the Commission finds that:
+Summary
+1. This matter involves violations of the Foreign Corrupt Practices Act of 1977
+("FCPA") by Westinghouse Air Brake Technologies Corporation.  From at least 2001 through
+2005, Wabtec, through its Indian subsidiary, Pioneer Friction Limited ("Pioneer"), made
+unlawful payments to employees of the Indian government in connection with Pioneer’s efforts
+to obtain and retain business from the Indian national railway system.  During this time period,
+Pioneer made over $137,400 in improper cash payments to employees of the Indian government
+in order to have its competitive bids for government business granted or considered.  None of
+these payments were accurately reflected on Wabtec’s books and records and Wabtec failed to
+prevent or detect these payments.
+Respondent
+ 2. Wabtec, incorporated in Delaware and headquartered in western Pennsylvania,
+manufactures brake subsystems and related products for locomotives, freight cars and passenger
+vehicles, among other things.  Wabtec employs approximately 5,000 people in 40 manufacturing
+plants, service centers, and sales offices located in the United States, Canada, Mexico, Europe,
+Asia, Australia and South America.  Wabtec's stock is registered pursuant to Section 12(b) of the
+Exchange Act and is listed on the New York Stock Exchange. Wabtec files reports with the
+Commission pursuant to Section 13 of the Exchange Act.
+Other Relevant Entity
+3. Pioneer Friction Limited, incorporated and headquartered in India, manufactures
+low and high friction brake blocks for rail operations. Pioneer is a fourth tier, wholly-owned
+subsidiary of Wabtec.  Two of the intermediate subsidiaries are Australian companies which
+are, in turn, owned by a U.S. holding company.  Pioneer’s financial results are reported on a
+consolidated basis as part of Wabtec’s consolidated financial statements.
+Facts
+A. The Unlawful Payments
+4. Pioneer sells brake blocks in India to Original Equipment Manufacturers
+("OEM") and aftermarket customers.  The OEM market includes train car manufacturers owned
+or controlled by the Indian government.  The national railway system in India is controlled by
+the Indian government through the Ministry of Railroads ("MOR").  The Indian Railway Board
+("IRB") is the operating arm of the MOR.  The IRB includes sixteen "Zonal Railways.”
+2
+5. The IRB and Zonal Railways solicit sealed bids for specific quantities of certain
+low friction products from various companies located in India (the "tender process").  The IRB
+and Zonal Railways award the contract to the lowest bidder (the "primary contract") and notify
+the higher bidders of the lowest bid. Because the IRB's and Zonal Railways' requirements often
+exceed the production capacity of any single manufacturer, after awarding the contract to the
+lowest bidder, the IRB engages in negotiations with the higher bidders. In most cases, the IRB
+will award the higher bidders some business at the low bidder's price.
+6. From at least 2001 through 2005, employees of the IRB and Zonal Railways
+solicited from Pioneer two types of cash payments in connection with the tender process.  First,
+during the times that the IRB was evaluating various bids received from Pioneer and others,
+employees of the IRB and Zonal Railways solicited cash payments from Pioneer in order for the
+IRB to approve Pioneer’s contract price (hereinafter referred to as the "IRB Payments").  For the
+years 2001 through 2004, Pioneer paid approximately $85,000 in cash to employees of the IRB
+to obtain business from the IRB.  In 2005, Pioneer paid $21,217 in IRB payments to employees
+of the IRB for the same purpose.
+7. In addition, employees of the IRB and Zonal Railways solicited payments from
+Pioneer to ensure that the IRB and Zonal Railways would consider Pioneer's bids in the tender
+process and that Pioneer would be given the opportunity to sell additional quantities of certain
+products at the awarded price without going through a new tender process (hereinafter referred to
+as the "Ordering Payments").  For years 2001 through 2004, Pioneer paid approximately $25,000
+in cash in Ordering Payments to employees of the IRB and Zonal Railways for consideration of
+its bids and to obtain other business. In 2005, Pioneer paid approximately $6,250 in cash in
+Ordering Payments to employees of the IRB and Zonal Railways for the same purpose.
+8. In 2005, the IRB awarded Pioneer the primary contract and other related
+contracts. As a result of being awarded the contracts in 2005, Pioneer realized profits of
+$259,000.
+9. Pioneer’s Chairman, a non-U.S. citizen and resident who is also a Vice President
+of Wabtec, knew about and did nothing to prevent the Ordering Payments and the IRB
+Payments.
+B. Improper Recording of the Unlawful Payments
+10. Pioneer made the Ordering Payments and IRB Payments with cash accumulated
+throughout the year primarily from "marketing agents."  Marketing agents are typically
+companies that send invoices and collect payment on behalf of another company that has
+provided some service or sold some product.  To generate the necessary cash, Pioneer asked
+certain marketing agents to invoice it for services rendered in connection with particular IRB and
+Zonal Railways contracts. In fact, the invoices were fictitious. No one rendered any services;
+the sole purpose of the invoices was to generate cash to make the unlawful payments.  Pioneer
+issued checks to the marketing agent for the amount of the invoice less withholdings for taxes.
+3
+The marketing agent then returned cash to Pioneer, less a service commission.  Other marketing
+agents submitted invoices for materials that Pioneer did not receive in whole or in part.  Pioneer
+issued checks to the marketing agent for the amount of the invoice and the marketing agent
+returned cash (less the service fee and any amount owed for any material actually received) to
+Pioneer.
+11. Pioneer maintained the cash generated through the use of marketing agents in a
+locked metal box.  Pioneer documented each unlawful payment on a voucher which was
+maintained with the cash.  Pioneer also kept track of the unlawful payments on a spreadsheet.
+The vouchers and the spreadsheet were maintained separately from Pioneer's other books and
+records and were not subject to review during annual audits.
+12. Under Indian law, records generated in the normal course of business must be
+maintained for ten years.  Wabtec requires its foreign subsidiaries to follow applicable local laws
+with respect to record retention. Despite these requirements, Pioneer destroyed all records
+relating to the Ordering Payments and the IRB Payments after one year, and records do not exist
+prior to 2005.
+13. Pioneer failed to properly account for the unlawful payments in its books and
+records. Pioneer recorded the marketing agents' invoices as "consulting" expenses and supplies.
+In fact, Pioneer did not receive any services or supplies; the sole purpose of the invoice was to
+raise cash. Moreover, although Pioneer maintained records regarding the unlawful payments,
+Pioneer did not use those records to account for the unlawful payments.  Wabtec’s financial
+statements are prepared on a consolidated basis.  Accordingly, Wabtec’s books, records and
+accounts did not reflect the Ordering Payments or IRB Payments.
+C. Wabtec’s Lack of Internal Controls
+14. From 2001 through July 2006, although Wabtec's Code of Conduct prohibited
+giving anything of value to improperly influence any person in a business relationship with
+Wabtec, it did not have a FCPA policy or provide training or education to any of its employees,
+agents or subsidiaries regarding the requirements of the FCPA.  Wabtec also failed to establish a
+program to monitor its employees, agents and subsidiaries for compliance with the FCPA.
+15. In January 2006, Wabtec conducted an internal investigation of Pioneer and, upon
+its completion, voluntarily disclosed the facts and documents relating to this matter to the
+Commission staff.
+Legal Analysis
+16. The FCPA, enacted in 1977, added Section 30A to the Exchange Act in order to
+prohibit public companies, or any officer, director, employee, or agent of a public company
+from, among other things, making improper payments to foreign officials for the purpose of
+influencing their decision in order to obtain or retain business.
+4
+17. In each of the transactions described above, Wabtec, through its subsidiary,
+intended to make, and did make, the Ordering Payments and IRB Payments to employees of the
+government of India in order to obtain or retain business for Wabtec.  As a result, Wabtec
+violated Section 30A of the Exchange Act.
+18. The FCPA also added Exchange Act Section 13(b)(2)(A) to require public
+companies to make and keep books, records, and accounts, which, in reasonable detail,
+accurately and fairly reflect the transactions and dispositions of the assets of the issuer, and
+Exchange Act Section 13(b)(2)(B) to require such companies to devise and maintain a system
+of internal accounting controls sufficient to provide reasonable assurances that: (i) transactions
+are executed in accordance with management's general or specific authorization; and (ii)
+transactions are recorded as necessary to permit preparation of financial statements in
+conformity with generally accepted accounting principles or any other criteria applicable to
+such statements, and to maintain accountability for assets.
+19. As detailed above, Pioneer did not properly record the payments that it made to
+employees of the government of India in its books.  As a result, Wabtec’s books, records, and
+accounts did not, in reasonable detail, accurately reflect its transactions and dispositions of the
+assets. As a result, Wabtec violated Section 13(b)(2)(A) of the Exchange Act.
+20. In addition, Wabtec failed to devise and maintain a system of internal accounting
+controls sufficient to ensure that its employees complied with the FCPA.  As a result, Wabtec
+violated Section 13(b)(2)(B) of the Exchange Act.
+Wabtec’s Remedial Efforts
+21. In determining to accept the Offer, the Commission considered remedial acts
+undertaken by Respondent and cooperation afforded the Commission staff.
+IV.
+Undertakings
+Respondent undertakes to:
+  Independent Compliance Consultant
+22. Retain within 60 days of the issuance of the Order, an independent compliance
+consultant ("ICC"), not unacceptable to the staff of the Commission, to review and evaluate
+Wabtec's internal controls, record-keeping, and financial reporting policies and procedures as they
+relate to Wabtec's compliance with the books and records, internal accounting controls, and anti-
+bribery provisions of the FCPA, codified at Sections 13(b)(2)(A), 13(b)(2)(B), and 30A of the
+Exchange Act and other applicable foreign bribery laws. The ICC's compensation and all related
+5
+expenses shall be borne exclusively by Wabtec.  Wabtec shall cooperate fully with the ICC and
+shall provide the ICC with access to its files, books and records, and personnel as reasonably
+requested for the review;
+23. Require that the ICC issue a report, within 60 days after being retained,
+summarizing the review and recommending policies and procedures reasonably designed to
+ensure compliance with the federal securities laws as they relate to the FCPA.  Wabtec shall
+require that the ICC transmit a copy of the report to the Commission staff;
+24. Adopt all recommendations in the report of the ICC; provided, however, that
+within 60 days after the ICC serves that report, Wabtec shall, in writing, advise the ICC and the
+Commission staff of any recommendation that it considers to be unduly burdensome,
+impractical, or costly.  With respect to any recommendation that Wabtec considers unduly
+burdensome, impractical or costly, Wabtec need not adopt that recommendation at the time but
+shall propose in writing an alternative policy, procedure or system designed to achieve the same
+objective or purpose. As to any recommendation on which Wabtec and the ICC do not agree,
+such parties shall attempt in good faith to reach an agreement within 60 days after Wabtec serves
+the written advice. In the event Wabtec and the ICC are unable to agree on an alternative
+proposal, Wabtec will abide by the determinations of the ICC; and
+25. Require the ICC to enter into an agreement that provides that for the period of
+engagement and for a period of two years from completion of the engagement, the ICC shall not
+enter into any employment, consultant, attorney-client, auditing or other professional
+relationship with Wabtec, or any of its present or former affiliates, directors, officers, employees,
+or agents acting in their capacity. The agreement will also provide that the ICC will require that
+any firm with which he/she is affiliated or of which he/she is a member, and any person engaged
+to assist the ICC in performance of his/her duties under this Order shall not, without prior written
+consent of the Philadelphia Regional Office, enter into any employment, consultant, attorney-
+client, auditing or other professional relationship with Wabtec, or any of its present or former
+affiliates, directors, officers, employees, or agents acting in their capacity as such for the period
+of the engagement and for a period of two years after the engagement.
+26. Wabtec:  (i) shall not have the authority to terminate the ICC, without the prior
+written approval of the staff of the Commission; (ii) shall compensate the ICC, and persons
+engaged to assist the ICC, for services rendered pursuant to the Order at their reasonable and
+customary rates; and (iii) shall not be in and shall not have an attorney-client relationship with
+the ICC and shall not seek to invoke the attorney-client or any other doctrine or privilege to
+prevent the ICC from transmitting any information, reports, or documents to the Commission or
+the Commission’s staff.
+Certification
+27. Wabtec agrees to certify in writing to the staff (at the address set forth herein),
+within twelve months of the issuance of the Order, that Wabtec has fully adopted and complied
+6
+in all material respects with the undertakings set forth in paragraphs 22 through 26 above and
+with the recommendations of the ICC, or in the event of material non-adoption or non-
+compliance shall describe such material non-adoption and non-compliance.
+Recordkeeping
+28. Wabtec shall preserve for a period of not less than six years from the end of the
+fiscal year last used, the first two years in an easily accessible place, any record of its compliance
+with the undertakings set forth in paragraphs 22 through 26 above.
+Extension of Time
+29. For good cause shown, the staff of the Commission may extend any of the
+procedural dates set forth above.
+V.
+In view of the foregoing, the Commission deems it appropriate to impose the sanctions
+agreed to in Respondent Wabtec's Offer.
+Accordingly, it is hereby ORDERED that:
+A. Respondent Wabtec cease and desist from committing or causing any violations and
+any future violations of  Sections 13(b)(2)(A), 13(b)(2)(B), and 30A of the Exchange Act.
+B. Respondent shall comply with the undertakings enumerated in Section IV. above.
+C. IT IS FURTHERED ORDERED that Respondent shall, within ten days of the
+entry of this Order, pay disgorgement and prejudgment interest in the total amount of $288,351,
+consisting of $259,000 in disgorgement and $29,351 in prejudgment interest, to the United States
+Treasury. Such payment shall be: (A) made by United States postal money order, certified
+check, bank cashier's check or bank money order; (B) made payable to the Securities and
+Exchange Commission; (C) hand-delivered or mailed to the Office of Financial Management,
+Securities and Exchange Commission, Operations Center, 6432 General Green Way, Stop 0-3,
+Alexandria, VA 22312; and (D) submitted under cover letter that identifies Wabtec as a
+Respondent in these proceedings, the file number of these proceedings, a copy of which cover
+letter and money order or check shall be sent to Elaine C. Greenberg, Associate Regional
+Director, Division of Enforcement, Securities and Exchange Commission, Philadelphia Regional
+Office, 701 Market Street, Suite 2000, Philadelphia, PA 19106.
+By the Commission.
+       N ancy M. Morris
+7
+       S ecretary
+8

raw/aaer/2008/AAER-2786.pdf ADDED Viewed

Binary file (82 kB). View file

raw/aaer/2008/AAER-2787.txt ADDED Viewed

	@@ -0,0 +1,101 @@

+UNITED STATES OF AMERICA
+Before the
+SECURITIES AND EXCHANGE COMMISSION
+SECURITIES EXCHANGE ACT OF 1934
+Release No. 57339 / February 15, 2008
+ACCOUNTING AND AUDITING ENFORCEMENT
+Release No. 2787 / February 15, 2008
+ADMINISTRATIVE PROCEEDING
+File No. 3-10354
+: ORDER GRANTING APPLICATION FOR
+: REINSTATEMENT TO APPEAR AND PRACTICEIn the Matter of : BEFORE THE COMMISSION AS AN ACCOUNTANT
+: RESPONSIBLE FOR THE PREPARATION OR Jeffrey M. Yonkers, CPA : REVIEW OF FINANCIAL STATEMENTS REQUIRED
+: TO BE FILED WITH THE COMMISSION
+On July 27, 2001, Jeffrey M. Yonkers, CPA (“Yonkers”) was denied the privilege of
+appearing or practicing as an accountant before the Commission as a result of settled public
+administrative proceedings instituted by the Commission against him pursuant to Rule 102(e) of
+the Commission's Rules of Practice.1  Yonkers consented to the entry of the order without
+admitting or denying the findings therein.  This order is issued in response to Yonkers’
+application for reinstatement to appear and practice before the Commission as an accountant
+responsible for the preparation or review of financial statements required to be filed with the
+Commission.
+The Commission alleged that the financial statements of Detour Magazine, Inc.
+(“Detour”) contained in their filings with the Commission during 1997 and 1998, as audited by
+Yonkers and others, materially misrepresented the company’s financial condition and results of
+operation. Based upon his conduct dur ing the audits of Detour’s financial statement, the
+Commission determined that Yonkers had willfully violated Section 10A of the Securities
+Exchange Act of 1934 (“Exchange Act”) and willfully aided and abetted Detour’s violations of
+Section 13(a) of the Exchange Act and Rules 13a-1 and 13a-13 thereunder.  The Commission
+also determined that Yonkers engaged in improper professional conduct under Rule 102(e) of the
+Commission’s Rules of Practice.
+1 See Accounting and Auditing Enforcement Release No. 1428 dated July 27, 2001.  Yonkers was permitted,
+pursuant to the order, to apply for reinstatement after one year upon making certain showings.
+In his capacity as a preparer or reviewer, or as a person responsible for the preparation or
+review, of financial statements of a public company to be filed with the Commission, Yonkers
+attests that he will undertake to have his work reviewed by the independent audit committee of
+any company for which he works, or in some other manner acceptable to the Commission, while
+practicing before the Commission in this capacity. Yonkers is not, at this time, seeking to appear
+or practice before the Commission as an independent accountant.  If he should wish to resume
+appearing and practicing before the Commission as an independent accountant, he will be
+required to submit an application to the Commission showing that he has complied and will
+comply with the terms of the original suspension order in this regard.  Therefore, Yonkers’
+suspension from practice before the Commission as an independent accountant continues in
+effect until the Commission determines that a sufficient showing has been made in this regard in
+accordance with the terms of the original suspension order.
+Rule 102(e)(5) of the Commission’s Rules of Practice governs applications for
+reinstatement, and provides that the Commission may reinstate the privilege to appear and
+practice before the Commission “for good cause shown.”
+2  This “good cause” determination is
+necessarily highly fact specific.
+On the basis of information supplied, representations made, and undertakings agreed to
+by Yonkers, it appears that he has complied with the terms of the July 27, 2001 order suspending
+him from appearing or practicing before the Commission as an accountant, that no information
+has come to the attention of the Commission relating to his character, integrity, professional
+conduct or qualifications to practice before the Commission that would be a basis for adverse
+action against him pursuant to Rule 102(e) of the Commission's Rules of Practice, and that
+Yonkers, by undertaking to have his work reviewed by the independent audit committee of any
+company for which he works, or in some other manner acceptable to the Commission, in his
+practice before the Commission as a preparer or reviewer of financial statements required to be
+filed with the Commission, has shown good cause for reinstatement.  Therefore, it is accordingly,
+ORDERED pursuant to Rule 102(e)(5)(i) of the Commission's Rules of Practice that
+Jeffrey M. Yonkers, CPA is hereby reinstated to appear and practice before the Commission as
+an accountant responsible for the preparation or review of financial statements required to be
+filed with the Commission.
+By the Commission.
+Nancy M. Morris
+Secretary
+2 Rule 102(e)(5)(i) provides:
+“An application for reinstatement of a person permanently suspended or disqualified under paragraph (e)(1) or (e)(3)
+of this section may be made at any time, and the applicant may, in the Commission’s discretion, be afforded a
+hearing; however, the suspension or disqualification shall continue unless and until the applicant has been reinstated
+by the Commission for good cause shown.” 17 C.F.R. § 201.102(e)(5)(i).
+2

raw/aaer/2008/AAER-2789.txt ADDED Viewed

	@@ -0,0 +1,84 @@

+UNITED STATES OF AMERICA
+ Before the
+SECURITIES AND EXCHANGE COMMISSION
+SECURITIES EXCHANGE ACT OF 1934
+Release No.  57353 / February 19, 2008
+ACCOUNTING AND AUDITING ENFORCEMENT
+Release No.  2789 / February 19, 2008
+ADMINISTRATIVE PROCEEDING
+File No. 3-12964
+: ORDER INSTITUTING
+In the Matter of : ADMINISTRATIVE PROCEEDINGS
+: PURSUANT TO RULE 102(e) OF THE
+             Michael K. Openshaw, CPA : COMMISSION’S RULES OF
+: PRACTICE, MAKING FINDINGS, AND
+Respondent. : IMPOSING REMEDIAL SANCTIONS
+:
+I.
+The Securities and Exchange Commission (“Commission”) deems it appropriate and in the
+public interest that public administrative proceedings be, and hereby are, instituted against Michael
+K. Openshaw, (“Respondent” or “Openshaw”) pursuant to Rule 102(e)(3)(i) of the Commission’s
+Rules of Practice. 1
+1 Rule 102(e)(3)(i) provides, in relevant part, that:
+The Commission, with due regard to the public interest and without preliminary hearing,
+may, by order, . . . suspend from appearing or practicing before it any . . . accountant . . . who has
+been by name . . . permanently enjoined by any court of competent jurisdiction, by reason of his
+or her misconduct in an action brought by the Commission, from violating or aiding and abetting
+the violation of any provision of the Federal securities laws or of the rules and regulations
+thereunder.
+II.
+In anticipation of the institution of these proceedings, Respondent has submitted an Offer
+of Settlement (the “Offer”) which the Commission has determined to accept.  Solely for the
+purpose of these proceedings and any other proceedings brought by or on behalf of the
+Commission, or to which the Commission is a party, and without admitting or denying the findings
+herein, except as to the Commission’s jurisdiction over him and the subject matter of these
+proceedings, and the findings contained in Section III.C. below, which are admitted, Respondent
+consents to the entry of this Order Instituting Administrative Proceedings Pursuant Rule 102(e) of
+the Commission’s Rules of Practice, Making Findings, and Imposing Remedial Sanctions
+(“Order”), as set forth below.
+III.
+On the basis of this Order and Respondent’s Offer, the Commission finds that:
+A. Openshaw, age 48, became a certified public accountant licensed to practice
+in the state of Utah in 1984.  Openshaw’s CPA license expired on September 30, 1996.  Openshaw
+served as Chief Financial Officer of Q Comm International, Inc., from April 1, 2001, until May 31,
+2005. Openshaw is a resident of Draper, Utah.
+B. Q Comm International, Inc. was, at all relevant times, a Utah corporation
+based in Orem, Utah.  Q Comm is in the business of purchasing and reselling prepaid
+telecommunication products and services, primarily prepaid wireless telephone talk time and
+prepaid long distance minutes.  In general, these prepaid products are sold in the form of a personal
+identification number, or “PIN.”  Q Comm purchases PINs from telecommunications carriers and
+distributes them through a network of retail outlets.  Q Comm stock was registered with the
+Commission under Section 12(b) of the Exchange Act since January 13, 2000 and at all times
+relevant to these proceedings.  Q Comm stock traded on the American Stock Exchange under the
+symbol “QMM” at all times relevant to these proceedings.
+C. On December 17, 2007, the Commission filed a complaint against
+Openshaw in SEC v. Michael K. Openshaw, (Civil Action No. 2:07-cv-0977 in the United States
+District Court for the District of Utah).  On January 23, 2008, the court entered an order
+permanently enjoining Openshaw, by consent, from future violations of Sections 10(b) and
+13(b)(5) of the Exchange Act and Rules 10b-5, 13a-14, 13b2-1 and 13b2-2 thereunder, and aiding
+and abetting violations of Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and
+Rules 12b-20, 13a-1, and 13a-13 thereunder.  Openshaw was not ordered to pay a civil money
+penalty based on his sworn representations in his Statement of Financial Condition dated July 31,
+2007.
+D. The Commission’s complaint alleged, among other things, that from
+September through December of 2004, Openshaw, who was then CFO of Q Comm, completed
+five unauthorized bank wires, transferring a total of $1,525,000 to a Q Comm vendor.  Openshaw
+wired these funds without approval and without disclosing the transfers to other members of Q
+2
+Comm’s management or its auditors.  Openshaw concealed the transfers from Q Comm and its
+auditors for nearly nine months by mischaracterizing them through improper accounting entries
+and by altering documents.  The complaint further alleges that Openshaw’s acts caused Q Comm’s
+financial statements for the year ended December 31, 2004 and quarter ended March 31, 2005 to
+materially deviate from Generally Accepted Accounting Principles.  In addition, Openshaw falsely
+certified the annual report for the year ended December 31, 2004.
+IV.
+In view of the foregoing, the Commission deems it appropriate and in the public interest to
+impose the sanctions agreed to in Respondent Openshaw’s Offer.
+Accordingly, it is hereby ORDERED, effective immediately, that:
+Openshaw is suspended from appearing or practicing before the Commission as an
+accountant.
+ By the Commission.
+       N ancy M. Morris
+       S ecretary
+3

raw/aaer/2008/AAER-2792.txt ADDED Viewed

	@@ -0,0 +1,323 @@

+ UNITED STATES OF AMERICA
+ Before the
+SECURITIES AND EXCHANGE COMMISSION
+SECURITIES EXCHANGE ACT OF 1934
+Release No.  57381 / February 26, 2008
+ACCOUNTING AND AUDITING ENFORCEMENT
+Release No.  2792 / February 26, 2008
+ADMINISTRATIVE PROCEEDING
+File No. 3-12971
+In the Matter of
+NICHOLAS DIFAZIO, CPA,
+Respondent.
+ORDER INSTITUTING PUBLIC
+ADMINISTRATIVE PROCEEDINGS
+PURSUANT TO RULE 102(e) OF THE
+COMMISSION’S RULES OF PRACTICE,
+MAKING FINDINGS, AND IMPOSING
+REMEDIAL SANCTIONS
+I.
+The Securities and Exchange Commission (“Commission”) deems it appropriate that public
+administrative proceedings be, and hereby are, instituted against Nicholas Difazio, CPA
+(“Respondent” or “Difazio”) pursuant to Rule 102(e)(1)(ii) of the Commission’s Rules of Practice.1
+II.
+In anticipation of the institution of these proceedings, Respondent has submitted an Offer
+of Settlement (the “Offer”) which the Commission has determined to accept.  Solely for the
+purpose of these proceedings and any other proceedings brought by or on behalf of the
+Commission, or to which the Commission is a party, and without admitting or denying the findings
+herein, except as to the Commission’s jurisdiction over him and the subject matter of these
+proceedings, which are admitted, Respondent consents to the entry of this Order Instituting Public
+1 Rule 102(e)(1)(ii) provides, in pertinent part, that:
+The Commission may . . . deny, temporarily or permanently, the privilege of appearing or practicing before
+it . . . to any person who is found . . . to have engaged in unethical or improper professional conduct.
+Administrative Proceedings Pursuant to Rule 102(e) of the Commission’s Rules of Practice,
+Making Findings, and Imposing Remedial Sanctions (“Order”), as set forth below.
+III.
+On the basis of this Order and Respondent’s Offer, the Commission finds2 that:
+A. SUMMARY
+This Order concerns the conduct of Nicholas Difazio, an audit partner at Deloitte & Touche
+LLP (“D&T”), in connection with fiscal year 2000 and 2001 audits of the financial statements of
+Delphi Corporation (“Delphi”).  On October 30, 2006, the Commission brought actions against
+Delphi and 13 individuals in connection with their role in widespread accounting violations at
+Delphi.  Difazio, then the lead engagement partner on the Delphi audits, engaged in improper
+professional conduct, as detailed below.
+B. RESPONDENT
+Nicholas Difazio, 44, a resident of Bloomfield, Michigan, has been an audit partner at
+D&T since 1995 and served as lead client service partner on the Delphi engagement for the fiscal
+year 1999 through 2002 audits of Delphi’s financial statements.  In that role, Difazio was directly
+responsible for providing audit services, and oversaw the provision of tax, mergers and
+acquisitions and consulting services, to Delphi.  He currently serves in D&T’s New York office.
+Difazio has been licensed as a CPA in the State of Michigan since 1987 and in the State of New
+York since 2003.
+C. FACTS
+1. Difazio’s Review and Audit of Delphi Warranty Costs Charged to Equity
+In the second quarter of 2000, Delphi misclassified a $112 million increase in its warranty
+reserves as a charge to stockholders’ equity, rather than to current-period warranty expenses, as
+required by Generally Accepted Accounting Principles (“GAAP”).  The misclassification was
+reflected in Delphi’s second quarter 2000 Form 10-Q and in its fiscal year 2000 Form 10-K.
+Delphi’s improper treatment of the warranty reserve allowed it to increase the reserve and avoid a
+material increase in expenses.  Later, Delphi restated the accounting for this transaction and D&T
+signed off on the restatement.
+Delphi was spun-off from its former parent effective January 1, 1999.  By May 2000,
+Delphi’s former parent company had asserted as much as $800 million in warranty claims under
+Delphi’s supply agreement with the former parent company.  Many claims related to parts that
+Delphi had manufactured and the former parent company had incorporated into its products prior
+to Delphi’s spin-off from the former parent company in 1999.  Delphi disputed the former parent
+company’s right to recover these warranty costs, but ultimately determined during the second
+The findings herein are made pursuant to Respondent's Offer of Settlement and are not binding on any
+other person or entity in this or any other proceeding.
+2
+2
+quarter of 2000 that it would likely offer the former parent company $100 million to settle the
+claims.  Delphi incorrectly accounted for the warranty claims using an accounting method afforded
+to certain post-employment benefit liabilities that received special treatment under the agreement
+governing the spin-off of Delphi from the former parent company.  Payments from Delphi to the
+former parent company made within one year of the spin-off to offset the “true up” of those post-
+employment benefit liabilities were accounted for as a direct charge to Delphi’s shareholders’
+equity, rather than as a charge to income, and certain other adjustments were similarly charged
+directly to equity because they were considered to be the resolution of open items in accordance
+with the original intent of the agreement between Delphi and its former parent.  Delphi treated the
+warranty claims by the former parent company the same way:  Delphi recorded an increase to its
+warranty reserve of approximately $112 million, and improperly accounted for the accrual as a
+charge to stockholders’ equity of $69 million, which was $112 million net of taxes.
+Difazio should not have accepted Delphi’s view that it could use these special accounting
+rules and not the accounting rules that apply broadly to contingencies and changes in estimates on
+this warranty matter.  Although Difazio provided a memorandum regarding the transaction to the
+Concurring Review Partner with regard to this warranty matter, he did not consult with D&T’s
+national office concerning Delphi’s application of the special spin-off accounting treatment to the
+former parent company’s warranty claims.  Delphi’s warranty liability did not qualify for such
+special treatment.  Although the warranty claims related to parts produced by Delphi prior to the
+spin-off, and were referred to as such by the parties, they arose in the normal course of the
+customer-supplier relationship between Delphi and the former parent company.  The spin-off
+agreement expressly provided that Delphi was liable for warranty defects, regardless of a part’s
+date of manufacture, and did not include provisions comparable to the true-up mechanism for post-
+employment benefits.  Under these circumstances, changes in the estimated warranty liability
+should have been accounted for through the income statement of the current period, in accord with
+Statement of Financial Accounting Standards (“SFAS”) No. 5, “Accounting for Contingencies.”
+Difazio did not correctly identify the appropriate accounting guidance for the warranty accrual and
+unreasonably accepted Delphi’s method which avoided recognition of the warranty expense.  For
+these reasons, Difazio’s audit did not conform to Generally Accepted Auditing Standards
+(“GAAS”).
+2. Difazio’s Review and Audit of the September 2000 Settlement Agreement
+In the third quarter of 2000, Delphi paid the former parent company $237 million to resolve
+its warranty claims.  Delphi misclassified $202 million of the $237 million payment to the former
+parent company as relating to pension and other post-employment benefits rather than warranty
+expense.  This enabled Delphi to avoid recognizing the warranty expense in the third quarter and
+instead to defer that charge over many years.  By accounting for only $35 million of the payment
+as settlement of warranty issues and the remaining $202 million as a pension “actuarial loss” that
+would be amortized as a charge to earnings over the next decade or more, Delphi did not comply
+with GAAP.
+By September 2000, Delphi determined to pay the former parent company to settle 27
+identified warranty claims, and it drafted a settlement agreement according to which Delphi would
+3
+pay the former parent company $237 million, which, unknown to Difazio, was the parties’ estimate
+of the present value of Delphi’s share of the former parent company’s anticipated warranty outlays.
+Although the agreement negotiated orally between the parties covered only warranty claims,
+Delphi’s management drafted and the former parent company signed a written settlement
+agreement, dated September 22, 2000, that mischaracterized the $237 million settlement as
+resolving two issues – warranty claims and increased pension and other post-employment benefit
+costs due to changes in healthcare assumptions – instead of just warranty claims.  Three weeks
+before the agreement was executed, Delphi management discussed with Difazio a request by its
+former parent for adjustments to offset certain healthcare and other cost trends.  Prior to the
+consultation, a Delphi manager had mentioned to Difazio that the former parent was expected to
+raise such an issue. Difazio did not know, however, that the former parent company had never
+asserted a claim involving changes in healthcare assumptions.  In fact, the former parent company
+believed the separation agreements governing Delphi’s spin-off from the former parent company
+would not allow such a claim.  Delphi management told Difazio that it intended to attribute
+$202 million of the $237 million to the release of true-up assumption claims. 3  As support for its
+valuation of the other post-employment benefit claims, Delphi furnished Difazio with the deceptive
+written agreement and a September 6, 2000, letter from an actuarial consultant stating that $202
+million was a “rough estimate of the impact” of using certain updated and forecasted assumptions
+for healthcare claims and health care trend rates in the calculation of the true-up between Delphi
+and the former parent company.
+When Delphi presented the executed agreement as simultaneously settling two issues,
+Difazio should have made greater inquiry into Delphi’s representations supporting the allocation
+which was now necessary.  Difazio should have known that the separation agreements provided
+that the 1998 assumptions should be used for the true-up calculations.  Difazio did not request or
+receive any documentation of the former parent company’s purported claim or any legal
+assessment of its merits, and instead relied on the representations of members of Delphi
+management whom he believed were knowledgeable about the negotiations.  Difazio should have
+known that updating the assumptions would result in Delphi’s paying that incremental cost for
+employees assigned to the former parent company, even though the spin-off agreement limited
+Delphi’s responsibility to benefits earned by its own employees who were active at the spin-off
+date and had not retired during a brief period following the spin-off.
+Difazio also placed undue reliance on Delphi’s actuarial consultant in support of the
+reasonableness of the other post-employment benefit claim.  Although he had oral discussions with
+the actuary in which the actuary explained the calculation and his understanding of the agreement,
+Difazio should have known that the actuary did not participate in any negotiations with the former
+parent company and therefore could only be relaying information received from Delphi, and that
+the actuary was not interpreting Delphi’s agreements with the former parent company, but merely
+performing a requested calculation using inputs provided by Delphi.  Moreover, D&T requested a
+separate letter from the actuary during its year-end audit to confirm the valuation in the settlement
+agreement and the approach used in determining the amount.  In response, the actuary faxed a copy
+True-up calculations were designed to restore Delphi to its initially agreed-upon capitalization as of
+January 1, 1999, after adjustments for the post-employment liabilities recorded for employees that returned to
+Delphi’s former parent company or retired as former parent company employees during a window period.
+4
+3
+of its original September 6 letter with a cover sheet noting:  “Attached is a note we prepared in
+September regarding the impact of alternative actuarial assumptions on certain true-up amounts.
+Please see [Delphi] for further information regarding the September agreement.”  In accordance
+with Delphi’s instruction, the actuary included the amount Delphi attributed to resolution of the
+post-employment assumptions within the deferred pension balances in his year-end valuation.
+Difazio unreasonably concluded that the actuary’s sending a copy of the original September 6 letter
+and the year-end valuation was sufficient confirmation.
+Additionally, in connection with the $237 million payment, Difazio unreasonably did not
+object to Delphi’s method of allocating the settlement, and Difazio did not gather evidence as to
+whether the $202 million allocation reflected the fair value of the release in the settlement
+agreement.  Further, Difazio unreasonably relied on Delphi’s warranty cost experience as a wholly
+owned subsidiary as evidence supporting the residual attribution of $35 million to the 27 settled
+warranty claims, despite his awareness that the parent company’s claims against Delphi as an
+independent company could be different.
+In addition, Difazio failed to apply adequate professional skepticism in light of indications
+that the former parent company could be accounting for a much greater portion of the $237 million
+as payment for the former parent company’s warranty claims against Delphi.  First, Difazio did not
+sufficiently scrutinize a “clawback” provision in the settlement agreement under which, if the
+former parent company’s warranty expense turned out to be less than anticipated, Delphi might be
+able to recover from the former parent company amounts in excess of the $35 million it supposedly
+paid for warranty.  Difazio also failed to recognize the implications of a side letter to the agreement
+which was necessary only because the former parent company and Delphi both understood that the
+former parent company would be treating the $237 million as a warranty payment and that this
+would have certain tax implications relating to the spin-off. 4  Finally, Difazio did not perform any
+additional procedures in response to a call from the lead D&T engagement partner on the audit of
+the former parent company that he received after the opinion on Delphi’s fiscal year 2000 financial
+statements had been issued.  The engagement partner told Difazio to make sure he had
+documentation for the accounting position taken by Delphi.  In light of this call, Difazio should
+have made further inquiries prior to the subsequent reissuance of D&T’s audit report for fiscal year
+2000 in Delphi’s May 2001 prospectus offering debt securities.
+In sum, Difazio’s performance on the Delphi audit was deficient because he did not
+challenge sufficiently Delphi’s unreasonable approach to the allocation of the settlement amount or
+gather sufficient evidence supporting the allocation.  Difazio mistakenly assured the Delphi audit
+committee regarding the completeness of D&T’s review of the settlement agreement and that D&T
+For liquidity reasons, Delphi could not pay $237 million in addition to a previously agreed $800 million for
+true-up.  The former parent company was willing to defer part of the amount due from Delphi, but the tax-free status of
+the spin-off would have been jeopardized if the amount deferred related to warranty reimbursement rather than the true-
+up agreement.  Therefore, the former parent company and Delphi executed a separate agreement in conjunction with
+the settlement agreement specifying that $237 million of the $800 million true-up payment would be deferred, and that
+Delphi would immediately pay the $237 million due under the settlement agreement.  Difazio should have recognized
+that this side agreement would not have been necessary had the former parent company also intended to account for the
+bulk of the settlement payment as relating to true-up.
+5
+4
+believed it had obtained sufficient evidence to conclude that “the accounting is reasonable.”  In
+reality, for the reasons given above, Difazio’s audit did not conform to GAAS.
+3.	 Difazio’s Response to New Information Concerning the
+Repurchase of Generator Cores and Batteries from the Consulting Company
+In a December 27, 2000 transaction, Delphi purported to sell $70 million of bulk
+inventories consisting of substantially all of Delphi’s inventories of generator cores and finished
+automotive batteries to a company that was primarily engaged in providing consulting assistance to
+troubled automotive industry suppliers and automotive companies engaged in turnaround efforts
+(the “Consulting Company”). The written agreement between Delphi and the Consulting
+Company expressly stated that it constituted the entire agreement, and that any oral discussions in
+connection with the agreement were not enforceable.  The written agreement contained no
+commitment to repurchase the cores or batteries.  Nevertheless, pursuant to an oral side agreement
+made at the time of the original sale and not revealed to D&T or Difazio, Delphi purchased the
+identical inventory of cores and batteries back from the Consulting Company on January 5, 2001,
+at its original price, plus a transaction fee. Because Delphi committed to repurchase the cores and
+batteries at a price that covered the Consulting Company’s costs and paid it a fee, GAAP
+required the arrangement to be accounted for as a product financing under SFAS No. 49, but
+Delphi improperly accounted for the transactions as a separate sale and purchase. Delphi did not
+recognize any revenue or direct profit on the sale, but nevertheless recognized $27 million in last
+in, first out (“LIFO”) inventory liquidation gains, which were included by Delphi as part of its
+year-end disclosure of $96 million in LIFO gains that Delphi attributed in part to “aggressive
+inventory management.”
+A D&T partner other than Difazio performed and documented the year-end audit
+procedures in connection with this transaction. However, Difazio was aware of the transaction and
+his notes prepared for January and February 2001 audit committee meetings describe his
+understanding that the sale of the generator cores was in anticipation of a sale of the generator
+business with which the inventory was associated.
+Later, however, in the course of D&T’s review of Delphi’s first quarter 2001 financial
+statements, in April or May 2001, Difazio became aware that at least a significant portion of the
+generator cores sold in the final days of 2000 had been repurchased during the first quarter.  As
+part of his quarterly review, Difazio asked senior members of Delphi’s management why a
+repurchase had occurred, and was told that Delphi had changed its view as to its need for
+possession of the cores in light of its plans regarding the sale of the generator business.  Delphi
+management also orally reaffirmed to Difazio that there had been no prior repurchase commitment
+to the Consulting Company.  Difazio accepted this explanation, based on the facts known to him,
+but did not document his consideration of this issue, and performed no additional procedures.
+The response of Difazio to the discovery of inventory repurchased in the first quarter so
+soon after the year-end bulk sale, particularly in the face of a prior management representation that
+there was no obligation to repurchase the inventory, was inadequate.  It indicated insufficient
+concern about facts that could have contradicted important management representations or
+otherwise indicated the possible presence of fraud.  Difazio recalls knowing that “some” inventory
+6
+was repurchased at some time in the first quarter, but had no recollection that the sale or repurchase
+also involved batteries.  Difazio had a duty in those circumstances to learn more about the
+unexpected repurchase so that the inquiries of management could be sufficiently probative, but he
+did not seek out additional facts. D&T’s work papers showed that the repurchase comprised all, or
+substantially all, of the original bulk sale of both generator cores and batteries.  The invoice for the
+repurchase, which D&T neither requested nor received, showed that it occurred nine days after the
+sale. The invoice price, compared to the original sale price, showed that the purported value of the
+inventory increased over those nine days (representing the fee to the Consulting Company).  In
+addition, Delphi’s records reveal that Delphi itself had provided the cash with which the
+Consulting Company purchased the inventories.  In light of facts which were known to him,
+GAAS required Difazio to make additional inquiries or conduct additional procedures.
+D. VIOLATIONS
+Rule 102(e)(1)(ii) provides that the Commission may temporarily or permanently
+deny an accountant the privilege of appearing or practicing before it, if it finds, after notice
+and opportunity for hearing, that the accountant engaged in “improper professional
+conduct.” Such improper professional conduct includes, as applicable here, negligent
+conduct, defined as “repeated instances of unreasonable conduct, each resulting in a
+violation of applicable professional standards, that indicate a lack of competence to practice
+before the Commission.”  Rule 102(e)(1)(iv)(A)-(B).  Difazio failed (i) to obtain sufficient
+competent evidential matter to afford a reasonable basis for the opinion rendered, Auditing
+Standards §AU 326, (ii) to exercise due professional care in the planning and performance
+of the audit, Auditing Standards § AU 230, and (iii) in performing the audit to identify
+material departures from GAAP in the financial statements, Auditing Standards § AU 410.
+In addition, he wrongly stated that the audit conformed to GAAS, Auditing Standards § AU
+508. As a result of the actions detailed above, for Delphi’s fiscal year 2000 and 2001,
+Difazio engaged in improper professional conduct on the second and third quarter 2000
+warranty and batteries/cores transactions.
+E. FINDINGS
+Based on the foregoing, the Commission finds that Difazio engaged in improper
+professional conduct pursuant to Rule 102(e)(1)(ii) of the Commission’s Rules of Practice.
+IV.
+In view of the foregoing, the Commission deems it appropriate to impose the sanctions
+agreed to in Respondent Difazio’s Offer.
+Accordingly, it is hereby ORDERED, effective immediately, that:
+A. Difazio is denied the privilege of appearing or practicing before the Commission as
+an accountant.
+7
+B. After three (3) years from the date of this order, Respondent may request that
+the Commission consider his reinstatement by submitting an application (attention: Office of
+the Chief Accountant) to resume appearing or practicing before the Commission as:
+1. a preparer or reviewer, or a person responsible for the preparation or
+review, of any public company’s financial statements that are filed with the Commission.  Such
+an application must satisfy the Commission that Respondent’s work in his practice before the
+Commission will be reviewed either by the independent audit committee of the public company
+for which he works or in some other acceptable manner, as long as he practices before the
+Commission in this capacity; and/or
+2. an independent accountant.  Such an application must satisfy the
+Commission that:
+(a) Respondent, or the public accounting firm with which he is
+associated, is registered with the Public Company Accounting Oversight Board (“Board”) in
+accordance with the Sarbanes-Oxley Act of 2002, and such registration continues to be effective;
+(b) Respondent, or the registered public accounting firm with which he
+is associated, has been inspected by the Board and that inspection did not identify any criticisms
+of or potential defects in the respondent’s or the firm’s quality control system that would indicate
+that the respondent will not receive appropriate supervision;
+ (c) Respondent has resolved all disciplinary issues with the Board, and
+has complied with all terms and conditions of any sanctions imposed by the Board (other than
+reinstatement by the Commission); and
+(d) Respondent acknowledges his responsibility, as long as
+Respondent appears or practices before the Commission as an independent accountant, to
+comply with all requirements of the Commission and the Board, including, but not limited to, all
+requirements relating to registration, inspections, concurring partner reviews and quality control
+standards.
+C. The Commission will consider an application by Respondent to resume appearing
+or practicing before the Commission provided that his state CPA license is current and he has
+resolved all other disciplinary issues with the applicable state boards of accountancy.  However,
+8
+if state licensure is dependent on reinstatement by the Commission, the Commission will
+consider an application on its other merits.  The Commission’s review may include consideration
+of, in addition to the matters referenced above, any other matters relating to Respondent’s
+character, integrity, professional conduct, or qualifications to appear or practice before the
+Commission.
+ By the Commission.
+       N ancy M. Morris
+       S ecretary
+9

raw/aaer/2008/AAER-2794.txt ADDED Viewed

	@@ -0,0 +1,129 @@

+UNITED STATES OF AMERICA
+ before the
+SECURITIES AND EXCHANGE COMMISSION
+SECURITIES EXCHANGE ACT OF 1934
+Release No. 57428 / March 4, 2008
+ACCOUNTING AND AUDITING ENFORCEMENT
+Release No. 2794 / March 4, 2008
+ADMINISTRATIVE PROCEEDING
+File No. 3-12974
+:
+:
+:
+In the Matter of : ORDER INSTITUTING ADMINISTRATIVE
+: PROCEEDINGS PURSUANT TO RULE
+   Richard E. Fresia, CPA, : 102(e) OF THE COMMISSION’S RULES OF
+: PRACTICE, MAKING FINDINGS, AND
+Respondent. : IMPOSING REMEDIAL SANCTIONS
+:
+:
+____________________________________ :
+I.
+The Securities and Exchange Commission (“Commission”) deems it appropriate and in the
+public interest that public administrative proceedings be, and hereby are, instituted against
+Richard E. Fresia (“Respondent” or “Fresia”) pursuant to Rule 102(e)(3)(i) of the Commission’s
+Rules of Practice.1
+1 Rule 102(e)(3)(i) provides, in relevant part, that:
+The Commission, with due regard to the public interest and without preliminary hearing,
+may, by order, . . . suspend from appearing or practicing before it any . . . accountant . . . who has
+been by name . . . permanently enjoined by any court of competent jurisdiction, by reason of his
+or her misconduct in an action brought by the Commission, from violating or aiding and abetting
+the violation of any provision of the Federal securities laws or of the rules and regulations
+thereunder.
+II.
+In anticipation of the institution of these proceedings, Respondent has submitted an Offer
+of Settlement (the “Offer”) which the Commission has determined to accept.  Solely for the
+purpose of these proceedings and any other proceedings brought by or on behalf of the
+Commission, or to which the Commission is a party, and without admitting or denying the findings
+herein, except as to the Commission’s jurisdiction over him and the subject matter of these
+proceedings, and the findings contained in Section III.D. below, which are admitted, Respondent
+consents to the entry of this Order Instituting Administrative Proceedings Pursuant to Rule 102(e)
+of the Commission’s Rules of Practice, Making Findings, and Imposing Remedial Sanctions
+(“Order”), as set forth below.
+III.
+On the basis of this Order and Respondent’s Offer, the Commission finds that:
+A. Fresia, age 52, is and has been a certified public accountant holding an inactive
+license to practice in the State of Colorado.  Fresia served as the chief financial officer of the
+Expanets, Inc. (“Expanets”) subsidiary of NorthWestern Corporation (“NorthWestern”) from April
+2002 through May 2003.
+B. NorthWestern was, at all relevant times, a Delaware corporation with its principal
+place of business in Sioux Falls, South Dakota.  NorthWestern operates a regulated utility business
+in South Dakota, Nebraska and Montana.  During the period of conduct described herein,
+NorthWestern consolidated the financial results of Expanets.  At all relevant times, NorthWestern’s
+common stock was registered with the Commission pursuant to Section 12(b) of the Securities
+Exchange Act of 1934 (“Exchange Act”), and traded on the New York Stock Exchange.
+C. Expanets, formerly headquartered in Englewood, Colorado, provided networked
+telecommunications equipment and services to medium-sized businesses nationwide.  Expanets
+was comprised of approximately 26 small telecommunications equipment resellers and a former
+sales division of Lucent Technologies.  NorthWestern wrote off substantially all of its investment
+in Expanets in its 2002 Form 10-K and announced its intent to sell Expanets in April 2003.  In the
+second quarter of 2003, Expanets’ operations were discontinued, and in May 2004, Expanets filed
+for bankruptcy.  Proceeds from the sale of Expanets’ assets were distributed in bankruptcy.
+D. On July 23, 2007, the Commission filed a complaint against Fresia in Securities and
+Exchange Commission v. Richard E. Fresia, Civil Action Number 1:07-CV-01549-JKL-BNB in
+the United States District Court for the District of Colorado.  On February 22, 2008 the court
+entered a final judgment permanently enjoining Fresia, by consent, from future violations of
+Section 13(b)(5) of the Exchange Act and Rule 13b2-1 thereunder, and aiding and abetting
+violations of Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Rules 12b-20,
+13a-11 and 13a-13 thereunder.  Fresia was also ordered to pay a $20,000 civil money penalty.
+2
+E. The Commission’s Complaint alleged, among other things, that during the second
+and third quarters of 2002, Respondent participated in concealing from the public Expanets’
+ongoing operational problems and poor financial performance.  First, the Complaint alleged that
+Respondent knew that Expanets improperly accounted for accounts receivable and adjustments to
+customers’ bills, causing overstatements of NorthWestern’s reported income from continuing
+operations of 90% and 109% in the second and third quarters of 2002, respectively.  Second, the
+Commission’s Complaint alleged that Respondent knew that NorthWestern had not disclosed the
+nature of Expanets’ reported income during the second and third quarters of 2002, including the
+magnitude of Expanets’ reserve reductions and its receipt of unusual non-compete payments.
+Finally, the Commission’s Complaint alleged that the misstatement of Expanets’ and
+NorthWestern’s financial results facilitated more than $800 million in securities offerings by
+NorthWestern in September and October 2002, including an $87.5 million equity offering that
+raised badly needed operating capital for the company.
+IV.
+In view of the foregoing, the Commission deems it appropriate and in the public interest to
+impose the sanction agreed to in Respondent’s Offer.
+Accordingly, it is hereby ORDERED, effective immediately, that:
+A. Respondent is suspended from appearing or practicing before the Commission as an
+accountant.
+B. After three years from the date of this order, Respondent may request that the
+Commission consider his reinstatement by submitting an application (attention: Office of the
+Chief Accountant) to resume appearing or practicing before the Commission as:
+1. a preparer or reviewer, or a person responsible for the preparation or
+review, of any public company’s financial statements that are filed with the Commission.  Such
+an application must satisfy the Commission that Respondent’s work in his practice before the
+Commission will be reviewed either by the independent audit committee of the public company
+for which he works or in some other acceptable manner, as long as he practices before the
+Commission in this capacity; and/or
+2. an independent accountant.  Such an application must satisfy the
+Commission that:
+(a) Respondent, or the public accounting firm with which he is
+associated, is registered with the Public Company Accounting Oversight Board (“Board”) in
+accordance with the Sarbanes-Oxley Act of 2002, and such registration continues to be effective;
+(b) Respondent, or the registered public accounting firm with which he
+is associated, has been inspected by the Board and that inspection did not identify any criticisms
+3
+of or potential defects in the Respondent’s or the firm’s quality control system that would
+indicate that the Respondent will not receive appropriate supervision.
+(c) Respondent has resolved all disciplinary issues with the Board,
+and has complied with all terms and conditions of any sanctions imposed by the Board (other
+than reinstatement by the Commission); and
+(d) Respondent acknowledges his responsibility, as long as
+Respondent appears or practices before the Commission as an independent accountant, to
+comply with all requirements of the Commission and the Board, including, but not limited to, all
+requirements relating to registration, inspections, concurring partner reviews and quality control
+standards.
+C. The Commission will consider an application by Respondent to resume
+appearing or practicing before the Commission provided that his state CPA license is
+current and he has resolved all other disciplinary issues with the applicable state boards of
+accountancy. However, if state licensure is dependent on reinstatement by the
+Commission, the Commission will consider an application on its other merits.  The
+Commission’s review may include consideration of, in addition to the matters referenced
+above, any other matters relating to Respondent’s character, integrity, professional conduct,
+or qualifications to appear or practice before the Commission.
+ By the Commission.
+       N ancy M. Morris
+       S ecretary
+4

raw/aaer/2008/AAER-2795.pdf ADDED Viewed

Binary file (70.7 kB). View file

raw/aaer/2008/AAER-2795.txt ADDED Viewed

	@@ -0,0 +1,48 @@

+____________________________________
+UNITED STATES OF AMERICA
+ Before the
+SECURITIES AND EXCHANGE COMMISSION
+SECURITIES EXCHANGE ACT OF 1934
+Release No. 57443 / March 6, 2008
+ACCOUNTING AND AUDITING ENFORCEMENT
+Release No. 2795 / March 6, 2008
+ADMINISTRATIVE PROCEEDING
+File No. 3-12983
+:
+In the Matter of  :
+ : ORDER OF FORTHWITH
+WILLIAM J. RAUWERDINK, CPA, : SUSPENSION PURSUANT TO RULE
+ : 102(e)(2) OF THE COMMISSION’S
+Respondent.  : RULES OF PRACTICE
+____________________________________:
+I.
+The Securities and Exchange Commission deems it appropriate to issue an order of
+forthwith suspension of William J. Rauwerdink (“Rauwerdink”) pursuant to Rule 102(e)(2) of
+the Commission=s Rules of Practice [17 C.F.R. ' 200.102(e)(2)].1
+II.
+The Commission finds that:
+1. Rauwerdink is a certified public accountant in Michigan.
+2. On June 20, 2007, a judgment of conviction was entered against Rauwerdink in
+United States v. Rauwerdink, No. 03 CR 80474-2, in the United States District Court for the
+Eastern District of Michigan, finding him guilty of one count of conspiracy to commit mail
+fraud, wire fraud, and bank fraud and to make false statements to a federal agency (the
+Rule 102(e)(2) provides in pertinent part: AAny ... person who has been convicted of a felony or a
+misdemeanor involving moral turpitude shall be forthwith suspended from appearing or practicing before the
+Commission.”
+1
+Commission), and to one count of making false statements to a federal agency.  The conduct
+occurred while Rauwerdink was Chief Financial Officer of Lason, Inc., a publicly traded
+company.
+3. As a result of this conviction, Rauwerdink was sentenced to 45 months
+imprisonment in a federal penitentiary and 24 months supervised release, and ordered to pay
+restitution in the amount of $ 285,162,957.00.
+III.
+In view of the foregoing, the Commission finds that Rauwerdink has been convicted of a
+felony within the meaning of Rule 102(e)(2) of the Commission’s Rules of Practice.
+Accordingly, it is ORDERED, that William J. Rauwerdink is forthwith suspended from
+appearing or practicing before the Commission pursuant to Rule 102(e)(2) of the Commission=s
+Rules of Practice.
+By the Commission.
+Nancy M. Morris
+Secretary
+2

raw/aaer/2008/AAER-2796.txt ADDED Viewed

	@@ -0,0 +1,121 @@

+UNITED STATES OF AMERICA
+Before the
+SECURITIES AND EXCHANGE COMMISSION
+SECURITIES EXCHANGE ACT OF 1934
+Release No. 57444 / March 6, 2008
+ACCOUNTING AND AUDITING ENFORCEMENT
+Release No.  2796 / March 6, 2008
+ADMINISTRATIVE PROCEEDING
+File No. 3-12984
+In the Matter of
+RICHARD D. NYE, CPA,
+Respondent.
+ORDER INSTITUTING PUBLIC
+ADMINISTRATIVE PROCEEDINGS PURSUANT
+TO RULE 102(e) OF THE COMMISSION’S RULES
+OF PRACTICE, MAKING FINDINGS, AND
+IMPOSING REMEDIAL SANCTIONS
+I.
+The Securities and Exchange Commission (“Commission”) deems it appropriate and in the
+public interest that public administrative proceedings be, and hereby are, instituted against Richard
+D. Nye (“Respondent” or “Nye") pursuant to Rule 102(e)(3)(i) of the Commission’s Rules of
+Practice.1
+II.
+In anticipation of the institution of these proceedings, Respondent has submitted an Offer
+of Settlement (the “Offer”) which the Commission has determined to accept.  Solely for the
+Rule 102(e)(3)(i) provides, in relevant part, that:
+The Commission, with due regard to the public interest and without preliminary hearing,
+may, by order, . . . suspend from appearing or practicing before it any . . . accountant . . .
+who has been by name . . . permanently enjoined by any court of competent jurisdiction, by
+reason of his or her misconduct in an action brought by the Commission, from violating or
+aiding and abetting the violation of any provision of the Federal securities laws or of the
+rules and regulations thereunder.
+1
+purpose of these proceedings and any other proceedings brought by or on behalf of the
+Commission, or to which the Commission is a party, and without admitting or denying the findings
+herein, except as to the Commission’s jurisdiction over him and the subject matter of these
+proceedings, and the findings contained in Section III.3. below, which are admitted, Respondent
+consents to the entry of this Order Instituting Public Administrative Proceedings Pursuant to Rule
+102(e) of the Commission’s Rules of Practice, Making Findings, and Imposing Remedial
+Sanctions (“Order”), as set forth below.
+III.
+On the basis of this Order and Respondent’s Offer, the Commission finds that:
+1.	 Respondent Richard D. Nye, age 52, has held a Texas CPA license since 1979.  He served as
+Cornerstone Propane Partners, L.P.’s (“Cornerstone’s”) vice president of finance and
+administration from January 1998 until November 2002, and as acting CFO from July 2001
+until June 2002.
+2.	 Cornerstone, a Delaware limited partnership, formerly with headquarters in Watsonville,
+California, was at one time one of the nation's largest propane marketers, and at the time of
+the alleged conduct discussed herein, its units were traded on the New York Stock Exchange
+and were registered under Section 12(b) of the Securities Exchange Act of 1934 (“Exchange
+Act”).
+3.	 On February 22, 2008, a final judgment was entered against Respondent permanently
+enjoining him from future violations of Sections 10(b) and 13(b)(5) of the Exchange Act and
+Rules 10b-5 and 13b2-1 thereunder, and aiding and abetting violations of Sections 13(a),
+13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Rules 12b-20, 13a-1 and 13a-13 in
+civil S.E.C. v. Keith Baxter, et. al. (Civil Action 05-3843 RMW, N.D. Cal.).  Respondent
+was ordered to pay a $25,000 civil money penalty and was barred as an officer or director of
+a public company for three years.
+4. 	 The Commission's complaint alleged, among other things, that Respondent signed public
+filings for Cornerstone during 2000 and 2001, including the Form 10-K for 2000 and three
+Forms 10-Q for 2001.  The complaint alleged that he knew or was reckless in not knowing
+the public filings at issue failed to conform with Generally Accepted Accounting Principles
+(“GAAP”). The complaint further alleged that Cornerstone's subsidiary Coast Energy Group
+(“CEG”) had suffered a comprehensive failure to accurately and timely record transactions
+on its books and records.  The complaint further alleged that as a result Cornerstone’s
+financial statements for the periods at issue were not presented in conformity with GAAP
+because, among other things, CEG’s material transactions had not been properly recorded
+and the company’s accounting records did not accurately reflect CEG’s transactions.  The
+complaint further alleged that Cornerstone issued a false press release and Form 10-K for
+2001 that included materially false statements regarding the nature and origin of a $9.8
+million write-off associated with Cornerstone’s financial statement problems and that Nye
+knew or was reckless in not knowing that the statements were false.
+2
+IV.
+In view of the foregoing, the Commission deems it appropriate and in the public interest to
+impose the sanction agreed to in Respondent’s Offer.
+Accordingly, it is hereby ORDERED, effective immediately, that:
+A. Nye is suspended from appearing or practicing before the Commission as an
+accountant.
+B. After three years from the date of this Order, Nye may request that the Commission
+consider his reinstatement by submitting an application (attention: Office of the Chief Accountant)
+to resume appearing or practicing before the Commission as:
+1. a preparer or reviewer, or a person responsible for the preparation or
+review, of any public company’s financial statements that are filed with the Commission.
+Such an application must satisfy the Commission that Nye’s work in his practice before
+the Commission will be reviewed either by the independent audit committee of the public
+company for which he works or in some other acceptable manner, as long as he practices
+before the Commission in this capacity; and/or
+2. an independent accountant. Such an application must satisfy the
+Commission that:
+a. Nye, or the public accounting firm with which he is associated, is
+registered with the Public Company Accounting Oversight Board ("Board") in
+accordance with the Sarbanes-Oxley Act of 2002, and such registration continues
+to be effective;
+b. Nye, or the registered public accounting firm with which he is
+associated, has been inspected by the Board and that inspection did not identify
+any criticisms of or potential defects in Nye’s or the firm’s quality control system
+that would indicate that Nye will not receive appropriate supervision;
+c. Nye has resolved all disciplinary issues with the Board, and has
+complied with all terms and conditions of any sanctions imposed by the Board
+(other than reinstatement by the Commission); and
+d. Nye acknowledges his responsibility, as long as Nye appears or
+practices before the Commission as an independent accountant, to comply with all
+requirements of the Commission and the Board, including, but not limited to, all
+requirements relating to registration, inspections, concurring partner reviews and
+quality control standards.
+C. The Commission will consider an application by Nye to resume appearing or
+practicing before the Commission provided that his state CPA license is current and he has
+resolved all other disciplinary issues with the applicable state boards of accountancy.  However,
+3
+if state licensure is dependent on reinstatement by the Commission, the Commission will
+consider an application on its other merits. The Commission’s review may include consideration
+of, in addition to the matters referenced above, any other matters relating to Nye’s character,
+integrity, professional conduct, or qualifications to appear or practice before the Commission.
+     By the Commission.
+Nancy M. Morris
+Secretary
+4

raw/aaer/2008/AAER-2797.txt ADDED Viewed

	@@ -0,0 +1,128 @@

+ UNITED STATES OF AMERICA
+ before the
+SECURITIES AND EXCHANGE COMMISSION
+SECURITIES EXCHANGE ACT OF 1934
+Release No.  57490 / March 13, 2008
+ACCOUNTING AND AUDITING ENFORCEMENT
+Release No.  2797 / March 13, 2008
+ADMINISTRATIVE PROCEEDING
+File No. 3-12989
+:
+:
+In the Matter of : ORDER INSTITUTING ADMINISTRATIVE
+: PROCEEDINGS PURSUANT TO RULE
+GARY THOMAS SCHERPING, CPA
+Respondent.
+:
+:
+:
+:
+102(e) OF THE COMMISSION’S RULES OF
+PRACTICE, MAKING FINDINGS, AND
+IMPOSING REMEDIAL SANCTIONS
+____________________________________ :
+I.
+The Securities and Exchange Commission (“Commission”) deems it appropriate and in
+the public interest that public administrative proceedings be, and hereby are, instituted against
+Gary Thomas Scherping, CPA (“Respondent” or “Scherping”) pursuant to Rule 102(e)(3)(i) of
+the Commission’s Rules of Practice.1
+II.
+In anticipation of the institution of these proceedings, Respondent has submitted an
+Offer of Settlement (the “Offer”) which the Commission has determined to accept.  Solely for
+the purpose of these proceedings and any other proceedings brought by or on behalf of the
+Commission, or to which the Commission is a party, and without admitting or denying the
+findings herein, except as to the Commission’s jurisdiction over him and the subject matter of
+1 Rule 102(e)(3)(i) provides, in relevant part, that:
+The Commission, with due regard to the public interest and without preliminary
+hearing, may, by order, … suspend from  appearing or practicing before it any . . . accountant
+. . . who has been by name . . . permanently enjoined by any court of competent jurisdiction,
+by reason of his or her misconduct in an action brought by the Commission, from violating or
+aiding and abetting the violation of any provision of the Federal securities laws or of the rules
+and regulations thereunder.
+these proceedings, and the findings contained in paragraph III.3 below, which are admitted,
+Respondent consents to the entry of this Order Instituting Administrative Proceedings Pursuant
+to Rule 102(e) of the Commission’s Rules of Practice, Making Findings, and Imposing
+Remedial Sanctions (the “Order”), as set forth below.
+III.
+On the basis of this Order and Respondent’s Offer, the Commission finds that:
+1. Scherping, CPA, age 48, was a certified public accountant licensed to practice in
+the State of Colorado from June 29, 1988 to May 31, 1998, when his license lapsed.  He was
+Executive Vice President of Finance and Chief Financial Officer of Quovadx, Inc. (“Quovadx”
+or the “Company”) from approximately September 2000 until April 2004.
+2. Quovadx, a Delaware corporation headquartered in Englewood, Colorado, was a
+software company that licensed software and sold related services to the healthcare industry.  At
+all relevant times, Quovadx’s common stock was registered with the Commission under
+Section 12(g) of the Securities Exchange Act of 1934 (the “Exchange Act”) and traded on the
+NASDAQ.
+3. On February 29, 2008, a final judgment was entered against Scherping,
+permanently enjoining him from violating, directly or indirectly, Section 17(a) of the Securities
+Act of 1933 (the “Securities Act”), Sections 10(b) and 13(b)(5) of the Exchange Act and
+Rules 10b-5, 13a-14, 13b2-1 and 13b2-2 thereunder, and from aiding and abetting any violation
+of Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Rules 12b-20, 13a-1,
+13a-11 and 13a-13 thereunder, in the civil action entitled Securities and Exchange Commission
+v. Gary Thomas Scherping, Civil Action No. 1:07-cv-01511-WYD-MEH, in the United States
+District Court for the District of Colorado.  Scherping was also ordered to pay a $70,000 civil
+money penalty and prohibited from acting as an officer or director for five years.
+4. The Commission’s Complaint alleged, among other things, that between the
+second and fourth quarters of 2003, Quovadx fraudulently recognized over $12 million in
+software licensing revenue from transactions with three different third parties, overstating its
+software licensing revenue by proportions ranging from approximately 9 percent to nearly 180
+percent. The Complaint alleged that Scherping knew or was reckless in not knowing that
+Quovadx could not recognize the revenue from these transactions.  The Complaint also alleged
+that Quovadx prematurely recognized $250,000 in revenue into the third quarter of 2002,
+overstating its software licensing revenue by 10 percent for that quarter.  The Complaint
+alleged that Scherping knowingly provided substantial assistance to Quovadx in improperly
+accelerating this revenue. The Complaint further alleged that Scherping made false
+representations in letters to Quovadx’s auditors about these transactions and that he signed
+false disclosure certifications in connection with the Company’s reports on Form 10-Q for the
+pertinent quarters and its annual report on Form 10-K for 2003.  Finally, the Complaint alleged
+that Scherping circumvented internal accounting controls and falsified books and records in
+connection with these transactions.
+2
+IV.
+In view of the foregoing, the Commission deems it appropriate and in the public interest
+to impose the sanction agreed to in Respondent Scherping’s Offer.
+Accordingly, it is hereby ORDERED, effective immediately, that:
+A. Scherping is suspended from appearing or practicing before the Commission as
+an accountant.
+B. After five years from the date of this order, Scherping may request that the
+Commission consider his reinstatement by submitting an application (attention: Office of
+the Chief Accountant) to resume appearing or practicing before the Commission as:
+1. a preparer or reviewer, or a person responsible for the preparation or review, of
+any public company’s financial statements that are filed with the Commission.  Such an
+application must satisfy the Commission that Respondent’s work in his practice before the
+Commission will be reviewed either by the independent audit committee of the public
+company for which he works or in some other acceptable manner, as long as he practices
+before the Commission in this capacity; and/or
+2. an independent accountant.  Such an application must satisfy the
+Commission that:
+(a) Respondent, or the public accounting firm with which he is associated,
+is registered with the Public Company Accounting Oversight Board (the “Board”) in
+accordance with the Sarbanes-Oxley Act of 2002, and such registration continues to be
+effective;
+(b) Respondent, or the registered public accounting firm with which he is
+associated, has been inspected by the Board and that inspection did not identify any criticisms
+of or potential defects in the Respondent’s or the firm’s quality control system that would
+indicate that the Respondent will not receive appropriate supervision;
+(c) Respondent has resolved all disciplinary issues with the Board, and has
+complied with all terms and conditions of any sanctions imposed by the Board (other than
+reinstatement by the Commission); and
+(d) Respondent acknowledges his responsibility, as long as Respondent
+appears or practices before the Commission as an independent accountant, to comply with all
+requirements of the Commission and the Board including, but not limited to, all requirements
+relating to registration, inspections, concurring partner reviews and quality control standards.
+C. The Commission will consider an application by Respondent to resume
+appearing or practicing before the Commission provided that his state CPA license is
+3
+current and he has resolved all other disciplinary issues with the applicable state boards
+of accountancy. However, if state licensure is dependent on reinstatement by the
+Commission, the Commission will consider an application on its other merits.  The
+Commission’s review may include consideration of, in addition to the matters
+referenced above, any other matters relating to Respondent’s character, integrity,
+professional conduct, or qualifications to appear or practice before the Commission.
+ By the Commission.
+       N ancy M. Morris
+       S ecretary
+4

raw/aaer/2008/AAER-2798.txt ADDED Viewed

	@@ -0,0 +1,1383 @@

+     SEC.gov | Lorine Sweeney and Gary Scherping
+         !function(){var e=navigator.userAgent,a=document.documentElement,n=a.className;n=n.replace("no-js","js"),/iPad|iPhone|iPod/.test(e)&&!window.MSStream&&(n+=" ua-ios"),a.className=n}();
+     {"path":{"baseUrl":"\/","pathPrefix":"","currentPath":"node\/503026","currentPathIsAdmin":false,"isFront":false,"currentLanguage":"en"},"pluralDelimiter":"\u0003","suppressDeprecationErrors":true,"gtag":{"tagId":"","consentMode":false,"otherIds":[],"events":[],"additionalConfigInfo":[]},"ajaxPageState":{"libraries":"eJxdT0GOwzAI_JBdn_oei2DkeINNZLC22devlaZS2wtiBhhmcKNUTPo97jxyaXEH3GJpiZrFhQW38A4cMqgeYQGlV19JFTKpQ-kUmvQKXP7I0cO4tC2kPnbg2wVdFslM0SCHPMs3vsEPPD7J6hgOGdPCKJyoRxxqUuePHjLLAuzVjimenRJGSLW08NoBK9LUn6SHlrytVOlcpJShB63QLSpBx_WkOzHNePol4fRQo_qMPvQ36ZXsAmd99lMNr2t_GUR9n60EyX9a_wePd5ns","theme":"uswds_sec","theme_token":null},"ajaxTrustedUrl":[],"gtm":{"tagId":null,"settings":{"data_layer":"dataLayer","include_classes":false,"allowlist_classes":"","blocklist_classes":"","include_environment":false,"environment_id":"","environment_token":""},"tagIds":["GTM-TD3BKV"]},"data":{"extlink":{"extTarget":false,"extTargetAppendNewWindowDisplay":true,"extTargetAppendNewWindowLabel":"(opens in a new window)","extTargetNoOverride":false,"extNofollow":false,"extTitleNoOverride":false,"extNoreferrer":false,"extFollowNoOverride":false,"extClass":"0","extLabel":"(link is external)","extImgClass":false,"extSubdomains":true,"extExclude":".*\\.gov|http:\/\/www.xbrl.org\/utr\/2013-05-17\/utr.xml|http:\/\/www.xbrl.org\/dtr\/type\/numeric-2009-12-16.xsd|http:\/\/www.xbrl.org\/dtr\/type\/nonNumeric-2009-12-16.xsd|https:\/\/secir.secure.force.com\/ombudsman\/OMMSForm","extInclude":"","extCssExclude":".data-exempt","extCssInclude":"","extCssExplicit":"","extAlert":true,"extAlertText":"You are now leaving the SEC Website. The link you have selected is located on another server. Please click on the OK button below to proceed to the selected site. The SEC does not endorse this web site, its sponsor, or any of the policies, activities, products, or services offered on the site or by any advertiser on the site.","extHideIcons":false,"mailtoClass":"0","telClass":"","mailtoLabel":"(link sends email)","telLabel":"(link is a phone number)","extUseFontAwesome":false,"extIconPlacement":"append","extPreventOrphan":false,"extFaLinkClasses":"fa fa-external-link","extFaMailtoClasses":"fa fa-envelope-o","extAdditionalLinkClasses":"","extAdditionalMailtoClasses":"","extAdditionalTelClasses":"","extFaTelClasses":"fa fa-phone","allowedDomains":null,"extExcludeNoreferrer":""}},"user":{"uid":0,"permissionsHash":"e506dfd1572f94bd1f339f1a7483bfbded31d4a9d2bdfdca3fdbc235153380ee"}}
+      Skip to search field
+      Skip to main content
+           An official website of the United States government
+           Here’s how you know
+           Here’s how you know
+                Official websites use .gov
+                              A  .gov  website belongs to an official government organization in the United States.
+                Secure .gov websites use HTTPS
+              A  lock
+              (   Lock  A locked padlock    )
+              or  https://  means you’ve safely connected to the .gov website. Share sensitive information only on official, secure websites.
+                     SEC homepage
+        Menu
+          Close
+     Search SEC.gov &amp; EDGAR
+       Search
+             Search Filings
+           Search Filings
+                             Full Text Search
+                             Latest Filings
+                             Mutual Fund Search
+                             Variable Insurance Products Search
+                             SIC Codes
+                             CIK Lookup
+                             Public Dissemination Service (PDS)
+                             Search Assistance
+             Submit Filings
+           Submit Filings
+                             EDGAR Filer Management Portal
+                             EDGAR Filing Portal
+                             Online Forms Management Portal
+                             EDGAR Next
+                             Forms Index
+                             Filer Support &amp; Resources
+             Data &amp; Research
+           Data &amp; Research
+                             Data Library
+                             Statistics &amp; Data Visualizations
+                             Structured Data
+                             Investment Management Data
+                             Open Data at the SEC
+             Rules, Enforcement, &amp; Compliance
+           Rules &amp; Regulations
+                             Rulemaking Activity
+                             Submit Public Comments
+                             Staff Guidance
+                             No-Action, Interpretive, and Exemptive Letters
+                             Self-Regulatory Organization Rulemaking
+                             Public Petitions for Rulemaking
+           Enforcement &amp; Litigation
+                             Litigation Releases
+                             Administrative Proceedings
+                             Administrative Law Judge Orders and Initial Decisions
+                             Trading Suspensions
+                             Distributions to Harmed Investors
+                             Receiverships
+           Compliance
+                             Examination Priorities
+                             Risk Alerts
+                             Compliance Outreach Program
+                             Proposed Rules
+                             What&#039;s New
+                             Whistleblower Program
+             Featured Topics
+           Featured Topics
+                             Crypto Task Force
+                             Cybersecurity
+                             Market Structure Analytics
+                             Saving and Investing for Military Personnel
+                             Saving and Investing for Teachers
+                             SEC-CFTC Harmonization Initiative
+                             Treasury Clearing Implementation
+             About
+           About
+                             Mission
+                             Commissioners
+                             Divisions &amp; Offices
+                             Division &amp; Office Directors
+                             Advisory Committees
+                             Budget &amp; Performance
+                             Reports &amp; Publications
+                             Commission Votes
+                             Contact the SEC
+                             Careers
+                             Submit a Tip or Complaint
+                           Newsroom
+                           |
+                           Investors
+                           Small Businesses
+                           Whistleblowers
+                           Newsroom
+                           |
+                           Investors
+                           Small Businesses
+                           Whistleblowers
+     Search SEC.gov &amp; EDGAR
+       Search
+        More in this Section
+                 Enforcement &amp; Litigation
+           Litigation Releases
+           Administrative Proceedings
+           Administrative Law Judge Orders and Initial Decisions
+           Trading Suspensions
+           Distributions to Harmed Investors
+           Receiverships
+           Electronic Filings in Administrative Proceedings (eFAP)
+           Rules of Practice
+           Applications for Reentry
+           Reports of Investigations
+           Whistleblower Program
+           Public Alert: Unregistered Soliciting Entities (PAUSE)
+           SEC Action Lookup - Individuals (SALI)
+           Enforcement Data Delivery Standards
+           Small Businesses
+           Appellate Briefs
+           Amicus / Friend of the Court Briefs
+                 Enforcement &amp; Litigation
+           Litigation Releases
+           Administrative Proceedings
+           Administrative Law Judge Orders and Initial Decisions
+           Trading Suspensions
+           Distributions to Harmed Investors
+           Receiverships
+           Electronic Filings in Administrative Proceedings (eFAP)
+           Rules of Practice
+           Applications for Reentry
+           Reports of Investigations
+           Whistleblower Program
+           Public Alert: Unregistered Soliciting Entities (PAUSE)
+           SEC Action Lookup - Individuals (SALI)
+           Enforcement Data Delivery Standards
+           Small Businesses
+           Appellate Briefs
+           Amicus / Friend of the Court Briefs
+               Home
+               Enforcement and Litigation
+               Litigation Releases
+              Lorine Sweeney and Gary Scherping
+        Lorine Sweeney and Gary Scherping
+                   U.S. SECURITIES AND EXCHANGE COMMISSION
+ Litigation Release No. 20493 / March 13, 2008
+ Accounting and Auditing Enforcement Release No. 2798 / March 13, 2008
+  SEC v. Lorine Sweeney and Gary Scherping , Civ. No. 07-CV-01511 (WYD-MEH) (D. Colo.)
+ Former CEO and CFO of Quovadx, Inc., Lorine R. Sweeney and Gary T. Scherping, Agree to Settle SEC Action Charging Them With Fraudulent Revenue Recognition in 2003; Relief Includes Officer-And-Director Bars and Civil Penalties
+ The Commission announced today that final judgments were entered on February 29, 2008, against Lorine R. Sweeney and Gary T. Scherping, the former CEO and CFO of Quovadx, Inc., in the SEC's enforcement action charging them with orchestrating a fraudulent revenue recognition scheme at the company during 2003.  The final judgments permanently enjoin them from violating the antifraud provisions of the federal securities laws, circumventing internal controls, falsifying books and records, making false statements to an auditor, and falsely certifying public filings (Section 17(a) of the Securities Act of 1933 and Sections 10(b) and 13(b)(5) of the Securities Exchange Act of 1934 and Rules 10b-5, 13b2-1, 13b2-2, and 13a-14, thereunder), as well as aiding and abetting violations of the reporting, books and records, and internal control provisions of the Exchange Act (Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) and Rules 12b-20, 13a-1, 13a-11, and 13a-13).  They also impose five-year officer and director bars and a $75,000 civil penalty against Sweeney and a $70,000 civil penalty against Scherping.  Without admitting or denying the allegations of the Commission's previously-filed complaint, Sweeney and Scherping consented to the entry of the final judgments.
+ The Commission's complaint alleges that Sweeney and Scherping orchestrated the fraudulent recognition of over $12 million in software licensing revenue between the second and fourth quarters of 2003, by Quovadx, then a Colorado-based software development and licensing company (now known as Healthvision).  The complaint alleges that, as a result, Quovadx overstated its software revenue by approximately 9 percent to nearly 180 percent.  The Complaint also alleges that Sweeney and Scherping aided and abetted Quovadx's premature recognition of $250,000 in revenue into the third quarter of 2002, overstating its software licensing revenue by 10 percent for that quarter.  The Complaint further alleges that Sweeney and Scherping made false representations to Quovadx's auditor and signed false disclosure certifications in connection with Quovadx's reports on Form 10-Q for the pertinent quarters and its annual report on Form 10-K for 2003.  Finally, the Complaint alleges that Sweeney and Scherping circumvented internal accounting controls and falsified books and records in connection with the improper transactions.
+ In a related enforcement action, the Commission instituted today a settled proceeding against Scherping pursuant to Rule 102(e) of the Commission's Rules of Practice, suspending him from the privilege of appearing or practicing before the Commission as an accountant, with the right to apply for reinstatement after five years. Exchange Act Release No. 34- 57490 (March 13, 2008).
+ The Commission had previously brought settled enforcement proceedings against Quovadx, the principal officers and employees of Quovadx involved in the revenue recognition fraud, and the principals of the third-parties who aided and abetted that fraud.  The settlements with Sweeney and Scherping conclude the Commission's investigation into this matter.
+ For additional information, see below:
+   Litigation Release No. 20197  (July 18, 2007).
+  Securities Act Release No. 33-8825  (July 17, 2007) (Quovadx)
+  Exchange Act Release No. 34-56083  (July 17, 2007) (Renjilian)
+  Exchange Act Release No. 34-56084  (July 17, 2007) (Davis)
+  Exchange Act Release No. 34-56334  (August 29, 2007) (Collins)
+  SEC Complaint  (Sweeney and Scherping)
+           Return to top
+                 SEC homepage
+                                                     About the SEC
+           Budget &amp; Performance
+           Careers
+           Commission Votes
+           Contact
+           Contracts
+                                                     Transparency
+           Accessibility &amp; Disability
+           Super Intelligence
+           FOIA
+           Inspector General
+           No FEAR Act Data
+           Ombuds
+           SEC Excess Personal Property Guidance
+                                                     Websites
+           Investor.gov
+           Related Sites
+           USA.gov
+                                                     Site Information
+           Plain Writing
+           Privacy &amp; Security
+           Site Map
+               Stay connected. Sign up for email updates.
+   Your email address
+   Sign Up
+                 X
+                 Facebook
+               Instagram
+                 RSS
+                 YouTube
+               Email Updates

raw/aaer/2008/AAER-2799.txt ADDED Viewed

	@@ -0,0 +1,1385 @@

+     SEC.gov | Gary L. Monroe, William J. Rauwerdink, John R. Messinger and Robert T. Bassman
+         !function(){var e=navigator.userAgent,a=document.documentElement,n=a.className;n=n.replace("no-js","js"),/iPad|iPhone|iPod/.test(e)&&!window.MSStream&&(n+=" ua-ios"),a.className=n}();
+     {"path":{"baseUrl":"\/","pathPrefix":"","currentPath":"node\/503036","currentPathIsAdmin":false,"isFront":false,"currentLanguage":"en"},"pluralDelimiter":"\u0003","suppressDeprecationErrors":true,"gtag":{"tagId":"","consentMode":false,"otherIds":[],"events":[],"additionalConfigInfo":[]},"ajaxPageState":{"libraries":"eJxdT0GOwzAI_JBdn_oei2DkeINNZLC22devlaZS2wtiBhhmcKNUTPo97jxyaXEH3GJpiZrFhQW38A4cMqgeYQGlV19JFTKpQ-kUmvQKXP7I0cO4tC2kPnbg2wVdFslM0SCHPMs3vsEPPD7J6hgOGdPCKJyoRxxqUuePHjLLAuzVjimenRJGSLW08NoBK9LUn6SHlrytVOlcpJShB63QLSpBx_WkOzHNePol4fRQo_qMPvQ36ZXsAmd99lMNr2t_GUR9n60EyX9a_wePd5ns","theme":"uswds_sec","theme_token":null},"ajaxTrustedUrl":[],"gtm":{"tagId":null,"settings":{"data_layer":"dataLayer","include_classes":false,"allowlist_classes":"","blocklist_classes":"","include_environment":false,"environment_id":"","environment_token":""},"tagIds":["GTM-TD3BKV"]},"data":{"extlink":{"extTarget":false,"extTargetAppendNewWindowDisplay":true,"extTargetAppendNewWindowLabel":"(opens in a new window)","extTargetNoOverride":false,"extNofollow":false,"extTitleNoOverride":false,"extNoreferrer":false,"extFollowNoOverride":false,"extClass":"0","extLabel":"(link is external)","extImgClass":false,"extSubdomains":true,"extExclude":".*\\.gov|http:\/\/www.xbrl.org\/utr\/2013-05-17\/utr.xml|http:\/\/www.xbrl.org\/dtr\/type\/numeric-2009-12-16.xsd|http:\/\/www.xbrl.org\/dtr\/type\/nonNumeric-2009-12-16.xsd|https:\/\/secir.secure.force.com\/ombudsman\/OMMSForm","extInclude":"","extCssExclude":".data-exempt","extCssInclude":"","extCssExplicit":"","extAlert":true,"extAlertText":"You are now leaving the SEC Website. The link you have selected is located on another server. Please click on the OK button below to proceed to the selected site. The SEC does not endorse this web site, its sponsor, or any of the policies, activities, products, or services offered on the site or by any advertiser on the site.","extHideIcons":false,"mailtoClass":"0","telClass":"","mailtoLabel":"(link sends email)","telLabel":"(link is a phone number)","extUseFontAwesome":false,"extIconPlacement":"append","extPreventOrphan":false,"extFaLinkClasses":"fa fa-external-link","extFaMailtoClasses":"fa fa-envelope-o","extAdditionalLinkClasses":"","extAdditionalMailtoClasses":"","extAdditionalTelClasses":"","extFaTelClasses":"fa fa-phone","allowedDomains":null,"extExcludeNoreferrer":""}},"user":{"uid":0,"permissionsHash":"e506dfd1572f94bd1f339f1a7483bfbded31d4a9d2bdfdca3fdbc235153380ee"}}
+      Skip to search field
+      Skip to main content
+           An official website of the United States government
+           Here’s how you know
+           Here’s how you know
+                Official websites use .gov
+                              A  .gov  website belongs to an official government organization in the United States.
+                Secure .gov websites use HTTPS
+              A  lock
+              (   Lock  A locked padlock    )
+              or  https://  means you’ve safely connected to the .gov website. Share sensitive information only on official, secure websites.
+                     SEC homepage
+        Menu
+          Close
+     Search SEC.gov &amp; EDGAR
+       Search
+             Search Filings
+           Search Filings
+                             Full Text Search
+                             Latest Filings
+                             Mutual Fund Search
+                             Variable Insurance Products Search
+                             SIC Codes
+                             CIK Lookup
+                             Public Dissemination Service (PDS)
+                             Search Assistance
+             Submit Filings
+           Submit Filings
+                             EDGAR Filer Management Portal
+                             EDGAR Filing Portal
+                             Online Forms Management Portal
+                             EDGAR Next
+                             Forms Index
+                             Filer Support &amp; Resources
+             Data &amp; Research
+           Data &amp; Research
+                             Data Library
+                             Statistics &amp; Data Visualizations
+                             Structured Data
+                             Investment Management Data
+                             Open Data at the SEC
+             Rules, Enforcement, &amp; Compliance
+           Rules &amp; Regulations
+                             Rulemaking Activity
+                             Submit Public Comments
+                             Staff Guidance
+                             No-Action, Interpretive, and Exemptive Letters
+                             Self-Regulatory Organization Rulemaking
+                             Public Petitions for Rulemaking
+           Enforcement &amp; Litigation
+                             Litigation Releases
+                             Administrative Proceedings
+                             Administrative Law Judge Orders and Initial Decisions
+                             Trading Suspensions
+                             Distributions to Harmed Investors
+                             Receiverships
+           Compliance
+                             Examination Priorities
+                             Risk Alerts
+                             Compliance Outreach Program
+                             Proposed Rules
+                             What&#039;s New
+                             Whistleblower Program
+             Featured Topics
+           Featured Topics
+                             Crypto Task Force
+                             Cybersecurity
+                             Market Structure Analytics
+                             Saving and Investing for Military Personnel
+                             Saving and Investing for Teachers
+                             SEC-CFTC Harmonization Initiative
+                             Treasury Clearing Implementation
+             About
+           About
+                             Mission
+                             Commissioners
+                             Divisions &amp; Offices
+                             Division &amp; Office Directors
+                             Advisory Committees
+                             Budget &amp; Performance
+                             Reports &amp; Publications
+                             Commission Votes
+                             Contact the SEC
+                             Careers
+                             Submit a Tip or Complaint
+                           Newsroom
+                           |
+                           Investors
+                           Small Businesses
+                           Whistleblowers
+                           Newsroom
+                           |
+                           Investors
+                           Small Businesses
+                           Whistleblowers
+     Search SEC.gov &amp; EDGAR
+       Search
+        More in this Section
+                 Enforcement &amp; Litigation
+           Litigation Releases
+           Administrative Proceedings
+           Administrative Law Judge Orders and Initial Decisions
+           Trading Suspensions
+           Distributions to Harmed Investors
+           Receiverships
+           Electronic Filings in Administrative Proceedings (eFAP)
+           Rules of Practice
+           Applications for Reentry
+           Reports of Investigations
+           Whistleblower Program
+           Public Alert: Unregistered Soliciting Entities (PAUSE)
+           SEC Action Lookup - Individuals (SALI)
+           Enforcement Data Delivery Standards
+           Small Businesses
+           Appellate Briefs
+           Amicus / Friend of the Court Briefs
+                 Enforcement &amp; Litigation
+           Litigation Releases
+           Administrative Proceedings
+           Administrative Law Judge Orders and Initial Decisions
+           Trading Suspensions
+           Distributions to Harmed Investors
+           Receiverships
+           Electronic Filings in Administrative Proceedings (eFAP)
+           Rules of Practice
+           Applications for Reentry
+           Reports of Investigations
+           Whistleblower Program
+           Public Alert: Unregistered Soliciting Entities (PAUSE)
+           SEC Action Lookup - Individuals (SALI)
+           Enforcement Data Delivery Standards
+           Small Businesses
+           Appellate Briefs
+           Amicus / Friend of the Court Briefs
+               Home
+               Enforcement and Litigation
+               Litigation Releases
+              Gary L. Monroe, William J. Rauwerdink, John R. Messinger and Robert T. Bassman
+        Gary L. Monroe, William J. Rauwerdink, John R. Messinger and Robert T. Bassman
+                   UNITED STATES SECURITIES AND EXCHANGE COMMISSION
+ Litigation Release No. 20495 / March  13, 2008
+ Accounting and Auditing Enforcement Release No.  2799 / March 13, 2008
+  SECURITIES AND EXCHANGE COMMISSION v. GARY L. MONROE, WILLIAM J. RAUWERDINK, JOHN R. MESSINGER and ROBERT T. BASSMAN , Civil Action No. 03-71840 (E.D. Mich.)
+ SEC Settles Financial Fraud Charges Against Former Officers Of Lason, Inc.
+ The Securities and Exchange Commission announced that on March 7, 2008, the Honorable Arthur J. Tarnow of the U.S. District Court for the Eastern District of Michigan, entered Final Judgments against Gary L. Monroe, William J. Rauwerdink, John R. Messinger, and Robert T. Bassman, the former CEO, CFO, COO and Controller, respectively, of Lason, Inc., a document management company based in Troy, Michigan.  The Final Judgments permanently enjoin the defendants from violating the anti-fraud and record-keeping provisions of the federal securities laws and bar the defendants from serving as officers or directors of public companies.  In addition, the Final Judgment against Bassman orders him to pay disgorgement and prejudgment interest of $240,761.70, payment of all but $35,000 of which is waived on the basis of his financial condition.  The defendants consented to the entry of the Final Judgments without admitting or denying the Commission's allegations against them.
+ The Commission's complaint alleged that during 1998 and 1999, the defendants engaged in a fraudulent scheme to overstate Lason's earnings in order to meet or exceed Wall Street expectations.  The scheme culminated in the third quarter of 1999, when Lason's earnings were overstated by approximately 65%.
+ According to the complaint:
+  In a scheme called "tailwind," Monroe and Rauwerdink instructed companies that were acquired by Lason to delay recognizing revenue until after the acquisition was completed and to pre-pay certain expenses before the acquisition, thereby artificially increasing Lason's earnings during the first, third and fourth quarters of 1998.
+ Monroe, Rauwerdink and Bassman improperly booked a forgiven loan as revenue for Lason in the fourth quarter of 1998.
+ Lason improperly claimed an invalid invoice as a legitimate receivable in the fourth quarter of 1998.  When Lason's auditors questioned the legitimacy of the receivable, Monroe, Messinger and Bassman developed a scheme to obtain a check that improperly appeared to make payment on the receivable.
+ Lason made numerous fraudulent accounting entries in 1999, culminating in fraudulent Work in Process entries in the third quarter of 1999 that artificially boosted Lason's earnings by 65%.
+ The defendants profited from the scheme through their salaries as well as bonuses, stock options and executive loans that were affected by Lason's artificially inflated stock price.
+  In 2007, in a related criminal action, Monroe and Messinger pled guilty to making false statements to a federal agency (the Commission) and Rauwerdink pled guilty to conspiracy and making false statements to a federal agency.  Monroe, Messinger and Rauwerdink were sentenced to 15 months, 12 months, and 45 months imprisonment respectively.  In addition, Monroe and Messinger were ordered to pay restitution of $20 million, and Rauwerdink was ordered to pay restitution of $285 million.
+ In related administrative proceedings, Bassman consented to an order under Rule 102(e) of the Commission's Rules of Practice suspending him from appearing or practicing before the Commission as an accountant for three years based on the entry of an injunction against him, and the Commission suspended Rauwerdink forthwith based on his criminal conviction, pursuant to Rule 102(e)(2).
+ The Commission wishes to thank the U.S. Attorney's Office for the Eastern District of Michigan and the Federal Bureau of Investigation for their assistance in this matter.
+           Return to top
+                 SEC homepage
+                                                     About the SEC
+           Budget &amp; Performance
+           Careers
+           Commission Votes
+           Contact
+           Contracts
+                                                     Transparency
+           Accessibility &amp; Disability
+           Super Intelligence
+           FOIA
+           Inspector General
+           No FEAR Act Data
+           Ombuds
+           SEC Excess Personal Property Guidance
+                                                     Websites
+           Investor.gov
+           Related Sites
+           USA.gov
+                                                     Site Information
+           Plain Writing
+           Privacy &amp; Security
+           Site Map
+               Stay connected. Sign up for email updates.
+   Your email address
+   Sign Up
+                 X
+                 Facebook
+               Instagram
+                 RSS
+                 YouTube
+               Email Updates

raw/aaer/2008/AAER-2800.txt ADDED Viewed

	@@ -0,0 +1,123 @@

+ UNITED STATES OF AMERICA
+ before the
+SECURITIES AND EXCHANGE COMMISSION
+SECURITIES EXCHANGE ACT OF 1934
+Release No. 57516 / March 18, 2008
+ACCOUNTING AND AUDITING ENFORCEMENT
+Release No.  2800 / March 18, 2008
+ADMINISTRATIVE PROCEEDING
+File No. 3-12993
+:
+:
+:
+In the Matter of : ORDER INSTITUTING ADMINISTRATIVE
+: PROCEEDINGS PURSUANT TO RULE
+ROBERT T. BASSMAN, CPA, : 102(e) OF THE COMMISSION’S RULES OF
+: PRACTICE, MAKING FINDINGS, AND
+Respondent. : IMPOSING REMEDIAL SANCTIONS
+:
+____________________________________ :
+I.
+The Securities and Exchange Commission (“Commission”) deems it appropriate and in the
+public interest that public administrative proceedings be, and hereby are, instituted against Robert
+T. Bassman (“Respondent” or “Bassman”) pursuant to Rule 102(e)(3)(i) of the Commission’s
+Rules of Practice.1
+II.
+In anticipation of the institution of these proceedings, Respondent has submitted an Offer
+of Settlement (the “Offer”) which the Commission has determined to accept.  Solely for the
+1 Rule 102(e)(3)(i) provides, in relevant part, that:
+The Commission, with due regard to the public interest and without preliminary hearing,
+may, by order, . . . suspend from appearing or practicing before it any . . . accountant . . . who has
+been by name . . . permanently enjoined by any court of competent jurisdiction, by reason of his
+or her misconduct in an action brought by the Commission, from violating or aiding and abetting
+the violation of any provision of the Federal securities laws or of the rules and regulations
+thereunder.
+purpose of these proceedings and any other proceedings brought by or on behalf of the
+Commission, or to which the Commission is a party, and without admitting or denying the findings
+herein, except as to the Commission’s jurisdiction over him and the subject matter of these
+proceedings, and the findings contained in Section III. 3 below, which are admitted, Respondent
+consents to the entry of this Order Instituting Administrative Proceedings Pursuant to Rule 102(e)
+of the Commission’s Rules of Practice, Making Findings, and Imposing Remedial Sanctions
+(“Order”), as set forth below.
+III.
+On the basis of this Order and Respondent’s Offer, the Commission finds that:
+1. Bassman, age 48, is and has been a certified public accountant licensed to
+practice in the State of Michigan.  He served as Assistant Controller of Lason, Inc. (“Lason”) from
+September 1996 to 1997 and as Controller from 1997 until October 2000.
+2. Lason was, at all relevant times, a Delaware corporation with its principal
+place of business in Troy, Michigan.  Lason was engaged in the business of data management,
+copying, document imaging and mail sorting. At all relevant times, Lason’s common stock was
+registered with the Commission pursuant to Section 12(b) of the Securities Exchange Act of 1934
+(“Exchange Act”), and traded on the NASDAQ National Market.
+3. On March 7, 2008, a final judgment was entered against Bassman,
+permanently enjoining him from future violations of Sections 17(a)(1), 17(a)(2), and 17(a)(3) of
+the Securities Act of 1933, Sections 10(b) and 13(b)(5) of the Exchange Act and Rules 10b-5,
+13b2-1 and 13b2-2 thereunder, and aiding and abetting violations of Sections 13(a), 13(b)(2)(A)
+and 13(b)(2)(B) of the Exchange Act and Rules 12b-20, 13a-1 and 13a-13 thereunder, in the civil
+action entitled Securities and Exchange Commission v. Gary L. Monroe, et al., Civil Action
+Number 03-71840, in the United States District Court for the Eastern District of Michigan.
+Bassman was also ordered to pay $240,761.70 in disgorgement and prejudgment interest, but
+payment of all but $35,000.00 in disgorgement was waived and no civil money penalty was
+imposed based on sworn representations made by Bassman in his Statement of Financial
+Condition.
+4. The Commission’s complaint alleged, among other things, that Bassman,
+at the direction of the former President, Chief Financial Officer and Chief Operating Officer of
+Lason, engaged in a fraudulent scheme which resulted in Lason filing materially false and
+misleading financial statements in the company’s annual report on Form 10-K for the fiscal year
+ended December 31, 1998, and in the company’s quarterly reports on Form 10-Q for the first and
+third quarters of fiscal year 1999.  The Complaint alleged that Bassman engaged in a number of
+improper accounting practices that materially increased Lason’s annual and quarterly revenue and
+net income in a departure from generally accepted accounting principles (“GAAP”).  These
+practices included, among other things, recognizing revenue on forgiven debt that should have
+been used to reduce goodwill, recognizing revenue from an uncollectible invoice, and recognizing
+revenue from unsupportable work in process estimates.  In addition, the complaint alleged that
+2
+Bassman failed to disclose information in response to questions by Lason’s independent
+auditors about certain of Lason’s fraudulent revenue recognition practices.
+IV.
+In view of the foregoing, the Commission deems it appropriate and in the public interest to
+impose the sanction agreed to in Respondent Bassman’s Offer.
+Accordingly, it is hereby ORDERED, effective immediately, that:
+A. Bassman is suspended from appearing or practicing before the Commission as an
+accountant.
+B. After 3 years from the date of this order, Respondent may request that the
+Commission consider his reinstatement by submitting an application (attention: Office of the
+Chief Accountant) to resume appearing or practicing before the Commission as:
+1. a preparer or reviewer, or a person responsible for the preparation or
+review, of any public company’s financial statements that are filed with the Commission.  Such
+an application must satisfy the Commission that Respondent’s work in his practice before the
+Commission will be reviewed either by the independent audit committee of the public company
+for which he works or in some other acceptable manner, as long as he practices before the
+Commission in this capacity; and/or
+2. an independent accountant.  Such an application must satisfy the
+Commission that:
+(a) Respondent, or the public accounting firm with which he is
+associated, is registered with the Public Company Accounting Oversight Board (“Board”) in
+accordance with the Sarbanes-Oxley Act of 2002, and such registration continues to be effective;
+(b) Respondent, or the registered public accounting firm with which he
+is associated, has been inspected by the Board and that inspection did not identify any criticisms
+of or potential defects in the Respondent’s or the firm’s quality control system that would
+indicate that the Respondent will not receive appropriate supervision;
+ (c) Respondent has resolved all disciplinary issues with the Board, and
+has complied with all terms and conditions of any sanctions imposed by the Board (other than
+reinstatement by the Commission); and
+(d) Respondent acknowledges his responsibility, as long as
+Respondent appears or practices before the Commission as an independent accountant, to
+comply with all requirements of the Commission and the Board, including, but not limited to, all
+requirements relating to registration, inspections, concurring partner reviews and quality control
+standards.
+3
+C. The Commission will consider an application by Respondent to resume
+appearing or practicing before the Commission provided that his state CPA license is
+current and he has resolved all other disciplinary issues with the applicable state boards of
+accountancy. However, if state licensure is dependent on reinstatement by the
+Commission, the Commission will consider an application on its other merits.  The
+Commission’s review may include consideration of, in addition to the matters referenced
+above, any other matters relating to Respondent’s character, integrity, professional conduct,
+or qualifications to appear or practice before the Commission.
+ By the Commission.
+       N ancy M. Morris
+       S ecretary
+4

raw/aaer/2008/AAER-2801.txt ADDED Viewed

	@@ -0,0 +1,1411 @@

+     SEC.gov | Biovail Corporation, Eugene Melnyk, Brian Crombie, John Miszuk, and Kenneth G. Howling
+         !function(){var e=navigator.userAgent,a=document.documentElement,n=a.className;n=n.replace("no-js","js"),/iPad|iPhone|iPod/.test(e)&&!window.MSStream&&(n+=" ua-ios"),a.className=n}();
+     {"path":{"baseUrl":"\/","pathPrefix":"","currentPath":"node\/503091","currentPathIsAdmin":false,"isFront":false,"currentLanguage":"en"},"pluralDelimiter":"\u0003","suppressDeprecationErrors":true,"gtag":{"tagId":"","consentMode":false,"otherIds":[],"events":[],"additionalConfigInfo":[]},"ajaxPageState":{"libraries":"eJxdT0GOwzAI_JBdn_oei2DkeINNZLC22devlaZS2wtiBhhmcKNUTPo97jxyaXEH3GJpiZrFhQW38A4cMqgeYQGlV19JFTKpQ-kUmvQKXP7I0cO4tC2kPnbg2wVdFslM0SCHPMs3vsEPPD7J6hgOGdPCKJyoRxxqUuePHjLLAuzVjimenRJGSLW08NoBK9LUn6SHlrytVOlcpJShB63QLSpBx_WkOzHNePol4fRQo_qMPvQ36ZXsAmd99lMNr2t_GUR9n60EyX9a_wePd5ns","theme":"uswds_sec","theme_token":null},"ajaxTrustedUrl":[],"gtm":{"tagId":null,"settings":{"data_layer":"dataLayer","include_classes":false,"allowlist_classes":"","blocklist_classes":"","include_environment":false,"environment_id":"","environment_token":""},"tagIds":["GTM-TD3BKV"]},"data":{"extlink":{"extTarget":false,"extTargetAppendNewWindowDisplay":true,"extTargetAppendNewWindowLabel":"(opens in a new window)","extTargetNoOverride":false,"extNofollow":false,"extTitleNoOverride":false,"extNoreferrer":false,"extFollowNoOverride":false,"extClass":"0","extLabel":"(link is external)","extImgClass":false,"extSubdomains":true,"extExclude":".*\\.gov|http:\/\/www.xbrl.org\/utr\/2013-05-17\/utr.xml|http:\/\/www.xbrl.org\/dtr\/type\/numeric-2009-12-16.xsd|http:\/\/www.xbrl.org\/dtr\/type\/nonNumeric-2009-12-16.xsd|https:\/\/secir.secure.force.com\/ombudsman\/OMMSForm","extInclude":"","extCssExclude":".data-exempt","extCssInclude":"","extCssExplicit":"","extAlert":true,"extAlertText":"You are now leaving the SEC Website. The link you have selected is located on another server. Please click on the OK button below to proceed to the selected site. The SEC does not endorse this web site, its sponsor, or any of the policies, activities, products, or services offered on the site or by any advertiser on the site.","extHideIcons":false,"mailtoClass":"0","telClass":"","mailtoLabel":"(link sends email)","telLabel":"(link is a phone number)","extUseFontAwesome":false,"extIconPlacement":"append","extPreventOrphan":false,"extFaLinkClasses":"fa fa-external-link","extFaMailtoClasses":"fa fa-envelope-o","extAdditionalLinkClasses":"","extAdditionalMailtoClasses":"","extAdditionalTelClasses":"","extFaTelClasses":"fa fa-phone","allowedDomains":null,"extExcludeNoreferrer":""}},"field_group":{"html_element":{"mode":"default","context":"view","settings":{"classes":"rightrail-list","show_empty_fields":false,"id":"","element":"div","show_label":true,"label_element":"h2","label_element_classes":"","attributes":"","effect":"none","speed":"fast"}}},"user":{"uid":0,"permissionsHash":"e506dfd1572f94bd1f339f1a7483bfbded31d4a9d2bdfdca3fdbc235153380ee"}}
+      Skip to search field
+      Skip to main content
+           An official website of the United States government
+           Here’s how you know
+           Here’s how you know
+                Official websites use .gov
+                              A  .gov  website belongs to an official government organization in the United States.
+                Secure .gov websites use HTTPS
+              A  lock
+              (   Lock  A locked padlock    )
+              or  https://  means you’ve safely connected to the .gov website. Share sensitive information only on official, secure websites.
+                     SEC homepage
+        Menu
+          Close
+     Search SEC.gov &amp; EDGAR
+       Search
+             Search Filings
+           Search Filings
+                             Full Text Search
+                             Latest Filings
+                             Mutual Fund Search
+                             Variable Insurance Products Search
+                             SIC Codes
+                             CIK Lookup
+                             Public Dissemination Service (PDS)
+                             Search Assistance
+             Submit Filings
+           Submit Filings
+                             EDGAR Filer Management Portal
+                             EDGAR Filing Portal
+                             Online Forms Management Portal
+                             EDGAR Next
+                             Forms Index
+                             Filer Support &amp; Resources
+             Data &amp; Research
+           Data &amp; Research
+                             Data Library
+                             Statistics &amp; Data Visualizations
+                             Structured Data
+                             Investment Management Data
+                             Open Data at the SEC
+             Rules, Enforcement, &amp; Compliance
+           Rules &amp; Regulations
+                             Rulemaking Activity
+                             Submit Public Comments
+                             Staff Guidance
+                             No-Action, Interpretive, and Exemptive Letters
+                             Self-Regulatory Organization Rulemaking
+                             Public Petitions for Rulemaking
+           Enforcement &amp; Litigation
+                             Litigation Releases
+                             Administrative Proceedings
+                             Administrative Law Judge Orders and Initial Decisions
+                             Trading Suspensions
+                             Distributions to Harmed Investors
+                             Receiverships
+           Compliance
+                             Examination Priorities
+                             Risk Alerts
+                             Compliance Outreach Program
+                             Proposed Rules
+                             What&#039;s New
+                             Whistleblower Program
+             Featured Topics
+           Featured Topics
+                             Crypto Task Force
+                             Cybersecurity
+                             Market Structure Analytics
+                             Saving and Investing for Military Personnel
+                             Saving and Investing for Teachers
+                             SEC-CFTC Harmonization Initiative
+                             Treasury Clearing Implementation
+             About
+           About
+                             Mission
+                             Commissioners
+                             Divisions &amp; Offices
+                             Division &amp; Office Directors
+                             Advisory Committees
+                             Budget &amp; Performance
+                             Reports &amp; Publications
+                             Commission Votes
+                             Contact the SEC
+                             Careers
+                             Submit a Tip or Complaint
+                           Newsroom
+                           |
+                           Investors
+                           Small Businesses
+                           Whistleblowers
+                           Newsroom
+                           |
+                           Investors
+                           Small Businesses
+                           Whistleblowers
+     Search SEC.gov &amp; EDGAR
+       Search
+        More in this Section
+                 Enforcement &amp; Litigation
+           Litigation Releases
+           Administrative Proceedings
+           Administrative Law Judge Orders and Initial Decisions
+           Trading Suspensions
+           Distributions to Harmed Investors
+           Receiverships
+           Electronic Filings in Administrative Proceedings (eFAP)
+           Rules of Practice
+           Applications for Reentry
+           Reports of Investigations
+           Whistleblower Program
+           Public Alert: Unregistered Soliciting Entities (PAUSE)
+           SEC Action Lookup - Individuals (SALI)
+           Enforcement Data Delivery Standards
+           Small Businesses
+           Appellate Briefs
+           Amicus / Friend of the Court Briefs
+                 Enforcement &amp; Litigation
+           Litigation Releases
+           Administrative Proceedings
+           Administrative Law Judge Orders and Initial Decisions
+           Trading Suspensions
+           Distributions to Harmed Investors
+           Receiverships
+           Electronic Filings in Administrative Proceedings (eFAP)
+           Rules of Practice
+           Applications for Reentry
+           Reports of Investigations
+           Whistleblower Program
+           Public Alert: Unregistered Soliciting Entities (PAUSE)
+           SEC Action Lookup - Individuals (SALI)
+           Enforcement Data Delivery Standards
+           Small Businesses
+           Appellate Briefs
+           Amicus / Friend of the Court Briefs
+               Home
+               Enforcement and Litigation
+               Litigation Releases
+              Biovail Corporation, Eugene Melnyk, Brian Crombie, John Miszuk, and Kenneth G. Howling
+        Biovail Corporation, Eugene Melnyk, Brian Crombie, John Miszuk, and Kenneth G. Howling
+                   U.S. SECURITIES AND EXCHANGE COMMISSION
+ Litigation Release No. 20506 / March 24, 2008
+ Accounting and Auditing Enforcement Release No. 2801 / March 24, 2008
+  SEC v. Biovail Corporation, Eugene Melnyk, Brian Crombie, John Miszuk, and Kenneth G. Howling , 08 Civ. 02979 (LAK) (S.D.N.Y. filed March 24, 2008)
+ SEC Charges Biovail Corporation and Its Former CEO, CFO and Two Current Senior Executives With Securities Fraud
+ Biovail Settles Charges and Agrees to Pay $10 Million Civil Penalty
+ The Securities and Exchange Commission today charged Canadian pharmaceutical company Biovail Corporation and its former CEO, former CFO, and two current senior executives with engaging in a number of fraudulent accounting schemes and making a series of misstatements to analysts and investors.
+ The Commission's complaint alleges that present and former senior Biovail executives, obsessed with meeting quarterly and annual earnings guidance, repeatedly overstated earnings and hid losses in order to deceive investors and create the appearance of achieving earnings goals. When it ultimately became impossible to continue concealing the company's inability to meet its own earnings guidance, Biovail actively misled investors and analysts about the reasons for the company's poor performance.
+ Biovail settled the Commission's charges and will pay a $10 million penalty. Four current or former Biovail senior executives still face SEC charges: former chairman and chief executive officer Eugene Melnyk; former chief financial officer Brian Crombie; current controller John Miszuk; and current chief financial officer Kenneth G. Howling.
+ The Commission's complaint alleges that in October 2003 Biovail and some of its executives schemed to deceive investors and analysts by falsely attributing nearly half of Biovail's failure to meet its third quarter 2003 earnings guidance to a truck accident involving a shipment of one of Biovail's products. Led by Melnyk, Biovail intentionally misstated both the effect of the accident on Biovail's third quarter earnings as well as the value of the product involved in the truck accident. The accident, in fact, had no effect on third quarter earnings.
+ The Commission's complaint also alleges three accounting schemes that affected reporting periods from 2001 to 2003.
+  Biovail, over several reporting periods in 2001 and 2002, improperly moved off its financial statements and onto the financial statements of a special purpose entity approximately $47 million in expenses incurred in the research and development of some of Biovail's products. &nbsp;
+   Biovail concocted a fictitious bill and hold transaction to record approximately $8 million in revenue in the second quarter of 2003. &nbsp;
+   Biovail intentionally misstated foreign exchange losses that caused its second quarter 2003 loss to be understated by about $3.9 million.
+  The Commission's complaint alleges that each of Biovail's fraudulent accounting schemes had a material effect on Biovail's financial statements for the relevant quarters and years and was engineered by Biovail's senior management in order to inflate Biovail's reported earnings. Biovail management also intentionally deceived the company's outside auditors as to the true nature of the transactions. The truck accident misstatements were intended to mislead investors about the significance of Biovail's failure to meet its own earnings guidance.
+ According to the Commission's complaint, Melnyk violated shareholder disclosure provisions by failing to include in his Schedule 13D filings Biovail shares held by several off-shore trusts that Melnyk controlled. Because Melnyk exercised both investment and trading authority over the shares in the trusts, Melnyk was a beneficial owner of the securities and was required to disclose that ownership in his Schedule 13D filings with the Commission.
+ The Commission seeks a final judgment permanently enjoining all defendants from future violations of the Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5; Melnyk, Crombie, Miszuk, and Howling from aiding and abetting violations of Section 10(b) of the Exchange Act and Rule 10b-5; Biovail from violating Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act and Rules 12b-20, 13a-1, and 13a-16; Crombie and Biovail from violating Section 17(a) of the Securities Act of 1933 ("Securities Act"); Crombie from violating Rule 13a-14; Melnyk from violating Section 13(d) of the Exchange Act and Rules 13d-1 and 13d-2; Crombie and Miszuk from violating Section 13(b)(5) of the Exchange Act and Rules 13b2-1 and 13b2-2 and from aiding and abetting violations of Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act and Rules 12b-20, 13a-1, and 13a-16; and ordering them to pay civil penalties and disgorgement of any ill-gotten gains with prejudgment interest. The Commission also seeks a judgment barring Melnyk, Crombie, Howling, and Miszuk from serving as officers or directors of any public company.
+ Without admitting or denying the allegations in the Commission's complaint, Biovail agreed to settle this matter by consenting to a final judgment requiring it to pay a penalty of $10 million and disgorgement of $1, ordering it to comply with certain undertakings, including the retention of an independent consultant, and permanently enjoining it from future violations of Section 17(a) of the Securities Act and Sections 10(b), 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act and Rules 10b-5, 12b-20, 13a-1, and 13a-16, and Rule 302(b) of Regulation S-T.
+ The Commission acknowledges the assistance of the Ontario Securities Commission in this matter.
+   SEC Complaint in this matter
+&nbsp;
+   Resources
+      Complaint in this matter
+           Return to top
+                 SEC homepage
+                                                     About the SEC
+           Budget &amp; Performance
+           Careers
+           Commission Votes
+           Contact
+           Contracts
+                                                     Transparency
+           Accessibility &amp; Disability
+           Super Intelligence
+           FOIA
+           Inspector General
+           No FEAR Act Data
+           Ombuds
+           SEC Excess Personal Property Guidance
+                                                     Websites
+           Investor.gov
+           Related Sites
+           USA.gov
+                                                     Site Information
+           Plain Writing
+           Privacy &amp; Security
+           Site Map
+               Stay connected. Sign up for email updates.
+   Your email address
+   Sign Up
+                 X
+                 Facebook
+               Instagram
+                 RSS
+                 YouTube
+               Email Updates

raw/aaer/2008/AAER-2802.txt ADDED Viewed

	@@ -0,0 +1,1414 @@

+     SEC.gov | Romulus S. Pereira, Robert B. Stanton, L. John Kern, Andrew D. Feldman, William F. McFarland, Lori H. Cornmesser
+         !function(){var e=navigator.userAgent,a=document.documentElement,n=a.className;n=n.replace("no-js","js"),/iPad|iPhone|iPod/.test(e)&&!window.MSStream&&(n+=" ua-ios"),a.className=n}();
+     {"path":{"baseUrl":"\/","pathPrefix":"","currentPath":"node\/503101","currentPathIsAdmin":false,"isFront":false,"currentLanguage":"en"},"pluralDelimiter":"\u0003","suppressDeprecationErrors":true,"gtag":{"tagId":"","consentMode":false,"otherIds":[],"events":[],"additionalConfigInfo":[]},"ajaxPageState":{"libraries":"eJxdT0GOwzAI_JBdn_oei2DkeINNZLC22devlaZS2wtiBhhmcKNUTPo97jxyaXEH3GJpiZrFhQW38A4cMqgeYQGlV19JFTKpQ-kUmvQKXP7I0cO4tC2kPnbg2wVdFslM0SCHPMs3vsEPPD7J6hgOGdPCKJyoRxxqUuePHjLLAuzVjimenRJGSLW08NoBK9LUn6SHlrytVOlcpJShB63QLSpBx_WkOzHNePol4fRQo_qMPvQ36ZXsAmd99lMNr2t_GUR9n60EyX9a_wePd5ns","theme":"uswds_sec","theme_token":null},"ajaxTrustedUrl":[],"gtm":{"tagId":null,"settings":{"data_layer":"dataLayer","include_classes":false,"allowlist_classes":"","blocklist_classes":"","include_environment":false,"environment_id":"","environment_token":""},"tagIds":["GTM-TD3BKV"]},"data":{"extlink":{"extTarget":false,"extTargetAppendNewWindowDisplay":true,"extTargetAppendNewWindowLabel":"(opens in a new window)","extTargetNoOverride":false,"extNofollow":false,"extTitleNoOverride":false,"extNoreferrer":false,"extFollowNoOverride":false,"extClass":"0","extLabel":"(link is external)","extImgClass":false,"extSubdomains":true,"extExclude":".*\\.gov|http:\/\/www.xbrl.org\/utr\/2013-05-17\/utr.xml|http:\/\/www.xbrl.org\/dtr\/type\/numeric-2009-12-16.xsd|http:\/\/www.xbrl.org\/dtr\/type\/nonNumeric-2009-12-16.xsd|https:\/\/secir.secure.force.com\/ombudsman\/OMMSForm","extInclude":"","extCssExclude":".data-exempt","extCssInclude":"","extCssExplicit":"","extAlert":true,"extAlertText":"You are now leaving the SEC Website. The link you have selected is located on another server. Please click on the OK button below to proceed to the selected site. The SEC does not endorse this web site, its sponsor, or any of the policies, activities, products, or services offered on the site or by any advertiser on the site.","extHideIcons":false,"mailtoClass":"0","telClass":"","mailtoLabel":"(link sends email)","telLabel":"(link is a phone number)","extUseFontAwesome":false,"extIconPlacement":"append","extPreventOrphan":false,"extFaLinkClasses":"fa fa-external-link","extFaMailtoClasses":"fa fa-envelope-o","extAdditionalLinkClasses":"","extAdditionalMailtoClasses":"","extAdditionalTelClasses":"","extFaTelClasses":"fa fa-phone","allowedDomains":null,"extExcludeNoreferrer":""}},"field_group":{"html_element":{"mode":"default","context":"view","settings":{"classes":"rightrail-list","show_empty_fields":false,"id":"","element":"div","show_label":true,"label_element":"h2","label_element_classes":"","attributes":"","effect":"none","speed":"fast"}}},"user":{"uid":0,"permissionsHash":"e506dfd1572f94bd1f339f1a7483bfbded31d4a9d2bdfdca3fdbc235153380ee"}}
+      Skip to search field
+      Skip to main content
+           An official website of the United States government
+           Here’s how you know
+           Here’s how you know
+                Official websites use .gov
+                              A  .gov  website belongs to an official government organization in the United States.
+                Secure .gov websites use HTTPS
+              A  lock
+              (   Lock  A locked padlock    )
+              or  https://  means you’ve safely connected to the .gov website. Share sensitive information only on official, secure websites.
+                     SEC homepage
+        Menu
+          Close
+     Search SEC.gov &amp; EDGAR
+       Search
+             Search Filings
+           Search Filings
+                             Full Text Search
+                             Latest Filings
+                             Mutual Fund Search
+                             Variable Insurance Products Search
+                             SIC Codes
+                             CIK Lookup
+                             Public Dissemination Service (PDS)
+                             Search Assistance
+             Submit Filings
+           Submit Filings
+                             EDGAR Filer Management Portal
+                             EDGAR Filing Portal
+                             Online Forms Management Portal
+                             EDGAR Next
+                             Forms Index
+                             Filer Support &amp; Resources
+             Data &amp; Research
+           Data &amp; Research
+                             Data Library
+                             Statistics &amp; Data Visualizations
+                             Structured Data
+                             Investment Management Data
+                             Open Data at the SEC
+             Rules, Enforcement, &amp; Compliance
+           Rules &amp; Regulations
+                             Rulemaking Activity
+                             Submit Public Comments
+                             Staff Guidance
+                             No-Action, Interpretive, and Exemptive Letters
+                             Self-Regulatory Organization Rulemaking
+                             Public Petitions for Rulemaking
+           Enforcement &amp; Litigation
+                             Litigation Releases
+                             Administrative Proceedings
+                             Administrative Law Judge Orders and Initial Decisions
+                             Trading Suspensions
+                             Distributions to Harmed Investors
+                             Receiverships
+           Compliance
+                             Examination Priorities
+                             Risk Alerts
+                             Compliance Outreach Program
+                             Proposed Rules
+                             What&#039;s New
+                             Whistleblower Program
+             Featured Topics
+           Featured Topics
+                             Crypto Task Force
+                             Cybersecurity
+                             Market Structure Analytics
+                             Saving and Investing for Military Personnel
+                             Saving and Investing for Teachers
+                             SEC-CFTC Harmonization Initiative
+                             Treasury Clearing Implementation
+             About
+           About
+                             Mission
+                             Commissioners
+                             Divisions &amp; Offices
+                             Division &amp; Office Directors
+                             Advisory Committees
+                             Budget &amp; Performance
+                             Reports &amp; Publications
+                             Commission Votes
+                             Contact the SEC
+                             Careers
+                             Submit a Tip or Complaint
+                           Newsroom
+                           |
+                           Investors
+                           Small Businesses
+                           Whistleblowers
+                           Newsroom
+                           |
+                           Investors
+                           Small Businesses
+                           Whistleblowers
+     Search SEC.gov &amp; EDGAR
+       Search
+        More in this Section
+                 Enforcement &amp; Litigation
+           Litigation Releases
+           Administrative Proceedings
+           Administrative Law Judge Orders and Initial Decisions
+           Trading Suspensions
+           Distributions to Harmed Investors
+           Receiverships
+           Electronic Filings in Administrative Proceedings (eFAP)
+           Rules of Practice
+           Applications for Reentry
+           Reports of Investigations
+           Whistleblower Program
+           Public Alert: Unregistered Soliciting Entities (PAUSE)
+           SEC Action Lookup - Individuals (SALI)
+           Enforcement Data Delivery Standards
+           Small Businesses
+           Appellate Briefs
+           Amicus / Friend of the Court Briefs
+                 Enforcement &amp; Litigation
+           Litigation Releases
+           Administrative Proceedings
+           Administrative Law Judge Orders and Initial Decisions
+           Trading Suspensions
+           Distributions to Harmed Investors
+           Receiverships
+           Electronic Filings in Administrative Proceedings (eFAP)
+           Rules of Practice
+           Applications for Reentry
+           Reports of Investigations
+           Whistleblower Program
+           Public Alert: Unregistered Soliciting Entities (PAUSE)
+           SEC Action Lookup - Individuals (SALI)
+           Enforcement Data Delivery Standards
+           Small Businesses
+           Appellate Briefs
+           Amicus / Friend of the Court Briefs
+               Home
+               Enforcement and Litigation
+               Litigation Releases
+              Romulus S. Pereira, Robert B. Stanton, L. John Kern, Andrew D. Feldman, William F. McFarland, Lori H. Cornmesser
+        Romulus S. Pereira, Robert B. Stanton, L. John Kern, Andrew D. Feldman, William F. McFarland, Lori H. Cornmesser
+                   U.S. SECURITIES AND EXCHANGE COMMISSION
+ Litigation Release No. 20508 / March 25, 2008
+ Accounting and Auditing Enforcement Release No. 2802 / March 25, 2008
+  SEC v. Romulus S. Pereira et al. , Civil Action No. 3:06-CV-06384-MHP (N.D. Cal., filed October 12, 2006)
+ SEC Settles With Former Officers of Riverstone Networks, Inc.
+ The Securities and Exchange Commission ("Commission") announced today that the Honorable Charles R. Breyer of the United States District Court for the Northern District of California has entered, by consent, orders of permanent injunction and other relief ("Orders") in a civil action the Commission brought against five former officers and one former employee of Riverstone Networks, Inc. ("Riverstone"), a California-based company that formerly manufacture and market communications routers. In the lawsuit, the Commission alleged that from June 2001 through June 2002, these defendants participated in a scheme to inflate Riverstone's publicly-reported net revenues through improper revenue recognition on contingent sales (SEC Lit. Rel. No. 19869). The defendants, in consenting to the Orders, neither admitted nor denied the allegations of the Commission's complaint.
+ Pursuant to the Orders, former Riverstone officers Romulus S. Pereira, chief executive officer, Robert B. Stanton, chief financial officer, L. John Kern, executive vice president of sales, Andrew D. Feldman, vice president of marketing, and William F. McFarland, vice president of finance, have been enjoined from violating Sections 10(b) and 13(b)(5) of the Securities Exchange Act of 1934 ("Exchange Act") and Rules 10b-5, 13b2-1, and 13b2-2 thereunder, and from aiding and abetting violations of Sections 13(a) and 13(b)(2)(A) of the Exchange Act and Rules 12b-20, 13a-1, and 13a-13 thereunder. Defendants Pereira, Stanton, and McFarland were further enjoined from aiding and abetting violations of Section 13(b)(2)(B)(ii) of the Exchange Act. Former Riverstone employee Lori H. Cornmesser, director of sales operations, was enjoined from violating Section 13(b)(5) of the Exchange Act and Rule 13b2-1 thereunder, and from aiding and abetting violations of Section 13(b)(2)(A) of the Exchange Act and Rule 13b2-2 thereunder. The Orders also require defendants Pereira, Stanton, Kern, Feldman, and Cornmesser to pay disgorgement in the amount of $375,000, $175,000, $347,066, $289,507, and $17,054, respectively. Defendants Pereira, Stanton, and McFarland were further ordered to pay civil penalties in the amount of $75,000, $75,000, and $40,000, respectively. Finally, defendants Pereira, Stanton, and Kern have been barred for a period of five years from acting as an officer or director of a public company.
+ In related criminal cases, defendants Kern and Feldman pled guilty to one felony count each of violating the internal accounting controls of a public company under the provisions of Sections 13(b)(5) and 32 of the Exchange Act. In December 2007, they were each sentence to three years of probation and fined $5,000.  U.S. v. Kern , Case No. 3:0-CRr-00733 and  U.S. v. Feldman , Case No. 3:07-CR-00731 (N.D. Cal.).
+   Order of Permanent Injunction Against Pereira    Order of Permanent Injunction Against Stanton    Order of Permanent Injunction Against Kern    Order of Permanent Injunction Against Feldman    Order of Permanent Injunction Against McFarland    Order of Permanent Injunction Against Cornmesser
+&nbsp;
+   Resources
+      Order of Permanent Injunction Against Pereira
+     Order of Permanent Injunction Against Stanton
+     Order of Permanent Injunction Against Kern
+     Order of Permanent Injunction Against Feldman
+     Order of Permanent Injunction Against McFarland
+     Order of Permanent Injunction Against Cornmesser
+           Return to top
+                 SEC homepage
+                                                     About the SEC
+           Budget &amp; Performance
+           Careers
+           Commission Votes
+           Contact
+           Contracts
+                                                     Transparency
+           Accessibility &amp; Disability
+           Super Intelligence
+           FOIA
+           Inspector General
+           No FEAR Act Data
+           Ombuds
+           SEC Excess Personal Property Guidance
+                                                     Websites
+           Investor.gov
+           Related Sites
+           USA.gov
+                                                     Site Information
+           Plain Writing
+           Privacy &amp; Security
+           Site Map
+               Stay connected. Sign up for email updates.
+   Your email address
+   Sign Up
+                 X
+                 Facebook
+               Instagram
+                 RSS
+                 YouTube
+               Email Updates

raw/aaer/2008/AAER-2805.txt ADDED Viewed

	@@ -0,0 +1,75 @@

+UNITED STATES OF AMERICA
+Before the
+SECURITIES AND EXCHANGE COMMISSION
+SECURITIES EXCHANGE ACT OF 1934
+Release No. 57563 / March 26, 2008
+ACCOUNTING AND AUDITING ENFORCEMENT
+Release No. 2805 / March 26, 2008
+ADMINISTRATIVE PROCEEDING
+File No. 3-11911
+:
+In the Matter of
+Steven H. Barry, CPA
+:
+:
+:
+:
+ORDER GRANTING APPLICATION FOR
+REINSTATEMENT TO APPEAR AND PRACTICE
+BEFORE THE COMMISSION AS AN ACCOUNTANT
+:
+On April 26, 2005, Steven H. Barry (“Barry”) was denied the privilege of appearing or
+practicing as an accountant before the Commission as a result of settled public administrative
+proceedings instituted by the Commission against Barry pursuant to Rule 102(e) of the
+Commission's Rules of Practice.1  Barry consented to the entry of the April 26, 2005 order
+without admitting or denying the findings therein.  This order is issued in response to Barry’s
+application for reinstatement to practice before the Commission as an accountant.
+Barry served as the engagement partner for Deloitte & Touche LLP’s audit of Just for
+Feet, Inc.’s financial statements for the fiscal year ended January 30, 1999.  Barry reasonably
+should have known that the financial statements had not been prepared in accordance with
+GAAP, but nonetheless issued, with others, an unqualified audit report that represented that the
+financial statements were free from material misstatements and were presented in conformity
+with GAAP and that the auditors had adhered to GAAS when the audit was performed.  Barry
+did not comply with GAAS in the conduct of the audit and engaged in improper professional
+conduct within the meaning of Rule 102(e)(1)(ii) of the Commission’s Rules of Practice through
+repeated instances of unreasonable conduct.
+Barry has met all of the conditions set forth in the original order and, in his capacity as an
+independent accountant, has stated that he will comply with all requirements of the Commission
+and the Public Company Accounting Oversight Board, including, but not limited to all
+1 See Accounting and Auditing Enforcement Release No. 2238 dated April 26, 2005.  Barry was permitted, pursuant
+to the order, to apply for reinstatement after two years upon making certain showings.
+requirements relating to registration, inspections, concurring partner reviews and quality control
+standards. In his capacity as a preparer or reviewer, or as a person responsible for the
+preparation or review, of financial statements of a public company to be filed with the
+Commission, Barry attests that he will undertake to have his work reviewed by the independent
+audit committee of any company for which he works, or in some other manner acceptable to the
+Commission, while practicing before the Commission in this capacity.
+Rule 102(e)(5) of the Commission’s Rules of Practice governs applications for
+reinstatement, and provides that the Commission may reinstate the privilege to appear and
+practice before the Commission “for good cause shown.”2  This “good cause” determination is
+necessarily highly fact specific.
+ On the basis of the information supplied, representations made, and undertakings agreed
+to by Barry, it appears that he has complied with the terms of the April 26, 2005 order denying
+him the privilege of appearing or practicing before the Commission as an accountant, that no
+information has come to the attention of the Commission relating to his character, integrity,
+professional conduct or qualifications to practice before the Commission that would be a basis
+for adverse action against him pursuant to Rule 102(e) of the Commission's Rules of Practice,
+and that Barry, by undertaking to have his work reviewed by the independent audit committee of
+any company for which he works, or in some other manner acceptable to the Commission, in his
+practice before the Commission as a preparer or reviewer of financial statements required to be
+filed with the Commission, and that Barry, by undertaking to comply with all requirements of the
+Commission and the Public Company Accounting Oversight Board, including, but not limited to,
+all requirements relating to registration, inspections, concurring partner reviews and quality
+control standards, in his practice before the Commission as an independent accountant has shown
+good cause for reinstatement.  Therefore, it is accordingly,
+ORDERED pursuant to Rule 102(e)(5)(i) of the Commission's Rules of Practice that
+Steven H. Barry, CPA is hereby reinstated to appear and practice before the Commission as an
+accountant.
+By the Commission.
+Nancy M. Morris
+Secretary
+2 Rule 102(e)(5)(i) provides:
+“An application for reinstatement of a person permanently suspended or disqualified under paragraph (e)(1) or (e)(3)
+of this section may be made at any time, and the applicant may, in the Commission’s discretion, be afforded a
+hearing; however, the suspension or disqualification shall continue unless and until the applicant has been reinstated
+by the Commission for good cause shown.” 17 C.F.R. § 201.102(e)(5)(i).

raw/aaer/2008/AAER-2806.txt ADDED Viewed

	@@ -0,0 +1,96 @@

+UNITED STATES OF AMERICA
+Before the
+SECURITIES AND EXCHANGE COMMISSION
+SECURITIES EXCHANGE ACT OF 1934
+Release No. 57612 / April 3, 2008
+ACCOUNTING AND AUDITING ENFORCEMENT
+Release No. 2806 / April 3, 2008
+ADMINISTRATIVE PROCEEDING
+File No. 3-11457
+In the Matter of
+John Luczycki, CPA
+:
+:
+:
+:
+:
+:
+ORDER GRANTING APPLICATION FOR
+REINSTATEMENT TO APPEAR AND PRACTICE
+BEFORE THE COMMISSION AS AN ACCOUNTANT
+RESPONSIBLE FOR THE PREPARATION OR
+REVIEW OF FINANCIAL STATEMENTS REQUIRED
+TO BE FILED WITH THE COMMISSION
+On April 14, 2004, John Luczycki (“Luczycki”) was denied the privilege of appearing or
+practicing as an accountant before the Commission as a result of settled public administrative
+proceedings instituted by the Commission against Luczycki pursuant to Rule 102(e) of the
+Commission's Rules of Practice.1  Luczycki consented to the entry of the order without admitting
+or denying the findings therein.  This order is issued in response to Luczycki’s application for
+reinstatement to appear and practice before the Commission as an accountant responsible for the
+preparation or review of financial statements required to be filed with the Commission.
+ During the period from December 2000 to July 2002, Luczycki served as Vivendi
+Universal, S.A.’s (“Vivendi”) Chief Accounting Officer and controller.  The Commission’s order
+found that, in this capacity, Luczycki, along with other Vivendi senior executives, made
+improper adjustments that allowed Vivendi to meet earnings targets that it had communicated to
+the market.  In addition, Luczycki knew or was reckless in not knowing that Vivendi improperly
+failed to disclose a side agreement that Vivendi entered into in February 2001.  Finally, Luczycki
+participated in Vivendi’s failure to disclose in a timely manner all of the material facts about
+Vivendi’s investment in a fund in June, 2001.
+In his capacity as a preparer or reviewer, or as a person responsible for the preparation or
+review, of financial statements of a public company to be filed with the Commission, Luczycki
+attests that he will undertake to have his work reviewed by the independent audit committee of
+1 See Accounting and Auditing Enforcement Release No. 1989 dated April 14, 2004.  Luczycki was permitted,
+pursuant to the order, to apply for reinstatement after three years upon making certain showings.
+any company for which he works, or in some other manner acceptable to the Commission, while
+practicing before the Commission in this capacity.  Luczycki is not, at this time, seeking to
+appear or practice before the Commission as an independent accountant.  If he should wish to
+resume appearing and practicing before the Commission as an independent accountant, he will
+be required to submit an application to the Commission showing that he has complied and will
+comply with the terms of the original suspension order in this regard.  Therefore, Luczycki’s
+denial of the privilege of appearing or practicing before the Commission as an independent
+accountant continues in effect until the Commission determines that a sufficient showing has
+been made in this regard in accordance with the terms of the original suspension order.
+Rule 102(e)(5) of the Commission’s Rules of Practice governs applications for
+reinstatement, and provides that the Commission may reinstate the privilege to appear and
+practice before the Commission “for good cause shown.”2  This “good cause” determination is
+necessarily highly fact specific.
+On the basis of information supplied, representations made, and undertakings agreed to
+by Luczycki, it appears that he has complied with the terms of the April 14, 2004 order denying
+him the privilege of appearing or practicing before the Commission as an accountant, that no
+information has come to the attention of the Commission relating to his character, integrity,
+professional conduct or qualifications to practice before the Commission that would be a basis
+for adverse action against him pursuant to Rule 102(e) of the Commission's Rules of Practice,
+and that Luczycki, by undertaking to have his work reviewed by the independent audit
+committee of any company for which he works, or in some other manner acceptable to the
+Commission, in his practice before the Commission as a preparer or reviewer of financial
+statements required to be filed with the Commission, has shown good cause for reinstatement.
+Therefore, it is accordingly,
+ORDERED pursuant to Rule 102(e)(5)(i) of the Commission's Rules of Practice that John
+Luczycki, CPA is hereby reinstated to appear and practice before the Commission as an
+accountant responsible for the preparation or review of financial statements required to be filed
+with the Commission.
+By the Commission.
+Nancy M. Morris
+Secretary
+2 Rule 102(e)(5)(i) provides:
+“An application for reinstatement of a person permanently suspended or disqualified under paragraph (e)(1) or (e)(3)
+of this section may be made at any time, and the applicant may, in the Commission’s discretion, be afforded a
+hearing; however, the suspension or disqualification shall continue unless and until the applicant has been reinstated
+by the Commission for good cause shown.”  17 C.F.R. § 201.102(e)(5)(i).
+ 2

raw/aaer/2008/AAER-2807.txt ADDED Viewed

	@@ -0,0 +1,1398 @@

+     SEC.gov | John N. Milne
+         !function(){var e=navigator.userAgent,a=document.documentElement,n=a.className;n=n.replace("no-js","js"),/iPad|iPhone|iPod/.test(e)&&!window.MSStream&&(n+=" ua-ios"),a.className=n}();
+     {"path":{"baseUrl":"\/","pathPrefix":"","currentPath":"node\/503151","currentPathIsAdmin":false,"isFront":false,"currentLanguage":"en"},"pluralDelimiter":"\u0003","suppressDeprecationErrors":true,"gtag":{"tagId":"","consentMode":false,"otherIds":[],"events":[],"additionalConfigInfo":[]},"ajaxPageState":{"libraries":"eJxdT0GOwzAI_JBdn_oei2DkeINNZLC22devlaZS2wtiBhhmcKNUTPo97jxyaXEH3GJpiZrFhQW38A4cMqgeYQGlV19JFTKpQ-kUmvQKXP7I0cO4tC2kPnbg2wVdFslM0SCHPMs3vsEPPD7J6hgOGdPCKJyoRxxqUuePHjLLAuzVjimenRJGSLW08NoBK9LUn6SHlrytVOlcpJShB63QLSpBx_WkOzHNePol4fRQo_qMPvQ36ZXsAmd99lMNr2t_GUR9n60EyX9a_wePd5ns","theme":"uswds_sec","theme_token":null},"ajaxTrustedUrl":[],"gtm":{"tagId":null,"settings":{"data_layer":"dataLayer","include_classes":false,"allowlist_classes":"","blocklist_classes":"","include_environment":false,"environment_id":"","environment_token":""},"tagIds":["GTM-TD3BKV"]},"data":{"extlink":{"extTarget":false,"extTargetAppendNewWindowDisplay":true,"extTargetAppendNewWindowLabel":"(opens in a new window)","extTargetNoOverride":false,"extNofollow":false,"extTitleNoOverride":false,"extNoreferrer":false,"extFollowNoOverride":false,"extClass":"0","extLabel":"(link is external)","extImgClass":false,"extSubdomains":true,"extExclude":".*\\.gov|http:\/\/www.xbrl.org\/utr\/2013-05-17\/utr.xml|http:\/\/www.xbrl.org\/dtr\/type\/numeric-2009-12-16.xsd|http:\/\/www.xbrl.org\/dtr\/type\/nonNumeric-2009-12-16.xsd|https:\/\/secir.secure.force.com\/ombudsman\/OMMSForm","extInclude":"","extCssExclude":".data-exempt","extCssInclude":"","extCssExplicit":"","extAlert":true,"extAlertText":"You are now leaving the SEC Website. The link you have selected is located on another server. Please click on the OK button below to proceed to the selected site. The SEC does not endorse this web site, its sponsor, or any of the policies, activities, products, or services offered on the site or by any advertiser on the site.","extHideIcons":false,"mailtoClass":"0","telClass":"","mailtoLabel":"(link sends email)","telLabel":"(link is a phone number)","extUseFontAwesome":false,"extIconPlacement":"append","extPreventOrphan":false,"extFaLinkClasses":"fa fa-external-link","extFaMailtoClasses":"fa fa-envelope-o","extAdditionalLinkClasses":"","extAdditionalMailtoClasses":"","extAdditionalTelClasses":"","extFaTelClasses":"fa fa-phone","allowedDomains":null,"extExcludeNoreferrer":""}},"field_group":{"html_element":{"mode":"default","context":"view","settings":{"classes":"rightrail-list","show_empty_fields":false,"id":"","element":"div","show_label":true,"label_element":"h2","label_element_classes":"","attributes":"","effect":"none","speed":"fast"}}},"user":{"uid":0,"permissionsHash":"e506dfd1572f94bd1f339f1a7483bfbded31d4a9d2bdfdca3fdbc235153380ee"}}
+      Skip to search field
+      Skip to main content
+           An official website of the United States government
+           Here’s how you know
+           Here’s how you know
+                Official websites use .gov
+                              A  .gov  website belongs to an official government organization in the United States.
+                Secure .gov websites use HTTPS
+              A  lock
+              (   Lock  A locked padlock    )
+              or  https://  means you’ve safely connected to the .gov website. Share sensitive information only on official, secure websites.
+                     SEC homepage
+        Menu
+          Close
+     Search SEC.gov &amp; EDGAR
+       Search
+             Search Filings
+           Search Filings
+                             Full Text Search
+                             Latest Filings
+                             Mutual Fund Search
+                             Variable Insurance Products Search
+                             SIC Codes
+                             CIK Lookup
+                             Public Dissemination Service (PDS)
+                             Search Assistance
+             Submit Filings
+           Submit Filings
+                             EDGAR Filer Management Portal
+                             EDGAR Filing Portal
+                             Online Forms Management Portal
+                             EDGAR Next
+                             Forms Index
+                             Filer Support &amp; Resources
+             Data &amp; Research
+           Data &amp; Research
+                             Data Library
+                             Statistics &amp; Data Visualizations
+                             Structured Data
+                             Investment Management Data
+                             Open Data at the SEC
+             Rules, Enforcement, &amp; Compliance
+           Rules &amp; Regulations
+                             Rulemaking Activity
+                             Submit Public Comments
+                             Staff Guidance
+                             No-Action, Interpretive, and Exemptive Letters
+                             Self-Regulatory Organization Rulemaking
+                             Public Petitions for Rulemaking
+           Enforcement &amp; Litigation
+                             Litigation Releases
+                             Administrative Proceedings
+                             Administrative Law Judge Orders and Initial Decisions
+                             Trading Suspensions
+                             Distributions to Harmed Investors
+                             Receiverships
+           Compliance
+                             Examination Priorities
+                             Risk Alerts
+                             Compliance Outreach Program
+                             Proposed Rules
+                             What&#039;s New
+                             Whistleblower Program
+             Featured Topics
+           Featured Topics
+                             Crypto Task Force
+                             Cybersecurity
+                             Market Structure Analytics
+                             Saving and Investing for Military Personnel
+                             Saving and Investing for Teachers
+                             SEC-CFTC Harmonization Initiative
+                             Treasury Clearing Implementation
+             About
+           About
+                             Mission
+                             Commissioners
+                             Divisions &amp; Offices
+                             Division &amp; Office Directors
+                             Advisory Committees
+                             Budget &amp; Performance
+                             Reports &amp; Publications
+                             Commission Votes
+                             Contact the SEC
+                             Careers
+                             Submit a Tip or Complaint
+                           Newsroom
+                           |
+                           Investors
+                           Small Businesses
+                           Whistleblowers
+                           Newsroom
+                           |
+                           Investors
+                           Small Businesses
+                           Whistleblowers
+     Search SEC.gov &amp; EDGAR
+       Search
+        More in this Section
+                 Enforcement &amp; Litigation
+           Litigation Releases
+           Administrative Proceedings
+           Administrative Law Judge Orders and Initial Decisions
+           Trading Suspensions
+           Distributions to Harmed Investors
+           Receiverships
+           Electronic Filings in Administrative Proceedings (eFAP)
+           Rules of Practice
+           Applications for Reentry
+           Reports of Investigations
+           Whistleblower Program
+           Public Alert: Unregistered Soliciting Entities (PAUSE)
+           SEC Action Lookup - Individuals (SALI)
+           Enforcement Data Delivery Standards
+           Small Businesses
+           Appellate Briefs
+           Amicus / Friend of the Court Briefs
+                 Enforcement &amp; Litigation
+           Litigation Releases
+           Administrative Proceedings
+           Administrative Law Judge Orders and Initial Decisions
+           Trading Suspensions
+           Distributions to Harmed Investors
+           Receiverships
+           Electronic Filings in Administrative Proceedings (eFAP)
+           Rules of Practice
+           Applications for Reentry
+           Reports of Investigations
+           Whistleblower Program
+           Public Alert: Unregistered Soliciting Entities (PAUSE)
+           SEC Action Lookup - Individuals (SALI)
+           Enforcement Data Delivery Standards
+           Small Businesses
+           Appellate Briefs
+           Amicus / Friend of the Court Briefs
+               Home
+               Enforcement and Litigation
+               Litigation Releases
+              John N. Milne
+        John N. Milne
+                   U.S. SECURITIES AND EXCHANGE COMMISSION
+ Litigation Release No. 20518 / April 7, 2008
+ Accounting and Auditing Enforcement Release No. 2807 / April 7, 2008
+  SEC v. John N. Milne, , Civil Action No. 3:08-CV-505 (VLB) (D.Ct.)
+ SEC Charges John N. Milne, Former Vice-Chairman, President and CFO of United Rentals, Inc., with Financial Fraud
+ The Securities and Exchange Commission announced the filing on April 4, 2008, of securities fraud charges against John N. Milne, a former Vice Chairman, President, and Chief Financial Officer of United Rentals, Inc. ("URI").  Milne is the second URI officer, and the third CFO, charged in connection with the alleged violations.  On December 12, 2007, the Commission filed settled financial fraud charges against Michael J. Nolan, another former CFO of URI.  On December 27, 2001, the Commission charged Joseph F. Apuzzo, a former CFO of Terex Corporation, with aiding and abetting the fraudulent scheme.
+ The Commission's complaint, filed in the United States District Court for the District of Connecticut, alleges that, from 2000 through 2002, Milne engaged in a series of fraudulent transactions undertaken in order to meet URI's earnings forecasts and analyst expectations.  The complaint alleges that Milne and Nolan carried out the fraud through a series of interlocking three-party transactions, structured as "minor sale-leasebacks," to allow URI to recognize revenue prematurely and to inflate profits generated from the sales.  As a result of the fraud, URI materially overstated its financial results in its Forms 10-K for fiscal years 2000 and 2001, and its Forms 10-Q for the periods ended June 30, 2001 and March 31, 2002, as well as in other public releases.
+ The complaint further alleges that shortly after URI announced 2001 and 2002 year-end results, Milne sold approximately $38 million of URI stock that he owned, knowing that the company's announced financial results were materially overstated.
+ The Commission's complaint alleges that, as a result of his actions, Milne violated Section 17(a) of the Securities Act of 1933, and Sections 10(b) and 13(b)(5) of the Securities Exchange Act of 1934, and Rules 10b-5, 13b2-1 and 13b2-2 thereunder, and aided and abetted URI's violations of Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act, and Rules 12b-20, 13a-1 and 13a-13 thereunder.  As part of this action, the Commission seeks a permanent injunction, an officer and director bar, disgorgement and prejudgment interest, civil penalties, and other equitable relief.
+ The U.S. Attorney's Office for the District of Connecticut also announced that Milne was indicted on conspiracy, securities fraud, making false statements to the Commission and related charges in a parallel criminal action.
+ The Commission acknowledges the assistance of the U.S. Attorney's Office for the District of Connecticut and the New Haven Field Office of the Federal Bureau of Investigation in the investigation of this matter.
+ The Commission's investigation is continuing.
+ For further information, see Litigation Release Nos.  20396  (December 12, 2007) and  20418  (December 31, 2007).
+   SEC Complaint in this matter
+ &nbsp;
+   Resources
+      Complaint in this matter
+           Return to top
+                 SEC homepage
+                                                     About the SEC
+           Budget &amp; Performance
+           Careers
+           Commission Votes
+           Contact
+           Contracts
+                                                     Transparency
+           Accessibility &amp; Disability
+           Super Intelligence
+           FOIA
+           Inspector General
+           No FEAR Act Data
+           Ombuds
+           SEC Excess Personal Property Guidance
+                                                     Websites
+           Investor.gov
+           Related Sites
+           USA.gov
+                                                     Site Information
+           Plain Writing
+           Privacy &amp; Security
+           Site Map
+               Stay connected. Sign up for email updates.
+   Your email address
+   Sign Up
+                 X
+                 Facebook
+               Instagram
+                 RSS
+                 YouTube
+               Email Updates