Datasets:

codewithdark
/

SEC-RPT-Panel

+ UNITED STATES OF AMERICA
+Before the
+SECURITIES AND EXCHANGE COMMISSION
+SECURITIES ACT of 1933
+Release No.  8651 / January 4, 2006
+SECURITIES EXCHANGE ACT of 1934
+Release No.  53049 / January 4, 2006
+ACCOUNTING AND AUDITING ENFORCEMENT
+Release No.  2359 / January 4, 2006
+ADMINISTRATIVE PROCEEDING
+File No.  3-12138
+__________________________________________
+:
+In the Matter of : ORDER INSTITUTING
+: CEASE-AND-DESIST
+: PROCEEDINGS, MAKING
+       APPLIX, INC., : FINDINGS, AND IMPOSING
+: CEASE-AND-DESIST ORDER
+Respondent. : PURSUANT TO SECTION 8A OF
+: THE SECURITIES ACT OF 1933
+: AND 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 8A of the
+Securities Act of 1933 (“Securities Act”) and Section 21C of the Securities Exchange Act of
+1934 (“Exchange Act”), against Applix, Inc. (“Applix” or “Respondent”).
+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.
+2 The company also improperly included in its financial statements $333,333 as cash
+received as payment on the transaction even though those funds were not received until the
+following year.
+3 The customer did accept the product before year end 2002 and made the initial payment
+due on acceptance.
+4 For the second quarter of 2002, the increase in revenue of $225,000 from the December
+31, 2001 software license revenue recognized in 2002 partially offset the decrease in revenue of
+$341,000 for a net decrease of $116,000.  Accordingly, the net overstatement of revenue for the
+quarter is 1.3% and the net understatement of net loss is 14.7%.
+2
+II.
+In anticipation of the institution of these cease-and-desist 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 over 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 Cease-and-Desist Order
+Pursuant to Section 8A of the Securities Act of 1933 and Section 21C of the Securities Exchange
+Act of 1934 (“Order”), as set forth below.
+III.
+On the basis of this Order and the Respondent’s Offer, the Commission finds
+1 that:
+A. SUMMARY
+1. Applix materially overstated net income in two periodic reports and a registration
+statement filed with the Commission.  The overstatements relate to two transactions.  In the first
+transaction, the Respondent improperly recognized $898,000 of software license revenue under a
+December 31, 2001 reseller agreement.  Because the agreement included the right to resell a
+future product that was currently in development, Applix should have recognized the license
+revenue ratably over the 12 month term of the agreement, i.e., throughout 2002.  By improperly
+recognizing all of the license revenue up-front, Applix met its 2001 revenue goals, and
+improperly understated its net loss for the year by 8.3%.
+2  In the second transaction, Applix
+improperly recognized $341,000 in revenue for the quarter ended June 30, 2002 under a sales
+contract, even though the customer had not yet accepted the product.
+3  As a result, Applix
+understated its net loss for the quarter by 33.6%. 4
+5 On April 4, 2003, Applix filed a second amendment to the Form 10-Q for the third
+quarter of 2002 to include information that was inadvertently omitted in the first amendment.
+3
+2. On February 28, 2003, Applix announced it would restate its periodic filings to
+report correctly the revenue from the two transactions in the proper periods.  After the public
+announcement, Applix’s stock price fell approximately 13%, or twenty-six cents, closing at
+$1.70 per share.  On March 31, 2003, Applix filed an amended Form 10-K for the year ended
+December 31, 2001 and amended Forms 10-Q for the first three quarters of 2002.
+5
+B. FACTS
+3. Applix , a Massachusetts corporation based in Westborough, Massachusetts
+develops, sells and supports business performance management software.  Applix stock is
+registered under Section
+12(g) of the Exchange Act and traded on the NASDAQ SmallCap Market.
+Applix reports its results of operations on a calendar year basis.
+ 4. Applix materially misstated the company’s financial results of operation for the
+year ended December 31, 2001 and the quarter ended June 30, 2002.  The misleading financial
+information was included in press releases, periodic and current filings with the Commission and
+incorporated by reference into a registration statement filed with the Commission.
+5. For the year ended December 31, 2001, Applix improperly recognized $898,000
+in revenue under a reseller agreement with a privately held company headquartered in New York
+City (“the Partner”).  Applix originally entered a reseller agreement with the Partner in March
+2000.  The March 2000 reseller agreement granted the Partner the right to market, demonstrate
+and sublicense Applix software over a five-year period.  The agreement contemplated yearly
+amendments on the March anniversary date.  In March 2001, the parties entered into the first
+amendment.   On December 31, 2001, the parties entered into a second amendment ( the
+“December 31, 2001 amendment”) even though the March 2001 amendment was still in effect
+and not due to be amended until March 2002.  The December 31, 2001 amendment granted the
+Partner rights to resell additional products for a one-year term.
+6. Under Statement of Position 97-2 (“SOP 97-2”), if the December 31, 2001
+amendment granted the Partner rights to any “unspecified additional software products”
+(emphasis in original) then the transaction would need to be accounted for as a subscription and
+revenue recognized ratably over the one-year term of the agreement.
+7. However, Applix determined that it was appropriate to recognize the entire
+amount of the Partner license revenue as of December 31, 2001, even though the Respondent
+knew, or was reckless in not knowing, that the amendment granted the Partner the right to resell
+Applix’s new product, Integra, which the company had recently announced (in late 2001) as its
+next-generation product.  Revenue recognition was improper.  In late 2001, Applix expected
+Integra to become generally available during the one-year term covered by the December 31,
+4
+2001 amendment.  The Partner understood it obtained the rights to resell Integra as part of the
+December 31, 2001 amendment as did the Applix salesperson directly involved in negotiations
+with the Partner.
+8. On January 29, 2002, Applix announced revenue of $40.3 million and a net loss
+of $9.9 million for the year ended December 31, 2001.  By improperly including the entire
+$898,000 license revenue amount in revenue for 2001, Applix overstated its revenue by 2.3%
+and understated its net loss by 8.3%.  The inclusion of that revenue enabled Applix to meet a
+previously announced $40 million revenue goal.  On April 1, 2002, Applix filed a Form 10-K
+with the Commission, that contained financial statements that included the improperly recorded
+revenue.
+9. During 2002, the Partner obtained license codes for Integra.  Although
+the Partner did not actually sell any Integra during the year, the Partner made Integra sales
+presentations to customers during 2002.   In fact, Applix marketing employees provided
+information to assist the Partner in drafting sales presentations.  Applix also prepared a business
+plan that specifically referenced the Partner’s rights to resell Integra pursuant to the terms of the
+December 31, 2001 amendment.  Lastly, in figuring the fee the Partner owed Applix at year end
+2002, under a formula based on a percentage of Applix’s 2001 revenue from sales of goods the
+Partner was licensed to resell, Applix included Integra sales in the calculation, thereby increasing
+the amount the Partner was required to pay.
+10. In the second improperly reported transaction, Applix included $341,000 of
+revenue for the second quarter of 2002 from a transaction with a German customer, even though
+the customer had approximately five additional months after quarter close to either accept or
+reject the software goods.  The payment terms on the transactions required the customer to pay
+50% on acceptance and 50% within ninety days.  Applix knew of the contingent sales provision,
+knew of the existence of a specified testing period that was scheduled to last for most of that five
+month period and knew of the payment terms.  Applix knew, or was reckless in not knowing,
+that the customer had not accepted the software product by the end of the second quarter of
+2002.  Applix generated an invoice dated June 30, 2002 falsely indicating that payment was due
+in thirty days.
+11. On July 18, 2002, Applix announced revenue of $9.2 million and a net loss of
+$675,000 for the quarter ended June 30, 2002.  Applix’s press release highlighted that the net
+loss was a “74% improvement” over the net loss for the same quarter of the prior year.  By
+improperly including the German customer revenue, Applix overstated its revenue by 3.9% and
+understated its net loss by 33.6%.  The inclusion of the German customer revenue also enabled
+Applix to come within 1% of an internal quarterly revenue goal.  On August 14, 2002, Applix
+6 On July 25, 2002, Applix filed a Form S-8 Registration Statement to register shares for a
+directors stock option plan.   The filing incorporated by reference the December 31, 2001 Form
+10-K and all reports filed subsequent to the Form S-8 until the filing of a post-effective
+amendment.
+  On February 5, 2003, Applix filed a Form 8-K related to the sale of a division.
+That filing included a pro-forma statement of operations for the nine months ended September
+30, 2002 and accordingly included the improperly recorded June 30, 2002 revenue from the
+German customer.
+5
+filed a Form 10-Q with the Commission that contained financial statements that included the
+improperly recorded revenue.
+6
+12. Applix prepared an audit confirmation dated November 26, 2002, for the
+transaction with the German customer.  The confirmation falsely indicated that the first 50%
+payment (i.e., the payment due on acceptance) was due December 31, 2002.  Upon review of the
+confirmation in early December 2002, the outside auditors questioned Applix as the auditors had
+been informed that payment was due within 30 days of the invoice date of June 30, 2002, the last
+day of the quarter.  In mid-January 2003, Applix informed the outside auditors of an issue
+concerning when the German customer had accepted under the terms of the agreement.  The
+outside auditors told Applix that the company needed to investigate the matter to determine what
+transpired.
+13. Applix senior management informed the audit committee of the acceptance issue.
+Following up on that information from management, on January 27, 2003, Applix’s audit
+committee held a telephonic meeting concerning the transaction with the German customer.  At
+that meeting, Applix senior management failed to explain that when they made the revenue
+recognition decision, they knew of the existence of a specified testing period that was scheduled
+to last for approximately five months after the end of the second quarter.  Applix senior
+management failed to fully disclose and explain the generation of the false invoice and did not
+reveal the existence of the false audit confirmation or the fact that the outside auditors had raised
+questions when they reviewed the audit confirmation.  Two days after the meeting, Applix’s
+audit committee met with the outside auditors and voted to retain the company’s regular outside
+counsel to conduct an internal investigation of the German transaction.
+14.  On February 5, 2003, the audit committee met with the outside auditors
+concerning the Partner license revenue matter and voted to retain the company’s regular outside
+counsel to conduct an internal investigation of the transaction.
+15. After obtaining the results of counsel’s investigations, the Applix board of
+directors requested and obtained the chief executive officer’s resignation.  The board did not
+request the chief financial officer’s (“CFO”) resignation at that time.  Applix proposed to the
+outside auditors that the chairman of the audit committee oversee the CFO’s activities and the
+auditors agreed to this arrangement.  In June 2003, the CFO was asked to and did resign.
+6
+C. VIOLATIONS
+16. As a result of the conduct described above, Applix violated Section 17(a) of the
+Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, which prohibit
+fraudulent conduct in connection with the offer, sale or purchase of securities.
+17. Also as a result of the conduct described above, Applix violated Section 13(a) of
+the Exchange Act and Rules 13a-1, 13a-11, 13a-13 and 12b-20 thereunder.
+18. Because Applix improperly recorded revenue, its books, records and accounts did
+not, in reasonable detail, accurately and fairly reflect its transactions and dispositions of assets.
+19. In addition, Applix failed to implement internal accounting controls relating to its
+revenue accounts sufficient to provide reasonable assurances that these accounts were accurately
+stated in conformity with generally accepted accounting principles.
+20. As a result of the conduct described above, Applix violated Section 13(b)(2)(A)
+of the Exchange Act, which requires reporting companies to make and keep books, records, and
+accounts which, in reasonable detail, accurately and fairly reflect their transactions and
+dispositions of their assets.
+21. Lastly, as a result of the conduct described above, Applix violated Section
+13(b)(2)(B) of the Exchange Act and Rule 13b2-1 thereunder, which require all reporting
+companies to devise and maintain a system of internal accounting controls sufficient to provide
+reasonable assurances that transactions are recorded as necessary to permit preparation of
+financial statements in conformity with generally accepted accounting principles; and prohibit
+persons from directly or indirectly falsifying or causing to be falsified any book, record, or
+account.
+D. ONGOING COOPERATION
+22. In determining to accept the Offer, the Commission has considered the following
+undertaking by the Respondent -  Applix shall cooperate fully with the Commission in any
+and all investigations, litigations or other proceedings relating to or arising from the matters
+described in this Order.   Applix shall: (i) produce, without service of a notice or subpoena, any
+and all documents and other information requested by the Commission’s staff; (ii) use its best
+efforts to cause its employees to be interviewed by Commission’s staff at such times as the staff
+reasonably may direct; (iii) use its best efforts to cause its employees to appear and testify
+truthfully and completely without service of a notice or subpoena in such investigations,
+depositions, hearings or trials as may be requested by Commission’s staff.
+7
+E. UNDERTAKINGS
+Respondent undertakes to:
+ 1. Retain, through its Board of Directors, w ithin thirty days after the entry of this
+Order, an Independent Financial Policies Consultant (“Financial Policies Consultant”), not
+unacceptable to to the staff of the Commission, to review Applix’s financial and accounting
+policies and procedures relating to: (i) revenue recognition on software licensing agreements,
+including the consideration of SOP 97-2 and documentation of that consideration; (ii) the
+segregation of duties between sales and finance employees in revenue recognition
+determinations; (iii) the signing and dating of material sales contracts and purchase orders and
+the retention by Applix corporate finance organization of all such contracts and purchase orders;
+(iv) written documentation that all sales contingencies have been met in material revenue
+transactions; (v) the generation and issuance to customers of sales invoices; and (vi) the
+preparation and review of accounts receivable confirmations.  The Financial Policies Consultant
+shall also consider, based on his/her review, the nature and extent of Applix Board of Directors
+training required to minimize the possibility of future violations of the federal securities laws by
+Applix, acting through its finance and accounting employees.  At the conclusion of the review,
+which in no event shall be more than 90 days after the date of entry of this Order, the Financial
+Policies Consultant shall submit a Report to Applix and to the Boston District Office of the
+Commission.  The Report shall address the issues described above and shall include a
+description of the review performed, the conclusions reached and the Financial Policy
+Consultant's recommendations for changes in or improvements to policies and procedures,
+including recommendation as to the nature and extent of Board of Directors training.
+2. Respondent shall adopt all of the Financial Policies Consultant’s
+recommendations for changes in or improvement to policies and procedures as set forth below;
+provided however, that within 135 days after the date of entry of the Order, Respondent shall in
+writing advise the Financial Policies Consultant and the staff of the Commission’s Boston
+District Office of any recommendation that Respondent considers to be unnecessary,
+inappropriate, unreasonable, impractical or infeasible.  Respondent need not adopt any such
+recommendation at that time but shall propose in writing an alternative policy or procedure
+designed to achieve the same objective.
+3. As to any recommendation with respect to Respondent’s policies and procedures
+on which Respondent and the Financial Policies Consultant do not agree, they shall make a good
+faith attempt to reach agreement within 165 days of the date of entry of the Order.  In the event
+the Respondent and the Financial Policies Consultant are unable to agree on an alternative
+proposal, Respondents will follow the recommendation of the Financial Policies Consultant.  To
+the extent the Financial Policies Consultant proposes, in his/her report, alternative
+recommendations, any one of which is intended to address a given matter, Respondent may
+adopt one of the proposed alternatives and need not notify the Financial Policies or the staff of
+the Commission’s Boston District Office of alternative recommendations not adopted.
+4. Applix (i) shall not have the authority to terminate the Financial Policies
+Consultant, without the prior written approval of the Commission’s Boston District Office; (ii)
+shall compensate the Consultant, and persons engaged to assist the Consultant, for services
+8
+rendered pursuant to this Order at their reasonable and customary rates; and, (iii) shall not be in
+and shall not have an attorney-client relationship with the Consultant and shall not seek to
+invoke the attorney-client or any other doctrine or privilege to prevent the Consultant from
+transmitting any information, reports, or documents to the staff of the Commission; and
+5. Applix shall require the Financial Policies Consultant 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 Financial Policies Consultant shall not enter into any employment,
+consultant, attorney-client, auditing or other professional relationship with Applix, or any of its
+present or former affiliates, directors, officers, employees, or agents acting in their capacity as
+such.  The agreement will also provide that the Independent Consultant 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 Financial Policies Consultant in performance of his/her duties under this Order shall not,
+without prior written consent of the Commission’s Boston District Office, enter into any
+employment, consultant, attorney-client, auditing or other professional relationship with Applix,
+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.
+IV.
+In view of the foregoing, the Commission deems it appropriate to impose the sanctions
+agreed to in Respondent Applix’s Offer.
+Accordingly, it is hereby ORDERED that:
+A.  Respondent Applix cease and desist from committing or causing any violations
+and any 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, 13a-11, 13a-13
+and 13b2-1 thereunder.
+B. Respondent shall comply with the undertakings enumerated in Section III. E,
+above.
+C. Deadlines:  For good cause shown, the Commission staff may extend any of the
+procedural deadlines set forth herein.
+By the Commission.
+Nancy M. Morris
+Secretary

raw/aaer/2006/AAER-2361.txt ADDED Viewed

	@@ -0,0 +1,1384 @@

+     SEC.gov | Alan C. Goldsworthy, Walter T. Hilger, and Mark E. Sullivan
+         !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\/498171","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
+              Alan C. Goldsworthy, Walter T. Hilger, and Mark E. Sullivan
+        Alan C. Goldsworthy, Walter T. Hilger, and Mark E. Sullivan
+                  U.S. SECURITIES AND EXCHANGE COMMISSION  WASHINGTON, D.C.
+       Litigation Release No. 19521 / January 4, 2006
+	   Accounting and Auditing Enforcement Release No.2361 / January 4, 2006
+         Securities and Exchange Commission v. Alan C. Goldsworthy, Walter T. Hilger, and Mark E. Sullivan , Civil Action No. 06-CV-10012-MLW (D. Mass.)
+	    SEC CHARGES FORMER CEO, CFO AND CURRENT EXECUTIVE OF APPLIX , INC. WITH ACCOUNTING FRAUD
+ The Securities and Exchange Commission today brought civil fraud charges against two former officers and a current executive of Applix, Inc., a Westborough, Massachusetts Internet software company.  In the suit, filed in federal court in the District of Massachusetts, the Commission alleged that former CEO Alan C. Goldsworthy of Gloucester, Massachusetts; former CFO Walter T. Hilger of Natick, Massachusetts; and Mark E. Sullivan of Bridgewater, Massachusetts, Applix's current Director of World-Wide Operations participated in two fraudulent revenue recognition schemes, causing Applix to report inflated revenue and understated net loss figures for the year ended December 31, 2001 and for the quarter ended June 30, 2002.
+ According to the complaint, the three defendants engaged in two separate schemes to inflate revenue reported in Applix's publicly-filed financial statements and heralded in press releases.  In the first scheme, Applix prematurely recognized $898,000 in revenue in its Form 10-K for the year ended December 31, 2001.  The revenue, generated in a December 31, 2001 transaction, enabled Applix to meet its publicly announced year-end revenue goal of $40 million.  The complaint alleges that the three defendants collectively agreed to recognize the revenue during 2001 despite knowing that Applix was prohibited from doing so under generally accepted accounting principles.  The complaint also alleges that Goldsworthy and Hilger both received year-end bonuses based on the company's falsely inflated financial results.  In the second scheme, the defendants allegedly caused Applix to report improperly $341,000 in revenue from a transaction with a German customer in its Form 10-Q for the quarter ended June 30, 2002.  The complaint alleges that the defendants did so even though they knew that the customer had a six-month right to return the software product and that no revenue should have been recorded until the customer had definitively accepted the product.  By reporting this revenue, Applix was able to falsely trumpet a "74%  improvement in Net Loss."  Again, Goldsworthy and  Hilger allegedly received bonuses based on the false revenue figures.
+ On February 28, 2003, Applix announced that the company would restate its financial statements for the two periods involved and that Goldsworthy had resigned.  Thereafter, on March 31, 2003, Applix filed its Form 10-K for the year ended December 31, 2002, a restated Form 10-K for December 31, 2001, and restated Forms 10-Q for the first three quarters of 2002.  Applix also filed a restated Form 8-K on April 4, 2003.
+ In its complaint, the Commission requests that the court issue a final judgment permanently enjoining Goldsworthy, Hilger and Sullivan from violating or aiding and abetting violations of the antifraud, periodic reporting, record keeping and internal controls provisions of the federal securities laws.  The Commission also seeks disgorgement of the bonuses Goldsworthy and Hilger received based on the fraudulent financial statements.   In addition, the Commission's complaint asks the court to impose civil monetary penalties and an order permanently barring the defendants from acting as officers or directors of any public company.   The complaint alleges that by their conduct, the defendants violated Section 17(a) of the Securities Act of 1933 (Securities Act") and Sections 10(b), 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Securities Exchange Act of 1934 ("Exchange Act") and Exchange Act Rules 10b-5, 12b-20, 13a-1, 13a-11, 13a-13 and 13b2-1, and additionally as to Goldsworthy and Hilger, Rule 13b2-2, which prohibits officers of a company from lying to auditors.  The complaint also alleges that Hilger and Sullivan violated Exchange Act Section 13(b)(5), which prohibits knowing falsification of books and records at a public company.
+ In a related administrative proceeding, the Commission issued a settled Order Instituting Cease-and-Desist Proceedings, Making Findings, and Imposing Cease-and-Desist Order Pursuant to Section 8A of the Securities Act of 1933 and Section 21C of the Securities Exchange Act of 1934 against Applix, Inc.  The Order finds that Applix materially overstated net income in the two periodic reports and a registration statement filed with the Commission.  Applix, while neither admitting nor denying the Order's findings, consented to the entry of the Order finding that Applix violated 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, 13a-11,13a-13 and 13b2-1 thereunder.  The company also agreed to undertakings including the hiring of an independent Financial Policies Consultant to review the company's internal controls, board oversight and business practices.   (Rel. 34-53049; AAER Rel. 2359; File No. 3-12138 ).
+   SEC Complaint in this matter
+   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-2362.pdf ADDED Viewed

Binary file (43.8 kB). View file

raw/aaer/2006/AAER-2363.txt ADDED Viewed

	@@ -0,0 +1,110 @@

+UNITED STATES OF AMERICA
+Before the
+SECURITIES AND EXCHANGE COMMISSION
+SECURITIES EXCHANGE ACT OF 1934
+Release No. 53125 / January 13, 2006
+ACCOUNTING AND AUDITING ENFORCEMENT
+Release No. 2363 / January 13, 2006
+ADMINISTRATIVE PROCEEDING
+File No. 3-11091
+:
+In the Matter of
+William T. Fricke, CPA
+:
+:
+:
+:
+ORDER GRANTING APPLICATION FOR
+REINSTATEMENT TO APPEAR AND PRACTICE
+BEFORE THE COMMISSION AS AN ACCOUNTANT
+:
+On April 24, 2003, William T. Fricke ("Fricke") was denied the privilege of appearing or
+practicing as an accountant before the Commission as a result of a settled order instituting public
+administrative and cease-and-desist proceedings against Fricke pursuant to Section 21C of the
+Securities Exchange Act of 1934 (“Exchange Act”) and Rule 102(e) of the Commission's Rules
+of Practice.
+1  Fricke consented to the entry of the order, and imposition of the remedial sanctions
+set forth in the order, without admitting or denying the findings therein, except as to the
+Commission’s jurisdiction and the subject matter of the proceedings.
+From 1989 until August 1998, Fricke was a partner at BKR Metcalf Davis (“Metcalf
+Davis”) and he served as the concurring partner in Metcalf Davis’s audit of Chancellor
+Corporation’s (“Chancellor”) 1998 financial statements.  According to the Commission’s order,
+Fricke and the engagement partner allegedly engaged in improper professional conduct in
+auditing Chancellor’s 1998 financial statements and caused Chancellor to materially overstate its
+revenue, income and assets for 1998.  In addition, the Commission alleged that Fricke and the
+engagement partner willfully violated Section 10A of the Exchange Act by failing to design
+appropriate audit procedures to determine whether or not Chancellor’s senior management had
+committed fraud and by their failure to inform Chancellor’s audit committee of the suspected
+fraud.
+1 See Accounting and Auditing Enforcement Release No. 1762, dated April 24, 2003.  Fricke was permitted,
+pursuant to the order, to apply for reinstatement after two years upon making certain showings.
+This order is issued in response to Fricke'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 and as an independent accountant.
+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, Fricke
+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.
+In his capacity as an independent accountant Fricke attests that he will comply with all
+requirements of the Commission and the Public Company Accounting Oversight Board
+(“PCAOB”), including, but not limited to, all requirements relating to registration, inspections,
+concurring partner reviews and quality control standards.
+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 Fricke, it appears that he has complied with the terms of the April 24, 2003 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 Fricke, 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 Fricke, by registering with the PCAOB and undertaking 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, in his practice before the Commission as an independent accountant, has
+shown good cause for reinstatement.  Therefore, it is accordingly,
+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).
+ORDERED pursuant to Rule 102(e)(5)(i) of the Commission's Rules of Practice that
+William T. Fricke, CPA is hereby reinstated to appear and practice before the Commission as an
+accountant.
+By the Commission.
+Nancy M. Morris
+Secretary

raw/aaer/2006/AAER-2364.txt ADDED Viewed

	@@ -0,0 +1,1375 @@

+     SEC.gov | Sport-Haley, Inc., Steve S. Auger, and Kenneth R. LeCrone
+         !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\/498226","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
+              Sport-Haley, Inc., Steve S. Auger, and Kenneth R. LeCrone
+        Sport-Haley, Inc., Steve S. Auger, and Kenneth R. LeCrone
+                   U.S. SECURITIES AND EXCHANGE COMMISSION
+ Litigation Release No. 19532 / January 19, 2006
+ Accounting and Auditing Enforcement Release No. 2364 / January 19, 2006
+  SEC v. Sport-Haley, Inc., Steve S. Auger, Kenneth R. LeCrone , Civ. Action No. 03-N-1917 (CBS) (District of Colorado)
+ The Securities and Exchange Commission ("Commission") announced that on January 17, 2006, Judge Edward W. Nottingham of the United States District Court for the District of Colorado entered final judgments by consent against defendants Sport-Haley, Inc. and Steve S. Auger in the above-referenced matter.  Sport-Haley, located in Denver, Colorado, designs, markets, and contracts for the manufacture of golf apparel and outerwear under the Haley-Registered Trademark label. Steve S. Auger, of Morrison, Colorado, was formerly the controller of Sport-Haley.  The Commission's complaint alleged that Sport-Haley materially overstated work-in-process ("WIP") inventory, improperly capitalize period costs and materially misstated losses on the sale of headwear equipment during its 1998 and 1999 fiscal years.  According to the Complaint, as a result of these and other accounting errors, Sport-Haley filed with the Commission materially incorrect financial statements that overstated the company's 1998 fiscal year income by $1.5 million or 41 percent and its 1999 fiscal year income by $311,000 or 22 percent.   The Complaint alleged that Auger reviewed and signed filings with the Commission that he knew or was reckless in not knowing contained false financial statements.
+ Without admitting or denying the allegations of the Commission's complaint, Sport-Haley consented to the issuance of a final judgment which enjoins it from further violations of Sections 17(a)(2) and 17(a)(3) of the Securities Act, Sections 13(b)(2) and 15(d) of the Exchange Act and Rules 12b-20, 15d-1, and 15d-13 thereunder.  Without admitting or denying the allegations of the Commission's complaint,, Auger consented to the issuance of a final judgment which enjoins him from further violations of Section 17(a) of the Securities Act, Sections 10(b) and  13(b)(5) of the Exchange Act  and Rules 10b-5 and 13b2-1 thereunder, and from aiding and abetting violations of Sections 13(b)(2) and 15(d) of the Exchange Act and Rules 12b-20, 15d-1, and 15d-13 thereunder.  Auger was further barred from acting as an officer or director of any public company for a period of five years.
+ On December 21, 2005, the complaint was dismissed by stipulation as to defendant Kenneth R. LeCrone, formerly an independent auditor for the company.  On December 22, 2005, the Commission issued an order against LeCrone which ordered him to cease and desist from committing or causing any violations and any future violations of Section 17(a) of the Securities Act, Section 10(b) of the Exchange Act and Rule 10b-5
+promulgated thereunder; and from causing any violations and any future violations of Section 15(d) of the Exchange Act, and Rules 12b-20, 15d-1 and 15d-13 promulgated thereunder.  LeCrone consented to the order without admitting or denying the factual allegations contained in the order. [Securities Act Rel. No. 8647/December 22, 2005]
+ 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-2365.txt ADDED Viewed

	@@ -0,0 +1,1375 @@

+     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\/498231","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. 19533 / January 20, 2006
+ Accounting and Auditing Enforcement  Release No.  2365 / January 20, 2006
+  Securities and Exchange Commission 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 the Honorable R. David Proctor, United States District Judge for the Northern District of Alabama, entered a Final Judgment As To Defendant Scott Carey ("Carey"), enjoining him from future violations of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act"), and from aiding and abetting violations of Section 13(a) of the Exchange Act and Rules 10b-5, 12b-20 and 13a-1 thereunder.  Carey consented to the entry of the judgment without admitting or denying any of the allegations of the Commission's Complaint.  Carey was not ordered to pay a civil penalty based upon the representations in his sworn financial statements.
+ 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.  During the relevant period, Carey was the Strategic Account Manager for the southeastern United States for Nike, Inc., a shoe and sportswear company.  The Complaint alleged that in 1999, Carey signed confirmations which falsely represented that Nike owed various amounts of "co-op" credits to Just for Feet.   The overstatement of income and assets resulting from this misconduct, and other misconduct in which Carey was not involved, 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);
+and  L.R. 18731  (June 1, 2004);
+ L.R. 19163  (March 31, 2005);
+and  L.R. 19438  (October 20, 2005).
+ 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-2366.txt ADDED Viewed

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

+     SEC.gov | Stansbury Holdings Corporation, Aldine J. Coffman, Jr., Dennis R. Staal, CPA, Richard E. Sellers, CPA, and Sellers &amp; Associates P.C.
+         !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\/498251","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 Corporation, Aldine J. Coffman, Jr., Dennis R. Staal, CPA, Richard E. Sellers, CPA, and Sellers &amp; Associates P.C.
+        Stansbury Holdings Corporation, Aldine J. Coffman, Jr., Dennis R. Staal, CPA, Richard E. Sellers, CPA, and Sellers &amp; Associates P.C.
+                   U.S. SECURITIES AND EXCHANGE COMMISSION
+ Litigation Release No. 19537 / January 20, 2006
+ Accounting and Auditing Enforcement Release No. 2366 / January 20, 2006
+  Securities and Exchange Commission v. Stansbury Holdings Corporation, Aldine J. Coffman, Jr., Dennis R. Staal, CPA, Richard E. Sellers, CPA, and Sellers &amp; Associates P.C. , Civil Action No. 06-CV-00088 (D. Colo.)
+ The Securities and Exchange Commission announced today that it filed civil fraud charges against Stansbury Holdings Corporation, a mining company, and two former officers, as well as aiding and abetting charges against the company's auditors.  In the suit, filed in federal court in the District of Colorado, the Commission alleges that former chief executive officer Aldine J. Coffman, Jr. of Denver, Colorado; former chief financial officer Dennis R. Staal of Chadron, Nebraska; and Richard E. Sellers and Sellers &amp; Associates P.C. of Henderson, Nevada, Stansbury's auditors, caused Stansbury to overstate its assets in numerous periodic filings and in offering documents.
+ According to the complaint, for the period June 30, 1999 through March 31, 2002, Stansbury valued certain of it mining properties at more than $18 million despite numerous events demonstrating they were worth far less.  The complaint alleges that the defendants failed to disclose possible losses and make necessary adjustments based on foreclosure proceedings affecting Stansbury's largest assets.
+ The complaint alleges that by its conduct, Defendant Stansbury violated Section 17(a) of the Securities Act of 1933 (Securities Act) and Sections 10(b), 13(a), 13(B)(2)(A) and 13(b)(2)(B) of the Securities Exchange Act of 1934 (Exchange Act) and Exchange Act Rules 10b-5, 12b-20, 13a-1, 13a-13 and 13b2-1.  The complaint also alleges that Coffman and Staal violated Section 17(a) of the Securities Act and Sections 10(b) and 13(b)(5) of the Exchange Act and Exchange Act Rules 10b-5 and 13b2-1, and aided and abetted Stansbury's violations of Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Exchange Act Rules 12b-20, 13a-1 and 13a-13.  The complaint also alleges that Sellers and Sellers &amp; Associates aided and abetted Stansbury's violations of Sections 10(b) and 13(a) of the Exchange Act and Exchange Act Rules 10b-5, 12b-20, 13a-1 and 13a-13.  The Commission requests that the court enjoin Stansbury, Coffman, Staal, Sellers and Sellers &amp; Associates from violating or aiding and abetting violations of the antifraud, periodic reporting, record keeping and internal controls provisions of the federal securities laws.  The Commission also seeks disgorgement of the salaries Coffman and Staal received during the time period of the false financial statements.  In addition, the Commission's complaint asks the court to impose civil monetary penalties, an order permanently barring Coffman and Staal from acting as officers or directors of any public company, and an order barring Coffman from participating in an offering of penny stock.
+ In a related matter, the Commission instituted administrative proceedings against Michael J. Healey for acting as an unregistered broker-dealer when selling Stansbury securities.  (Exchange Act Rel. No. 53144).  The Commission previously revoked the registration of Stansbury's securities pursuant to Section 12(j) of the Exchange Act.  (Exchange Act Rel. No. 48283).
+           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-2367.pdf ADDED Viewed

Binary file (76 kB). View file

raw/aaer/2006/AAER-2367.txt ADDED Viewed

	@@ -0,0 +1,295 @@

+ UNITED STATES OF AMERICA
+ Before the
+ SECURITIES AND EXCHANGE COMMISSION
+SECURITIES EXCHANGE ACT of 1934
+Release No.  53162 / January 20, 2006
+ACCOUNTING AND AUDITING ENFORCEMENT
+Release No.  2367 / January 20, 2006
+ADMINISTRATIVE PROCEEDING
+File No. 3-12155
+In the Matter of
+HERBERT J. MORTLAND,
+CPA and MORTLAND & CO.,
+P.C.,
+Respondents.
+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 Herbert J.
+Mortland, CPA (“Mortland”) and Mortland & Co., P.C. (“Mortland & Co.”) (hereinafter
+referred to collectively as “Respondents”) pursuant to Rule 102(e)(1)(ii) of the
+Commission’s Rules of Practice.
+1
+II.
+In anticipation of the institution of these proceedings, Respondents have 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 them and the
+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.
+subject matter of these proceedings, which are admitted, Respondents consent 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 Respondents’ Offer, the Commission finds2 that:
+A. SUMMARY
+These proceedings arise out of the diversion of approximately $4.5 million of
+customer funds to pay proprietary trading losses of Rocky Mountain Securities &
+Investments, Inc. (“Rocky Mountain”), a broker-dealer that became registered with the
+Commission in 1980 and ceased operations on February 3, 2003.  Through the diversion
+of customer funds, Rocky Mountain violated the net capital, customer reserve, books and
+records, and notice provisions of the Securities Exchange Act of 1934 (“Exchange Act”).
+Rocky Mountain also made false filings with the Commission and sent its customers a
+materially false financial statement.
+B. RESPONDENTS
+1. Herbert J. Mortland, a certified public accountant licensed in the State of
+Missouri, is the owner of Mortland & Co., an accounting firm with offices in Clayton,
+Missouri.
+2. Mortland & Co. performed the audit of the financial statements of Rocky
+Mountain for the fiscal year ended June 30, 2002, and certain supplementary reports,
+including Rocky Mountain’s Computation of Aggregate Indebtedness and Net Capital
+and Rocky Mountain’s Computation of Reserve Requirement (the “2002 audit”).
+C. FACTS
+1. On August 27, 2002, Rocky Mountain filed its June 2002 financial
+statements and supplementary reports, accompanied by Mortland & Co.’s audit report
+and supplemental report, with the Commission on Form X-17A-5.  Rocky Mountain’s
+financial statements and supplementary reports, and Mortland & Co.’s audit report and
+supplemental report, were mailed to Rocky Mountain’s customers.
+2. Mortland & Co.’s audit report contained an unqualified opinion representing
+that Mortland & Co. had conducted an audit in accordance with Generally Accepted
+Auditing Standards (“GAAS”) and that Rocky Mountain’s financial statements fairly
+presented the financial position and results of operations of Rocky Mountain in all material
+2 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
+respects and that those financial statements had been prepared in conformity with
+Generally Accepted Accounting Principles (“GAAP”).  In fact, Mortland & Co. had not
+conducted the audit in accordance with GAAS and Rocky Mountain’s financial statements
+had not been prepared in conformity with GAAP.
+3. At the time Mortland conducted the 2002 audit, he was on notice that
+securities trading by Rocky Mountain through its proprietary accounts in 2000 had
+generated approximately $600,000 in losses that were not recorded in Rocky Mountain’s
+books and records, rendering the firm’s net capital and customer reserve calculations,
+among other things, materially inaccurate.
+4. Mortland & Co. and Mortland failed to conduct the 2002 audit in accordance
+with GAAS, as follows:
+a. Mortland’s audit opinion was based upon his sample review of
+certain underlying accounting data, but did not take into account conflicting data available
+to him that would have revealed material discrepancies in the proprietary securities
+positions reflected in Rocky Mountain’s books and records.  In performing audit
+procedures, Mortland also did not consider data available to him that cast doubt on the
+customer fund balance reflected in Rocky Mountain’s books and records.
+b. Rocky Mountain’s computations of net capital, aggregate
+indebtedness and customer reserve requirements were materially inaccurate because the
+firm’s books and records reflected materially inaccurate proprietary securities positions
+and a materially inaccurate balance in the customer funds account.  Because of
+Mortland’s audit failures with respect to Rocky Mountain’s proprietary securities positions
+and customer funds account, Mortland failed to detect Rocky Mountain’s materially
+inaccurate computations of net capital, aggregate indebtedness and customer reserve
+requirements.
+c. Mortland & Co.’s supplemental report, referenced in
+Paragraph III.C.1., represented that Mortland & Co. found no material inadequacies in
+Rocky Mountain’s practices and procedures.  Mortland’s audit should have, but did not,
+reveal the material inadequacies existing at Rocky Mountain during the relevant time
+frame.
+d. Mortland had made loans to Rocky Mountain’s head
+securities trader, which remained outstanding during the 2002 audit.  The outstanding
+loans from Mortland to the head trader compromised Mortland’s and Mortland & Co.’s
+independence. Rocky Mountain’s unrecorded securities trading losses in 2000 and the
+resulting obligation of Mortland to conduct the 2002 audit with an appreciation for the
+heightened level of risk presented by Rocky Mountain’s trading department aggravated
+Mortland’s lack of independence.
+3
+5. Based on the foregoing, the Commission finds that Mortland & Co. and
+Mortland 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 Mortland’s and Respondent Mortland & Co.’s Offer.
+Accordingly, it is hereby ORDERED, effective immediately, that:
+ A. Mortland and Mortland & Co. are denied the privilege of appearing or
+practicing before the Commission as accountants.
+B. After three years from the date of this order, Respondent Mortland 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 Mortland’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 Mortland, 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 Mortland, 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 Mortland 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 Mortland acknowledges his responsibility, as
+long as Respondent Mortland appears or practices before the Commission as an
+4
+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. After three year s from the date of this order, Respondent Mortland &
+Co. 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 an independent accountant. Such an
+application must satisfy the Commission that:
+1. Respondent Mortland & Co. 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;
+2. Respondent Mortland & Co. has been inspected by the Board and
+that inspection did not identify any criticisms of or potential defects in the firm’s quality
+control system that would indicate that any of its employees will not receive appropriate
+supervision;
+3. Respondent Mortland & Co. 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
+4. Respondent Mortland & Co. acknowledges its responsibility, as long
+as Respondent Mortland & Co. 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.
+D. The Commission will consider an application by Respondents Mortland
+and/or Mortland & Co. to resume appearing or practicing before the Commission provided
+that their state CPA licenses are current and they have 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 Respondents’
+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
+5

raw/aaer/2006/AAER-2368.txt ADDED Viewed

	@@ -0,0 +1,1375 @@

+     SEC.gov | Thomas P. Clark
+         !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\/498306","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
+              Thomas P. Clark
+        Thomas P. Clark
+                   U.S. SECURITIES AND EXCHANGE COMMISSION
+ Litigation Release No. 19548 /  January 30, 2006
+ Accounting and Auditing Enforcement  Release No. 2368 / January 30, 2006
+  SEC v. Thomas P. Clark,  , Civil Action No. CV 06-380 ADM/AJB (D. Minn.)
+ SEC Charges Former CFO of Health Risk Management, Inc. with Fraud
+ On January 27, 2006, the Securities and Exchange Commission (Commission) filed a civil action in the United States District Court for the District of Minnesota charging Thomas P. Clark, former Chief Financial Officer of Health Risk Management, Inc. (HMRI), with fraud and other securities violations.
+ The Commission's allegations arise from Clark's treatment of a $1.85 million settlement payment that he negotiated on behalf of HRMI and its wholly owned Medicaid HMO to settle an arbitration dispute with one of the HMO's healthcare providers.  According to the complaint, in August 2000, Clark, a resident of Edina, Minnesota, sought to hide the full amount of the settlement expense by simultaneously executing two agreements with the provider: (1) a settlement agreement, which required the HMO subsidiary to pay the provider $500,000 in exchange for a release; and (2) a $1.35 million five-year consulting agreement.  The complaint alleges that the consulting agreement required HRMI to pay a $1.35 million "retainer" for services that HRMI did not need and which were never provided.  The complaint further alleges that Clark booked the $1.35 million payment as an asset rather than as a settlement expense, causing HMRI to file materially false financial statements with the Commission for the second and third quarters of 2000.  The complaint also alleges that Clark failed to inform HRMI's outside auditors about the consulting agreement and the true dollar figure of the settlement.
+ The Commission seeks a Court order to permanently enjoin Clark 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, and from aiding and abetting HRMI's violations of Sections 13(a) and 13(b)(2)(A) of the Exchange Act and Rules 12b-20 and 13a-13.  The Commission also seeks a civil monetary penalty and an order barring Clark from acting as an officer or director of securities issuers.
+ 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-2370.pdf ADDED Viewed

Binary file (66.6 kB). View file

raw/aaer/2006/AAER-2373.txt ADDED Viewed

	@@ -0,0 +1,1375 @@

+     SEC.gov | Bruce E. Snyder, Jr.
+         !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\/498351","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
+              Bruce E. Snyder, Jr.
+        Bruce E. Snyder, Jr.
+                   U.S. SECURITIES AND EXCHANGE COMMISSION
+ Litigation Release No. 19557 / February 7, 2006
+ Accounting and Auditing Enforcement  Release No. 2373 / February 7, 2006
+  SEC v. Bruce E. Snyder, Jr. , Civil Action No. 03 CV 4658 (S.D.Tx.) (February 1, 2006)
+ Federal Jury Finds that Bruce E. Snyder, Jr., Former Chief Accounting Officer of Waste Management, Inc., Engaged in Securities Fraud
+ On February 1, 2006, a federal jury in Houston, Texas, returned a verdict finding that Bruce E. Snyder, Jr., the former Chief Accounting Officer of Waste Management, Inc. ("WMI"), violated the antifraud provisions of the federal securities laws by failing to make certain required disclosures which caused WMI's reported financial results for the first quarter of fiscal year 1999 to be materially false and misleading.  The jury also found that Snyder engaged in insider trading.  The jury reached its verdict after a four-week trial in the United States District Court for the Southern District of Texas (Houston Division).
+ The jury found that Snyder violated the antifraud provisions of the federal securities laws, Section 10(b) of the Securities and Exchange Act of 1934 ("Exchange Act") and Exchange Act Rule 10b-5, and Section 17(a) of the Securities Act of 1933.  The jury also found that Snyder aided and abetted WMI's violations of Section 13(a) of the Exchange Act and Exchange Act Rules 12b-20 and 13a-13, the reporting provisions of the federal securities laws.
+ The Commission's Complaint against Snyder alleged that he prepared, reviewed, and signed a materially false or misleading Form 10-Q that WMI filed with the Commission for the first quarter ended March 31, 1999, even though he knew, or was reckless in not knowing, that it failed to disclose that WMI's reported pretax income for that quarter included tens of millions of dollars of non-recurring income items.  The undisclosed income items inflated WMI's EPS by approximately $0.09 or 17%.  The Commission's Complaint further alleged that Snyder sold WMI stock on May 17, 1999, while in possession of the material, nonpublic information that WMI's reported pretax income for the first quarter of fiscal year 1999 included tens of millions of dollars of undisclosed, non-recurring income items.  The Complaint also alleged that Snyder sold WMI stock again on June 9, 1999, when, in addition to the aforementioned information, Snyder possessed material, nonpublic information that WMI's internal earnings projections showed a large shortfall against the second quarter 1999 EPS guidance WMI had provided to the investing public.
+ See Litigation Release NO.  18422  / October 22, 2003.
+           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-2375.txt ADDED Viewed

	@@ -0,0 +1,1374 @@

+     SEC.gov | Eric J. McCracken, 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\/498401","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 J. McCracken, et al.
+        Eric J. McCracken, et al.
+                   U.S. SECURITIES AND EXCHANGE COMMISSION
+ Litigation Release No. 19567 / February 16 , 2006
+ Accounting and Auditing Enforcement
+Release No.  2375/ February 16 , 2006
+  Securities and Exchange Commission v.  Eric J. McCracken, et al. , Civil Action No. 8:04-CV-02288-SDM-MAP (M.D. FL)
+ SEC Settles Case Against Eric J. McCracken, Former CFO of Aerosonic Corporation
+ The Securities and Exchange Commission (SEC) announced today that it has settled its civil injunctive action against Eric J. McCracken, the former Chief Financial Officer of airplane instrument manufacturer Aerosonic Corporation (Aerosonic).  McCracken consented, without admitting or denying the allegations in the Complaint, to the entry of a Final Judgment of Permanent Injunction and Other Relief (Final Judgment), which the court entered on February 10, 2006.  The Final Judgment permanently enjoins McCracken from violating Section 17(a) of the Securities Act of 1933 (Securities Act), and Sections 10(b) and 13(b)(5) of the Securities Exchange Act of 1934 (Exchange Act) and Rules 10b-5, 13b2-1, 13b2-2, and 13a-14, 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 bars him from serving as an officer or director of a public company.  The Final Judgment further orders McCracken to pay $40,000 in disgorgement, but does not impose a civil penalty against McCracken based on the sworn financial statements and other information he provided to the Commission.
+ In its Complaint, the SEC alleged that from January 1999 through December 2002, McCracken and Aerosonic's former CEO implemented various accounting schemes designed to artificially inflate Aerosonic's reported pre-tax earnings.  Among their schemes, they allegedly caused Aerosonic to overstate inventory by falsifying inventory records and by failing to provide adequate reserves for Aerosonic's obsolete and slow moving inventory.  In addition, McCracken and the former CEO allegedly caused Aerosonic to report inflated earnings by recording fictitious and premature revenue.  McCracken financially benefited from his fraudulent activities by reaping lucrative bonuses and by selling his Aerosonic stock while its price was artificially inflated as a result of Aerosonic's false filings and press releases.
+ For further information, see Litigation Release No.  18935  (October 20, 2004). [Securities and Exchange Commission v. John Mervyn Nabors and Eric J. McCracken, Civil Action No. 8:04-CV-02288-Merryday (M.D. Fla. Oct. 18, 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-2376.pdf ADDED Viewed

Binary file (27.4 kB). View file

raw/aaer/2006/AAER-2376.txt ADDED Viewed

	@@ -0,0 +1,56 @@

+UNITED STATES OF AMERICA
+Before the
+SECURITIES AND EXCHANGE COMMISSION
+SECURITIES EXCHANGE ACT OF 1934
+Release No.  53326 / February 16, 2006
+ACCOUNTING AND AUDITING ENFORCEMENT
+Release No. 2376 / February 16, 2006
+ADMINISTRATIVE PROCEEDING
+File No.  3-12208
+IN THE MATTER OF KEVIN M. HALL, CPA, AND ROSEMARY K. MEYER, CPA
+The United States Securities and Exchange Commission (Commission) announced the
+issuance of an Order Instituting Public Administrative Proceedings Pursuant to Rule 102(e) of
+the Commission’s Rules of Practice (Order) against Kevin Hall, CPA, and Rosemary Meyer,
+CPA.  In the Order, the Division of Enforcement (Division) and the Office of the Chief
+Accountant (OCA) allege that Hall and Meyer engaged in improper professional conduct in
+the audit of U.S. Foodservice, Inc. (USF) for fiscal year 1999 and interim review for the
+second quarter of fiscal year 2000.  Hall and Meyer were the engagement partner and senior
+manager, respectively, for the audit and review work that KPMG LLP performed for USF.
+In the Order, the Division and OCA allege that Hall and Meyer found numerous instances
+where USF recognized income when it should not have, but Hall and Meyer refused to act
+upon or failed to recognize these and other “red flags.”  The Division and OCA assert that
+Hall and Meyer discovered that USF had recognized substantial unearned “prepayments” of
+income and Hall and Meyer documented those as “audit exceptions” in their audit working
+papers.  The Division and OCA contend that the existence of prepayments directly and
+explicitly contradicted USF management’s repeated representations that USF did not obtain
+vendor prepayments.  The Division and OCA also allege that Hall and Meyer obtained and
+reviewed audit evidence that directly contradicted USF’s accounting for payments used to
+improperly reduce aging accounts receivable balances.
+Additionally, the Division and OCA allege in the Order that Hall and Meyer were
+responsible for a flawed audit design that allowed third party confirmations to go to persons
+without any apparent knowledge about the underlying information being confirmed, in
+violation of Generally Accepted Auditing Standards.  The Division and OCA also charge that
+Hall and Meyer were aware that USF incurred substantial penalties under a long-term supply
+contract, but Hall and Meyer did not require USF to expense these payments and furthermore
+failed to require USF to assess its exposure to a contingent liability under the contract.
+Finally, the Division and OCA allege that Hall and Meyer did not take the necessary
+additional steps to either clarify inconsistencies or bring problems to the attention of USF’s
+Audit Committee or others.
+A hearing will be scheduled before an Administrative Law Judge to determine whether such
+allegations are true, to afford the respondents an opportunity to establish defenses to the
+allegations, and to determine whether respondents should be censured by the Commission or
+temporarily or permanently denied the privilege of appearing or practicing before the
+Commission.  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.pdf ADDED Viewed

Binary file (33.9 kB). View file

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

Binary file (32.3 kB). View file

raw/aaer/2006/AAER-2379.txt ADDED Viewed

	@@ -0,0 +1,1387 @@

+     SEC.gov | KPMG LLP, 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\/498431","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
+              KPMG LLP, et al.
+        KPMG LLP, et al.
+                   U.S. SECURITIES AND EXCHANGE COMMISSION
+ Litigation Release No. 19573 / February 22, 2006
+ Accounting and Auditing Enforcement Release No. 2379 / February 22, 2006
+  SEC v. KPMG LLP, et al. , Civil Action No. 03 CV 0671 (DLC) (S.D.N.Y.)
+ Four Current or Former KPMG Partners Settle SEC Litigation Relating To Xerox Audits
+ Three Partners Agree to Permanent Injunctions, Record Penalties and SEC Suspensions; Fourth Partner Agrees to SEC Censure
+ On February 22, 2006, the Securities and Exchange Commission announced that all four remaining defendants in an action brought against them and KPMG LLP ("KPMG") by the agency in connection with a $1.2 billion fraudulent earnings manipulation scheme by the Xerox Corporation from 1997 through 2000 have agreed to settle the charges against them.  Three partners agreed to permanent injunctions, payment of record civil penalties and suspensions from practice before the Commission with rights to reapply in from one to three years.  The fourth partner agreed to be censured by the Commission.
+ The settlements relate to Xerox's fraudulent scheme that involved various manipulations of accounting for leases of Xerox office equipment.  The Commission alleged that the manipulations were necessary for Xerox to meet promises it made to Wall Street that its earnings would continue to grow.  The manipulations helped Xerox to "close the gap" between its actual performance and what it promised analysts.  KPMG was Xerox's independent auditor each of those years.  KPMG issued unqualified audit reports asserting that Xerox's financial statements were consistent with Generally Accepted Accounting Principles ("GAAP") and that KPMG had conducted an audit each year in accordance with Generally Accepted Auditing Standards ("GAAS").  The SEC alleged in its complaint against KPMG and five KPMG partners filed in 2003 that these statements were materially false and misleading and aided and abetted Xerox's filing of false financial reports with the Commission.  When Xerox retained new auditors in 2002, it restated $6.1 billion in equipment revenues and $1.9 billion in pre-tax earnings for 1997-2000.  The complaint alleged that KPMG and its partners knew or should have known about the improper topside adjustments that resulted in $3 billion of the restated revenues and $1.2 billion of the restated earnings.
+ The defendants whose settlements were announced are Ronald Safran, the KPMG engagement partner on the Xerox audit for 1998 and 1999; Michael Conway, the senior engagement partner on the Xerox audit for 2000; Anthony Dolanski, the engagement partner on the Xerox audit for 1997; and Thomas Yoho, the SEC concurring review partner for KPMG on the Xerox engagement from 1997-2000.  Safran, Conway and Dolanski each consented to the entry of final judgments against them by the U.S. District Court for the Southern District of New York.  Yoho agreed to the entry of a Commission order imposing a censure pursuant to Rule 102(e) of the SEC's Rules of Practice.  Each defendant entered into his settlement without admitting or denying the SEC's allegations or findings.
+ The final judgments, which are subject to approval by the Honorable Denise L. Cote, order the engagement partners to pay civil penalties that are the largest penalties ever imposed by the Commission against an individual auditor:  Safran and Conway to each pay a civil penalty in the amount of $150,000, and Dolanski to pay a penalty in the amount of $100,000.  The final judgments also order that Safran, Conway and Dolanski be permanently enjoined from violating certain provisions of the federal securities laws (Sections 17(a)(2) and (3) of the Securities Act of 1933) and from aiding and abetting violations of other securities laws (Section 13(a) of the Securities Exchange Act of 1934 and Rules 12b-20, 13a-1 and 13a-13 thereunder).  Safran, Conway and Dolanski each also consented to the issuance of an SEC Order based on the entry of the injunctions which will suspend them from appearing or practicing before the SEC as accountants.  Safran will be suspended with a right to reapply in three years, Conway in two, and Dolanski in one.
+ The SEC alleged in its federal court complaint that, in the course of serving as engagement partners for Xerox, Safran, Conway and Dolanski allowed Xerox to impose topside accounting adjustments that they knew or should have known did not comply with GAAP.  The SEC alleged that these partners failed to adequately test, or require Xerox to test, the assumptions Xerox used to justify its topside adjustments, nor did they test, or demand that Xerox test, to determine if the topside adjustments resulted in financial statements that fairly presented Xerox's financial results.  The SEC further alleged that, as a result of this conduct and other conduct alleged in the complaint, the engagement partners failed to exercise the professional care and skepticism required under GAAS and instead authorized the issuance of the KPMG audit reports that contained the false and misleading representation that KPMG conducted its audits in accordance with GAAS, and that Xerox's financial statements presented fairly, in all material respects, Xerox's financial position and results of operations in conformity with GAAP.
+ The settled SEC Order against Yoho finds that he engaged in improper professional conduct by failing to exercise appropriate due care and professional skepticism when he conducted an "in depth" review during the 2000 audit.  The Order finds that Yoho failed in his obligations as concurring review partner when he was informed of missing work papers, audit results that differed from reasonable expectations, lack of testing of significant topside revenue adjustments and unresolved differences between KPMG auditors in Brazil and those leading the engagement in Stamford, Conn.  The Order finds that rather than pursue these issues, Yoho prepared a brief report that did not disclose any of the issues found in the "in depth" review.
+ The Commission previously announced settled enforcement proceedings against KPMG LLP, a KPMG relationship partner on the Xerox audit, Xerox and six former senior executives of Xerox, all in connection with the fraudulent manipulative accounting. See Litigation Release No.  19191  / April 19, 2005 /Accounting and Auditing Enforcement Release No. 2235 / April 19, 2005 (KPMG LLP settlement); Litigation Release No.  19418  / October 6, 2005 / Accounting and Auditing Enforcement Release No. 2350 / December 2, 2005 (KPMG relationship partner settlement); Litigation Release No.  17465
+ / April 11, 2002 / Accounting and Auditing Enforcement Release No. 1542 / April 11, 2002 (Xerox settlement);
+ Litigation Release No.  18174  / June 5, 2003 / Accounting and Auditing Enforcement Release No. 1796 / June 5, 2003 (settlement of six former Xerox executives).  The Commission obtained civil penalties and disgorgement in all of these actions in excess of $55 million.
+ 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-2380.pdf ADDED Viewed

Binary file (57.7 kB). View file

raw/aaer/2006/AAER-2381.pdf ADDED Viewed

Binary file (34.2 kB). View file

raw/aaer/2006/AAER-2381.txt ADDED Viewed

	@@ -0,0 +1,113 @@

+ UNITED STATES OF AMERICA
+ before the
+ SECURITIES AND EXCHANGE COMMISSION
+SECURITIES EXCHANGE ACT OF 1934
+Release No.  53375 / February 27, 2006
+ACCOUNTING AND AUDITING ENFORCEMENT
+Release No. 2381 / February 27, 2006
+ADMINISTRATIVE PROCEEDING
+File No.  3-12217
+      :
+ :
+ :
+In the Matter of    : ORDER INSTITUTING ADMINISTRATIVE
+      : PROCEEDINGS PURSUANT TO RULE
+LEONARD GOLDNER,    : 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 Leonard
+Goldner (“Goldner” or “Respondent”) pursuant to Rule 102(e)(3)(i) of the Commission’s Rules of
+Practice.1
+1 Rule 102(e)(3)(i) provides in pertinent part as follows:
+ The Commission, with due regard to the public interest and without  preliminary hearing,
+may, by order, . . . suspend from appearing or practicing before it any . . . attorney . . . 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
+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. 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 Co mmission finds that:
+  1.   Goldner, age 58, was Symbol Technologies, Inc.’s (“Symbol”) Secretary
+and General Counsel from 1990 until his resignation in June 2003.  In June 2001, he was also
+promoted to Executive Vice President from Senior Vice President.
+ 2. Symbol, a Delaware co rporation with principal offices in Holtsville, New
+York, is engaged in the design, manufacture, marketing and servicing of integrated mobile and
+wireless information management systems utilizing bar code scanners and similar devices.
+Symbol’s common stock is, and was at all times relevant to this proceeding, 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.
+  3. On June 3, 2004, the Commission filed a complaint against Goldner and
+others in the United States District Court for the Eastern District of New York alleging that they
+violated antifraud and other provisions of the federal securities laws, SEC v. Symbol Technologies,
+Inc., et al., 04-cv-2276 (LDW).   On February 7, 2006, the court entered a final judgment, to which
+Goldner consented without admitting or denying the allegations of the complaint, that, inter alia,
+permanently enjoined Goldner from: (i) violating Section 17(a) of the Securities Act of 1933,
+Sections 10(b), 13(b)(5), and 16(a) of the Exchange Act and Rules 10b-5, 13b2-1, and 16a-3
+thereunder, and (ii) engaging in conduct that would make him liable as a controlling person,
+pursuant to Section 20(a) of the Exchange Act, for an issuer’s violations of Sections 13(a),
+13(b)(2), and 14(a) of the Exchange Act and Rules 12b-20, 13a-1, 13a-13, 14a-3, and 14a-9
+thereunder.
+   4. The Commission’s complaint alle ges, among other things, that Goldner
+directed an improper practice in the administration of Symbol’s executive stock option program.
+The complaint alleges that pursuant to this practice, Goldner and his staff processed and reported
+stock option exercises by certain executives in contravention of the terms of Symbol’s executive
+stock option plans as disclosed in public filings with the Commission.  The complaint alleges that
+for stock option exercises done under this practice, a date was attributed to the exercise that was
+ 3
+more advantageous to the executive than the true exercise date as defined in Symbol’s executive
+stock option plans.
+IV.
+ In view of the foregoing, the Commission deems it appropriate and in the public interest to
+impose the sanctions agreed to in Respondent’s Offer.
+ Accordingly, it is hereby ORDERED, effectiv e immediately, that Respondent is suspended
+from appearing or practicing before the Commission as an attorney.
+ 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-2384.pdf ADDED Viewed

Binary file (75.3 kB). View file

raw/aaer/2006/AAER-2384.txt ADDED Viewed

	@@ -0,0 +1,425 @@

+UNITED STATES OF AMERICA
+Before the
+SECURITIES AND EXCHANGE COMMISSION
+SECURITIES ACT OF 1933
+Release No.  8664 / February 27, 2006
+SECURITIES EXCHANGE ACT OF 1934
+Release No.  53379 / February 27, 2006
+ACCOUNTING AND AUDITING ENFORCEMENT
+Release No.  2384 / February 27, 2006
+ADMINISTRATIVE PROCEEDING
+File No.   3-12219
+In the Matter of : ORDER INSTITUTING PROCEEDINGS
+ : PURSUANT TO SECTION 8A OF THE
+Helen Haiwen He, : SECURITI ES ACT OF 1933 AND SECTION
+ : 21C OF THE SECU RITIES EXCHANGE ACT
+ : OF 1934, MAKING FINDINGS AND
+Respondent. : IMPOSING A CEASE-AND-DESIST ORDER
+______________________________:
+I.
+The Securities and Exchange Commission (“Commission”) deems it appropriate
+that public administrative proceedings be, and hereby are, instituted pursuant to Section
+8A of the Securities Act of 1933 (“Securities Act”) and Section 21C of the Securities
+Exchange Act of 1934 (“Exchange Act”) against Helen Haiwen He (“Helen He” 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 Respondent admits,
+Respondent consents to the issuance of this Order Instituting Proceedings Pursuant to
+Section 8A of the Securities Act of 1933 and Section 21C of the Securities Exchange Act
+of 1934, Making Findings and Imposing a Cease-and-Desist Order (“Order”), as set forth
+below.
+III.
+ On the basis of this Order and Respondent’s Offer, the Commission finds1 that:
+A. Respondent
+Helen Haiwen He, age 37, is a citizen of China with the right of permanent
+residency in the United States.  Helen He, a Chartered Financial Analyst, was Chief
+Financial Officer of NetEase.com, Inc. (“NetEase” or the “Company”) and head of its
+Finance Department from August 1999 until December 31, 2000, and a Director from
+August 1999 to August 2001.
+B. Other Relevant Parties
+NetEase.com, Inc. is a Cayman Islands corporation established in July 1999 to
+conduct an Internet business in China.  In June 2000, NetEase raised $65 million in an
+initial public offering in the United States.  NetEase offers a wide range of Internet
+services to Chinese customers including news, email, instant messaging, chat rooms and
+online auctions.  During the relevant time, NetEase had approximately 250 employees
+and operated through offices in Beijing, Shanghai and Guangzhou, China.  NetEase’s
+American Depositary Shares (“ADS”) are registered with the Commission pursuant to
+Section 12(g) of the Exchange Act and trade on the Nasdaq Stock Market under the ticker
+symbol NTES.
+C. Facts
+1. Summary
+During 2000 and 2001, NetEase employees circumvented the Company’s internal
+accounting controls and falsified the Company’s books and records in connection with
+hundreds of advertising and e-commerce contracts.  NetEase then recorded revenue from
+the transactions in a manner that did not conform with U.S. Generally Accepted
+Accounting Principles (“GAAP”).  As a result, NetEase materially overstated its revenue
+and made numerous false and misleading statements about its financial condition in
+annual and periodic reports filed with the Commission and in other public statements,
+including earnings releases.2
+During 2000, Helen He contributed to NetEase’s recognition of revenue for two
+barter arrangements that lacked economic substance.  The arrangements called for
+NetEase to perform advertising or e-commerce services for customers, and for the
+customers to provide an offsetting amount of products and services to NetEase.
+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.
+2  The Commission filed a related case against NetEase in Federal District Court on
+February 27, 2006.
+ 2
+However, none of the parties ever performed the services.  Nevertheless, without
+engaging in sufficient due diligence, Helen He allowed the company to record revenue in
+connection with these arrangements in NetEase’s books and records.  The revenue helped
+NetEase “close-the-gap” between its actual results and analysts’ expectations.
+As a result, NetEase materially overstated its revenue in financial statements
+furnished to the Commission, three of which Helen He signed.  By engaging in this
+conduct, Helen He violated Sections 17(a)(2) and 17(a)(3) of the Securities Act and Rules
+13b2-1 and 13b2-2 under the Exchange Act, and was a cause of NetEase’s violations of
+Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Rules 12b-20 and
+13a-16 thereunder.
+  2. Background
+In April 2001, a potential purchaser of NetEase identified and questioned a large
+amount of past due accounts receivable balances.  As a result, NetEase’s audit committee
+conducted an internal investigation, which found that the Company’s management had
+directed employees to circumvent internal controls on a widespread basis causing the
+Company to materially overstate revenue.  Specifically, NetEase materially inflated
+revenue by $4.3 million, or 109%, and understated net loss by 16% for the fiscal year
+ended December 31, 2000.  NetEase also overstated revenue by approximately 5%, 36%,
+138%, 290% and 116% for the fiscal quarters ended March 31, June 30, September 30,
+and December 31, 2000, and March 31, 2001, respectively and understated net loss by
+6%, 20% and 23% for the final three quarters of year 2000.  Due to its improper
+accounting, NetEase restated previously reported fiscal year 2000 financial results and
+corrected, before public dissemination, its financial results for the quarter ended March
+31, 2001.
+3. Relevant GAAP
+GAAP permits revenue recognition when, among other things, the seller has
+provided the product or service to the customer.  Statement of Financial Accounting
+Concepts No. 5, “Recognition and Measurement in Financial Statements of Business
+Enterprises.”  When a company renders services over time, revenue generally is
+recognized on a straight line basis over the service period.  Staff Accounting Bulletin:
+No. 101, “Revenue Recognition in Financial Statements.”  For barter transactions, a
+company is required to record revenue based on the fair values of the assets or services
+exchanged by the parties.  Accounting Principles Board Opinion No. 29, “Accounting for
+Nonmonetary Transactions”; Emerging Issues Task Force Issue No. 99-17, “Accounting
+for Advertising Barter Transactions.”  Finally, GAAP requires that companies account
+for a transaction in accordance with its substance, rather than its form.  Statement of
+Financial Accounting Concepts No. 2, “Qualitative Characteristics of Accounting
+Information.”
+As is discussed below, NetEase improperly accounted for hundreds of advertising
+and e-commerce transactions during 2000 and 2001.  For some arrangements, NetEase’s
+ 3
+accounting did not conform with GAAP because the Company recognized revenue when
+it had not rendered any services to the customer.  In other instances, NetEase improperly
+accelerated revenue recognition by recording revenue over an artificially shortened
+service period.  Finally, NetEase improperly recognized revenue in connection with
+barter arrangements lacking economic substance in that neither party provided any
+products or services to the other or because the Company had no evidence establishing
+that anything of value had been provided.
+4. Circumvention of Internal Controls
+NetEase established a system of internal accounting controls in 2000 that
+segregated revenue recognition controls among three departments – Sales, Contracts and
+Finance.  The Sales Department was responsible for negotiating contracts.  The Contracts
+Department was responsible for signing contracts, arranging for advertising placements,
+and completing documents evidencing that the advertisements were shown on NetEase’s
+website.  The Finance Department, the only department that reported to Helen He, was
+responsible for affixing NetEase’s corporate seal on the contracts and for preparing
+revenue recognition journal entries.  However, this system did not provide reasonable
+assurances that services actually were performed before recognizing revenue.  NetEase
+also failed to maintain its internal controls by verifying whether NetEase employees were
+complying with them.
+In 2000 and 2001, NetEase’s employees in these departments circumvented the
+Company’s internal controls in order to materially inflate reported revenue.  NetEase’s
+improper revenue recognition can be classified into the following three categories, even
+though some transactions may involve more than one category:
+a. Recording approximately $2 million in revenue in connection with barter
+arrangements lacking economic substance;
+b. Shifting approximately $1.1 million in revenue into earlier quarters by
+artificially bifurcating advertising arrangements with customers into two
+contracts and improperly recognizing revenue over a shortened time.
+NetEase employees referred to this technique as “revenue-brought-
+forward”; and
+c. Recording approximately $1.2 million in fictitious revenue in situations in
+which NetEase had not performed the required advertising or e-commerce
+services.
+For all three categories, NetEase’s Contracts Department, which was responsible
+for arranging provision of the services, prepared reports falsely showing that NetEase had
+performed the advertising.  The Finance Department, which placed the Company’s seal
+on the contracts, prepared revenue recognition journal entries using the Contract
+Department’s false performance records.  Finally, the Sales Department artificially
+bifurcated sales arrangements into two contracts in order to accelerate revenue into earlier
+quarters.  For example, a contract having a six-month term was divided into two
+ 4
+agreements, one having a three-month term and another “bonus contract” for which
+NetEase provided “free” services for three additional months.  Contrary to GAAP,
+NetEase recognized revenue over the shortened three-month period instead of the true
+term of six months.  To identify which contracts to conceal from its independent auditor,
+employees marked the initial contracts with the prefix “G” and the bonus contracts with
+the prefix “Z.”
+5. Joyo.com/Kingsoft Barter Arrangement
+During the third quarter of 2000, NetEase recognized $330,000 in revenue from
+two contracts with Joyo.com.  Under these contracts, NetEase purportedly agreed to host
+an online shopping mall for Joyo.  The same quarter, NetEase also purportedly purchased
+dictation software worth in excess of $330,000 from Kingsoft, one of China’s largest PC
+software vendors and a related party to Joyo.  In fact, NetEase did not provide any
+services to Joyo and Kingsoft did not provide any software to NetEase.  In its
+restatement, NetEase reversed the Joyo revenue because it was part of a three-way barter
+arrangement that lacked economic substance.
+   In October 2000, a NetEase employee informed Helen He about two Joyo
+contracts, dated July 10, 2000 and August 15, 2000, that had not been recorded in
+NetEase’s books.  The employee did not provide Helen He with an explanation as to why
+the revenue from these contracts had not already been recorded in the third quarter.
+Nonetheless, without doing any due diligence as to whether the contract dates had been
+backdated or whether the contracts represented legitimate third quarter sales, Helen He
+approved NetEase’s revenue recognition as of September 30, 2000.  The Joyo revenue
+made up approximately 33% of the revenue shortfall that NetEase had identified only two
+weeks before the end of the third quarter of 2000.  Helen He also represented to the
+company’s independent auditor that the Joyo contracts were for legitimate third quarter
+sales.  In fact, the contracts had been backdated and were not signed until October 2000,
+after the third quarter had ended.  By her actions, Helen He facilitated NetEase’s
+improper recognition of the Joyo revenue.
+Revenue recognition in the third quarter of 2000 was improper because the
+contracts were not executed until the fourth quarter of 2000 and because they were part of
+a barter arrangement lacking economic substance.  Helen He failed to follow-up on red
+flags associated with the Joyo contracts at a time when she knew that NetEase was under
+pressure to close the gap between actual results and expectations, and she knew or should
+have known that NetEase’s recognition of revenue in connection with them was
+improper.
+6. Techpacific.com
+In the fourth quarter of 2000, Helen He signed an advertising contract with
+Techpacific.com, a key NetEase shareholder from prior to NetEase’s initial public
+offering in the United States.  The contract, which was negotiated by a member of the
+Sales Department, called for Techpacific to pay $50,000 to sponsor NetEase’s electronic
+ 5
+holiday card site.  The agreement was modified by a supplementary contract signed by
+another NetEase employee that included an improper “revenue-brought-forward”
+element, about which Helen He should have known, requiring NetEase to provide free
+advertising services after December 31, 2000.  The revenue from this contract helped
+NetEase close the gap on its revenue shortfall for the fourth quarter of 2000.  Helen He
+also negotiated and signed another contract with Techpacific, dated January 2001, calling
+for NetEase to pay Techpacific $50,000 for financial advisory services, purportedly in
+connection with merger discussions between NetEase and various third parties.
+ In connection with the year-end audit of NetEase for 2000, Helen He was aware
+that NetEase’s independent auditor would audit the $50,000 in revenue recognized from
+the advertising contract with Techpacific.  She did not inform the independent auditor
+that she had also executed a $50,000 financial advisory agreement, so that the auditor
+could consider that fact in making a judgment about whether NetEase’s revenue
+recognition on the advertising contract was appropriate.  In fact, NetEase did not provide
+any advertising services under the first contract and Techpacific did not provide any
+genuine financial advisory work under the second contract.  As a result, in its
+restatement, NetEase reversed the $50,000 of revenue recorded in December 2000
+because it was part of a barter arrangement that lacked economic substance.
+As CFO, Helen He ultimately was responsible for revenue recognition decisions
+for the fourth quarter of 2000.  In that capacity, she permitted NetEase to recognize
+revenue despite the fact that she had executed contracts for offsetting amounts and for
+which she did insufficient due diligence to determine whether either party had performed.
+As a result, Helen He knew or should have known that the contracts lacked economic
+substance and that NetEase’s accounting was improper.
+7. False Financial Results
+Based on her actions and inactions discussed above, Helen He contributed to
+NetEase’s public dissemination of materially false and misleading financial results for the
+quarters ended March 31, June 30 and September 30, 2000, and the quarter and year
+ended December 31, 2000, as follows:
+a. First Quarter Ended March 31, 2000 – NetEase’s registration statement for
+its June 30, 2000 IPO, which was filed with the Commission on June 29,
+2000, included financial statements for the quarter ended March 31, 2000,
+which overstated quarterly revenue by approximately 5%.  Helen He
+signed this registration statement.
+b. Second Quarter Ended June 30, 2000 – NetEase’s earnings press release
+issued on July 31, 2000, and Form 6-K furnished to the Commission on or
+about August 3, 2000, overstated second quarter revenue by
+approximately 36% and understated net loss by 6%.  The earnings release
+also falsely claimed 103% revenue growth over the previous quarter.  The
+restated results reflect 56% growth.  Helen He signed this Form 6-K,
+which contained the false press release.
+ 6
+c. Third Quarter Ended September 30, 2000 – NetEase’s earnings press
+release issued on October 31, 2000, and Form 6-K furnished the same day,
+overstated quarterly revenue by approximately 138% and understated net
+loss by 20%.  The press release falsely claimed revenue growth of 47%
+over the previous quarter and a 539% increase over the same quarter in the
+prior year.  The restated results reflect a 16% decline in revenue from the
+previous quarter and a 169% increase from the prior year’s quarter.  Helen
+He signed this Form 6-K, which contained the false press release.
+d. Fourth Quarter Ended December 31, 2000 – NetEase’s earnings press
+release for the quarter and year ended December 31, 2000 (issued on
+March 1, 2001), and Form 6-K furnished to the Commission the same day,
+overstated quarterly revenue by approximately 290% and annual revenue
+by 109% and understated net loss by 23% for the quarter and 16% for the
+year.  The earnings release claimed fourth quarter revenue growth of 25%
+over the previous quarter and a 159% increase over the same quarter in the
+prior year.  The release also claimed that full year 2000 revenue increased
+311% over the prior year.  The restated fourth quarter results reflect a 24%
+drop from the previous quarter, a 34% drop from the prior year’s quarter,
+and the restated full year results reflect a 97% increase from the prior year.
+NetEase falsely attributed increases in its advertising revenue to a
+continued increase in the number of advertisers as well the size of their
+purchases.
+e. Year Ended December 31, 2000 – NetEase’s glossy annual report for
+fiscal 2000, which was disseminated to investors with the Company’s
+proxy materials on or about April 1, 2001, overstated full year revenue by
+$4.3 million, or 109% ($4.0 million versus $8.3 million), understated its
+net loss by $3.2 million, or 16% (-$20.5 million versus -$17.3 million) and
+understated its ADS loss per share by $.13, or 16% (-$.82 versus -$.69).
+The glossy annual report falsely represented that NetEase’s annual
+advertising revenue grew by 456% ($1.3 million to $7.3 million). The
+Company’s annual report on Form 20-F for fiscal 2000, which was filed
+with the Commission on August 31, 2001, included corrected financial
+results (based upon the August 2001 restatement).
+After she no longer was the Company’s CFO, but at a time when she remained a
+director, Helen He was asked to sign, and did sign, along with NetEase’s then-CFO,
+NetEase’s management representation letter to its independent auditor dated February 14,
+2001.  In the letter, Helen He stated, among other things, that NetEase’s financial
+statements were “fairly presented” in conformance with GAAP, that the Company and its
+executives, including Respondent, had given the auditor “all financial records and related
+data,” and that all material transactions had been properly recorded in the Company’s
+accounting records.  These statements were materially false or misleading.  Based in part
+on this letter, NetEase’s auditor issued an audit report containing an unqualified opinion
+ 7
+for fiscal 2000, which was included in the Company’s annual report disseminated to
+investors along with proxy materials.
+IV.
+LEGAL DISCUSSION
+A. Violations of Sections 17(a)(2) and 17(a)(3) of the Securities Act
+Section 17(a) of the Securities Act proscribes a variety of fraudulent practices in
+the offer or sale of securities.  Section 17(a)(2) of the Securities 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) of the
+Securities Act 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.  To prove a violation of these provisions, it must be shown that the alleged
+misrepresentations or omitted facts were material.  Information is deemed material upon
+a showing that there is a substantial likelihood that the omitted facts would have assumed
+significance in the investment deliberations of a reasonable investor.  Basic, Inc. v.
+Levinson, 485 U.S. 224 (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).
+During 2000, Helen He contributed to NetEase’s improper recording of revenue
+in connection with offsetting barter arrangements that lacked economic substance.  These
+barter arrangements contributed to the Company’s material overstatement of its revenue
+in its registration statement, which NetEase distributed to investors and furnished to the
+Commission.  As a result, Helen He violated Sections 17(a)(2) and (3).
+B. Causing NetEase’s Violations of the Reporting and Recordkeeping
+Provisions of the Exchange Act
+Section 13(a) of the Exchange Act and Rule 13a-16 thereunder generally require
+foreign private issuers with securities registered under Section 12 of the Exchange Act to
+file certain reports on Form 6-K with the Commission, and the obligation to file such
+reports includes the requirement that they be true and correct.  Exchange Act Rule 12b-20
+provides that in addition to the information expressly required to be included in a
+statement or report, there shall be added such further material information, if any, as may
+be necessary to make the required statements, in the light of the circumstances under
+which they were made, not 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).
+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 their transactions
+and dispositions of their assets.  Section 13(b)(2)(B) of the Exchange Act requires issuers
+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
+ 8
+permit preparation of financial statements in conformity with GAAP and to maintain the
+accountability of assets.
+No showing of scienter is required to prove violations of Sections 13(a),
+13(b)(2)(A) and 13(b)(2)(B).  See, e.g., SEC v. Savoy Indus., Inc., 587 F.2d 1149, 1165
+(D.C. Cir. 1978), cert. denied, 440 U.S. 913 (1979); SEC v. World-Wide Coin
+Investments, Ltd., 567 F. Supp. 747, 749-50 (N.D. Ga. 1983).
+As discussed above, Helen He’s conduct contributed to NetEase’s improper
+recording of revenue from two barter arrangements that lacked economic substance.  The
+Company’s books and records did not accurately and fairly reflect the terms of the two
+arrangements, causing the Company to materially overstate its revenue.  As a result,
+Helen He was a cause of NetEase’s violations of the reporting, recordkeeping and
+internal controls provisions of the Exchange Act.
+ C. Violations of Exchange Act Rules 13b2-1 and 13b2-2
+ 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).  Rule 13b2-2 of the Exchange Act prohibits directors and officers
+from, directly or indirectly, making or causing materially false or misleading statements
+to an accountant in connection with an audit or the preparation of Commission filings.
+As detailed above, Helen He was a cause of NetEase’s improper recognition of revenue
+from the Joyo and Techpacific barter arrangements, which lacked economic substance.
+Helen He did not adequately inquire into and fully disclose the nature of the
+arrangements to NetEase’s independent auditor and also, at the independent auditor’s
+request, signed an inaccurate management representation letter to the auditor, which it
+relied on in issuing an audit report containing an unqualified opinion for NetEase’s fiscal
+2000 financial statements.  As a result, NetEase’s books, records and financial statements
+were false and misleading and Helen He violated Rules 13b2-1 and 13b2-2 of the
+Exchange Act.
+V.
+Based on the foregoing, the Commission finds that Helen He violated Sections
+17(a)(2) and 17(a)(3) of the Securities Act and Rules 13b2-1 and 13b2-2 under the
+Exchange Act, and was a cause of NetEase.com, Inc.’s violations of Sections 13(a),
+13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Rules 12b-20 and 13a-16
+thereunder.
+ 9
+VI.
+Accordingly, IT IS HEREBY ORDERED, pursuant to Section 8A of the
+Securities Act and Section 21C of the Exchange Act, that Helen He cease and desist from
+committing or causing any violations and any future violations of Sections 17(a)(2) and
+17(a)(3) of the Securities Act and Rules 13b2-1 and 13b2-2 under the Exchange 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-16 thereunder.
+By the Commission.
+       N ancy M. Morris
+       S ecretary
+ 10

raw/aaer/2006/AAER-2385.txt ADDED Viewed

	@@ -0,0 +1,282 @@

+ UNITED STATES OF AMERICA
+ Before the
+ SECURITIES AND EXCHANGE COMMISSION
+SECURITIES EXCHANGE ACT OF 1934
+Release No.   53380 / February 27, 2006
+ACCOUNTING AND AUDITING ENFORCEMENT
+Release No.  2385 / February 27, 2006
+ADMINISTRATIVE PROCEEDING
+File No.   3-12220
+In the Matter of
+GREGORY G. NELSON, 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 Gregory G. Nelson, CPA
+(“Respondent” or “Nelson”) 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
+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.
+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.
+ 2
+III.
+ On the basis of this Order and Res pondent’s Offer, the Commission finds2 that:
+A. RESPONDENT
+Gregory G. Nelson, a certified public accountant in Michigan from 1973 until his licensed expired
+on December 31, 2003, was a partner in the Detroit office of PricewaterhouseCoopers LLP
+(“PwC”).  He is currently retired.  From 1997 to June 2002, the date of his retirement from PwC,
+Nelson was the engagement partner on PwC’s audits of Sun Communities, Inc.
+B.  ISSUERS
+Sun Communities, Inc. (“Sun”) is a self-administered and self-managed real estate investment
+trust.  Sun, as the general partner of Sun Communities Operating Limited Partnership (“SCOLP”),
+owns, operates, develops and finances manufactured housing communities concentrated in the
+Midwestern and Southeastern United States.  Sun went public in 1993 and is listed on the New
+York Stock Exchange.  In 1999, a subsidiary of SCOLP (Sun/Forest, LLC) formed a joint venture
+with MHCDC, LLC, a subsidiary of Champion Enterprises (“Champion”); the joint venture was
+called SunChamp, LLC (“SunChamp”).
+Sun Communities Operating Limited Partnership is the main operating subsidiary through
+which Sun owns, operates, develops and finances manufactured housing communities concentrated
+in the Midwestern and Southeastern United States.  SCOLP was a separate filer with the
+Commission until May 2004.  Sun consolidated SCOLP’s financial statements within its own
+financial statements during the time at issue in this proceeding.
+C. SUN’S FALSE FINANCIAL STATEMENTS
+Sun’s financial statements for the years ended December 31, 2000 and 2001 and the quarter
+ended March 31, 2002 were materially inaccurate and were not in accordance with Generally
+Accepted Accounting Principles (“GAAP”) because Sun failed to properly account for its interest
+in SunChamp.
+1. Sun Failed to Account Properly for its Investment in SunChamp
+ Beginning in 1999, SunChamp was formed to purchase land for development and to
+develop manufactured housing communities.  Pursuant to the terms of the agreement, Sun had and
+retains significant rights as to SunChamp, which resulted in Sun having the ability to exercise
+significant influence over SunChamp.
+ Beginning in the third quarter of 2000, SC OLP transferred portions of its SunChamp
+ownership to outside investors in an attempt to reduce its ownership below 20% and thereby avoid
+2   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
+recording SunChamp losses in its financial statements.  The consideration received from the
+outside investors consisted of cash in excess of $7 million and, in most instances, non-recourse
+notes totaling $6 million.  After recognizing the transfers of SunChamp ownership to the outside
+investors, Sun determined that it owned less than 20% of SunChamp and did not record any of
+SunChamp��s operating losses during Q3 2000, Q4 2000 and 2001.  As Nelson informed Sun at the
+time, this determination was not supported by GAAP.
+ The outside investor transactions were stru ctured in such a way that the full risks and
+rewards of ownership did not transfer to the investors.  Therefore, the transactions did not
+constitute “sales” under GAAP.  Although Sun maintained significant influence over SunChamp,
+Sun failed to apply equity method accounting during 2000 and 2001.   Proper application of equity
+method accounting required that Sun record its allocable share of SunChamp’s losses.  Sun’s
+incorrect determination to not record its share of SunChamp’s losses led Sun to materially
+overstate its income in 2000 and 2001.  In 2002, Sun made additional capital contributions to
+SunChamp that Sun believed increased its ownership to greater than 20% of SunChamp.
+Beginning in Q1 2002 Sun applied equity method accounting for its interest in SunChamp.  During
+that quarter, however, Sun continued to improperly account for the SunChamp investment by,
+among other things, failing to recognize its entire share of the SunChamp losses as required under
+GAAP.
+During PwC’s 2000 and 2001 audits, Nelson correctly concluded that Sun’s accounting
+for SunChamp did not comply with GAAP and thus proposed that Sun record adjusting entries to
+account for Sun’s share of the SunChamp losses under the equity method of accounting.  After
+management refused to make the adjustments, Nelson incorrectly concluded that the adjustments
+were immaterial to Sun’s financial statements.  Nelson failed to review and objectively evaluate
+the documents underlying the engagement team’s materiality analysis.  Specifically, he failed to
+review the outside investor transactions to determine whether Sun transferred the risks and
+rewards of ownership in SunChamp.  The documents for these transactions were provided to the
+PwC engagement team.  Because of Nelson’s lack of review and objective evaluation of the
+documents, he did not see that: (1) the transfers were funded, in part, by non-recourse notes that
+did not require principal or interest payments to be made, (2) the operating agreement contained
+a put option, and (3) the agreements contained a prohibition against pledging or selling the
+alleged interest and did not contain a requirement that the outside investors fund additional
+capital contributions.  The terms of these notes preclude accounting for these transactions as
+sales under Statement of Financial Accounting Standards No. 66.  Thus, the engagement team’s
+materiality analysis -- which was based on the conclusion that the transactions with the outside
+investors were sales – was invalidated.  Instead, Nelson substantially relied on oral
+representations from Sun's Chief Financial Officer (“CFO”) describing the SunChamp
+transactions and Nelson failed to apply the auditing procedures necessary to provide a reasonable
+basis for an opinion.
+ 4
+2.  Sun Also Failed to Comply with Other GAAP During Nelson’s Tenure as Engagement
+Partner.
+ a.   Accounting for Transactions  with Retroactive Effective Dates
+During 2000 and 2001, Sun accounted for transactions with three outside investors
+retroactively, using effective dates reflecting the dates on which oral purchase and sales
+agreements supposedly occurred.  The effective dates were months before the agreements were
+finalized, the papers were signed, or money changed hands.  Sun considered the transactions
+effective at the time of the supposed oral agreements, despite having neither a contemporaneous
+written record of the transactions, nor a down payment.  Accounting for these transactions before
+they were finalized had the effect of reducing Sun’s perceived ownership percentage in SunChamp
+prematurely in several quarters.  Sun thereby reduced its perceived ownership below 20% and
+consequently believed that it could avoid equity method accounting and was not required to record
+any SunChamp losses in those quarters.
+ Nelson accepted the representations of the CF O as to the closing dates on the agreements
+with outside investors and never inspected the underlying documents.  He failed to properly review
+the agreements and to corroborate the representations of the CFO, which would have resulted in
+the discovery that the agreements were not completed as of the time they were made effective in
+Sun’s financial statements.
+b.  90-Day Lag
+ During 2000 and the first qua rter of 2002, Sun delayed recording SunChamp’s losses for
+90 days.  Sun justified its use of a 90-day lag on the grounds that Sun did not timely receive
+SunChamp’s financial statements from a Champion subsidiary that maintained the SunChamp
+accounting records.  However, contrary to Sun’s assertions, Sun could have timely recorded the
+SunChamp losses without any lag, as evidenced by the fact that Champion, using the same
+SunChamp financial statement results, timely reported its share of SunChamp’s results.
+Nelson told Sun that the SEC was generally opposed to reporting on a lag because of its
+interest in real time reporting.  Nonetheless, Nelson relied exclusively on representations from
+Sun's management, and failed to take additional steps to obtain competent evidential matter to
+determine whether Sun’s application of a 90-day lag was factually justified and supportable
+under GAAP.  In fact, Sun’s application of a 90-day lag was not supportable under GAAP.
+Corroboration by Nelson of management’s assertion would have revealed that Sun received the
+SunChamp financial statements sufficiently early to timely report SunChamp’s results without
+any lag.
+ 5
+D. IMPROPER PROF ESSIONAL CONDUCT
+In connection with PwC’s audits of Sun’s 2000 and 2001 year end financial statements and
+a review of Sun’s Q1 2002 financial statements, Nelson failed to meet several professional
+standards outlined in the Codification of Statements on Auditing Standards (“AU”).  Nelson failed
+to exercise due professional care in performing the Sun audits and preparing the audit reports as
+required by AU § 150.02.  Nelson also failed to obtain sufficient competent evidential matter
+through inspection, observation, inquiries, and confirmations to afford a reasonable basis for an
+audit opinion regarding the financial statements under audit.  AU § 150.02.
+Representations from management are part of the evidential matter the independent auditor
+obtains, but they are not a substitute for the application of those auditing procedures necessary to
+afford a reasonable basis for an opinion regarding the financial statements under audit.  AU §
+333.02.  Nelson accepted the uncorroborated representations of Sun’s CFO as to the structure of
+the SunChamp transactions with outside investors and the effective dates on those transactions, and
+failed to review the underlying documents.  Had Nelson properly reviewed the transactions and
+appropriately corroborated their supposed effective dates, he would have discovered that: 1) the
+structure of the transactions precluded the transfer of the full risks and rewards of ownership, 2) the
+transactions were not completed as of the time they were recorded by Sun, and 3) the engagement
+team’s materiality analyses were invalid.  Nelson also relied exclusively on statements from Sun's
+management to determine whether Sun’s application of a 90-day lag was factually justified and
+supportable under GAAP.  Nelson failed to adequately corroborate management’s
+representations and consequently failed to discover that Sun did not have a supportable basis on
+which to report SunChamp’s losses on a lag.
+In conducting an audit, an auditor is required to state in the auditor’s report whether the
+financial statements are presented in conformity with GAAP and the audit was conducted in
+accordance with GAAS.  AU § 410, 411 and 508.07.  Nelson caused PwC to render unqualified
+audit reports on the 2000 and 2001 financial statements included in Sun's annual reports on Form
+10-K for fiscal years 2000 and 2001.  As described in this Order, however, PwC’s audits of
+Sun’s 2000 and 2001 year-end financial statements and review of Sun’s financial statements for
+the first quarter of 2002 were not conducted in accordance with GAAS, and the financial
+statements were not prepared in conformity with GAAP.
+E. FINDINGS
+Based on the foregoing, the Commission finds that, in connection with the 2000 and 2001
+audits and the 2002 review of financial statements of Sun, Nelson engaged in improper
+professional conduct (as defined by Rule 102(e)(1)(iv)(B)(2) of the Commission’s Rules of
+Practice) 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 Nelson’s Offer.
+ 6
+ Accordingly, it is hereby ORDERED, effective immediately, that:
+ A. Nelson is denied the privilege of appe aring or practicing before the Commission as
+an accountant.
+ B. After two years from th e 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/her 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.
+C. The Commission will consider an app lication 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
+ 7
+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-2388.pdf ADDED Viewed

Binary file (36.2 kB). View file

raw/aaer/2006/AAER-2389.pdf ADDED Viewed

Binary file (39.7 kB). View file

raw/aaer/2006/AAER-2390.pdf ADDED Viewed

Binary file (45.1 kB). View file

raw/aaer/2006/AAER-2390.txt ADDED Viewed

	@@ -0,0 +1,160 @@

+ UNITED STATES OF AMERICA
+Before The
+SECURITIES AND EXCHANGE COMMISSION
+SECURITIES EXCHANGE ACT OF 1934
+Release No.  53392 / March 1, 2006
+ACCOUNTING AND AUDITING ENFORCEMENT
+Release No.  2390 / March 1, 2006
+ADMINISTRATIVE PROCEEDING
+File No.   3-12226
+In the Matter of
+Ronald A. Safran, CPA,
+Respondent.
+:
+:
+:
+:
+:
+:
+:
+:
+ORDER INSTITUTING PUBLIC
+ADMINISTRATIVE PROCEEDINGS, MAKING
+FINDINGS AND IMPOSING REMEDIAL
+SANCTIONS PURSUANT TO RULE 102(e)
+OF THE COMMISSION'S RULES OF PRACTICE
+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 Respondent
+Ronald A. Safran, CPA ("Safran" or "Respondent") pursuant to Rule 102(e)(3)(i) of the
+Commission's Rules of Practice.1
+II.
+In anticipation of the institution of these proceedings, Safran has submitted an Offer of Settlement
+("Offer"), which the Commission has determined to accept.  Solely for the purpose of these
+proceedings and any other proceeding brought by or on behalf of the Commission or to which the
+Commission is a party, and without admitting or denying the findings, except as to the
+Commission's jurisdiction over the subject matter of these proceedings and as to the entry of the
+injunction set forth in Section III, which are admitted, Safran consents to the entry of this Order
+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.
+  1
+Instituting Public Administrative Proceedings, Making Findings and Imposing Remedial
+Sanctions Pursuant to 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 finds that:
+A. Safran, age 51, is a certified public accountant licensed in New York and was, during the relevant
+period covered by this Order, a partner at KPMG LLP (“KPMG”).  Safran was the engagement
+partner on KPMG’s audits of the Xerox Corporation (“Xerox” or the “Company”) for the years 1998
+and 1999.
+B. KPMG is a national public accounting firm and, during the relevant period covered by this Order,
+served as the independent public accountant for Xerox.
+C. Xerox is a New York corporation with its principal place of business in Stamford, Connecticut.
+At all times pertinent to the period covered by this Order, the common stock of Xerox 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. Xerox’s fiscal year ends on December 31.
+D. On January 29, 2003, the Commission filed a complaint against Safran and others in the United
+States District Court for the Southern District of New York. SEC v. KPMG LLP, et al., No. 03-0671
+(DLC).  On February 27, 2006, the Court entered a final judgment permanently enjoining Safran
+from violating Sections 17(a)(2) and (3) of the Securities Act of 1933 (“Securities Act”) and from
+aiding and abetting violations of Section 13(a) of the Exchange Act and Rules 12b-20, 13a-1 and
+13a-13 thereunder.  Safran consented to the entry of the final judgment without admitting or denying
+the allegations of the Commission's complaint.2
+E. The Commission’s complaint alleged, among other things, that Safran violated Sections 17(a)(2)
+and (3) of the Securities Act and aided and abetted violations of Section 13(a) of the Exchange Act
+and Rules 12b-20, 13a-1 and 13a-13 thereunder.  The complaint alleged that in the course of serving
+as the engagement partner for Xerox, Safran authorized the issuance of KPMG audit reports that
+accompanied the 1998 and 1999 Annual Reports on Form 10-K filed by Xerox with the SEC.  Those
+audit reports stated that KPMG conducted an audit of Xerox’s financial statement in accordance with
+Generally Accepted Audit Standards, that KPMG planned and performed the audit to obtain
+reasonable assurance that the financial statements were free of material misstatement, that KPMG
+assessed the accounting principles used and significant estimates made by Xerox management and
+that it evaluated the overall consolidated financial statement presentation.  The audit reports further
+represented that, as a result of KPMG’s audit, it was KPMG’s opinion that Xerox’s financial
+statements presented fairly, in all material respects, Xerox's financial position and results of
+2 Scienter is not required to prove violations of Sections 17(a)(2) or (3) of the Securities Act.  Aaron v.
+SEC, 446 U.S. 680, 697 (1980).  Violations of these sections may be established by showing negligence.
+SEC v. Hughes Capital Corp., 124 F.3d 449, 453-54 (3d Cir. 1997); SEC v. Steadman, 967 F.2d 636, 643
+n.5 (D.C. Cir. 1992).
+  2
+operations in conformity with Generally Accepted Accounting Principles.  The Complaint further
+alleged that each of these representations was materially false and misleading or omitted to disclose
+material information which would make the statements not false and misleading.
+IV.
+In view of the foregoing, the Commission deems it appropriate and in the public interest to accept
+Safran’s Offer of Settlement.
+ Accordingly, it is hereby ORDERED, effective immediately, that:
+            A.       Safran is suspended from appearing or practicing before the Commission as an
+accountant.
+ B. After three (3) years from  the date of this order, Safran 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 Safran’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) Safran, 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) Safran, or the registered pub lic 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 Safran’s or the firm’s quality control system that would indicate that Safran will
+not receive appropriate supervision;
+   (c) Safran has resolved all disc iplinary 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) Safran acknowledges his respons ibility, as long as Safran 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 Safran to resume appearing or
+  3
+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
+Safran’s character, integrity, professional conduct, or qualifications to appear or practice before
+the Commission.
+          By the Commission.
+                                                                       Nancy M. Morris
+                Secretary
+  4

raw/aaer/2006/AAER-2391.txt ADDED Viewed

	@@ -0,0 +1,1389 @@

+     SEC.gov | Symbol Technologies, Inc., 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\/498491","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
+              Symbol Technologies, Inc., et al.
+        Symbol Technologies, Inc., et al.
+                   CORRECTED
+ U.S. SECURITIES AND EXCHANGE COMMISSION
+ Litigation Release No. 19585 / March 2, 2006
+ Accounting and Auditing Enforcement Release No. 2391 /
+March 2, 2006
+  SEC v. Symbol Technologies, Inc., et al. , 04 CV 2267 (LDW)(EDNY)
+ Former General Counsel of Symbol Technologies, Inc. Consents to Permanent Injunctive Relief, Officer-and-Director Bar and Administrative Order Under Rule 102(E)
+ On February 7, 2006, the Honorable Leonard D. Wexler, United States District Judge for the Eastern District of New York entered a final judgment against Leonard Goldner ("Goldner"), the former General Counsel and Senior Vice President of Symbol Technologies, Inc. ("Symbol").  Goldner consented to entry of an order that prohibits him from acting as an officer or director of a public company and imposes permanent injunctive relief for violations of the relevant antifraud, corporate reporting, books and records and internal control provisions of the federal securities laws.  Specifically, Goldner, without admitting or denying the allegations in the Commission's complaint, is permanently enjoined from violating, or engaging in conduct that would make him liable for violations of, Section 17(a) of the Securities Act of 1933, Sections 10(b), 13(a), 13(b)(2), 13(b)(5), 14(a), and 16(a) of the Securities Exchange Act of 1934 ("Exchange Act"), and Exchange Act Rules 10b-5, 12b-20, 13a-1, 13a-13, 13b2-1, 14a-3, 14a-9, and 16a-3.  The Commission's claims for disgorgement and civil penalties against Goldner were withdrawn in view of Goldner's civil forfeiture payment of $2 million in connection with his guilty plea in a parallel criminal case.
+ The Commission instituted on February 27, 2006, and simultaneously settled an administrative proceeding pursuant to Rule 102(e) of the Commission's Rules of Practice against Goldner, an attorney and a member of the bar of the State of New York.  The administrative proceeding was based on the entry of the final judgment against Goldner.  Goldner consented, without admitting or denying the Commission's findings, to entry of an order suspending him from appearing or practicing before the Commission as an attorney.
+ The Commission's complaint was filed on June 3, 2004, and named Symbol, Goldner and ten other former Symbol executives as defendants.  The complaint alleges that from 1998 until early 2003, the defendants engaged in a fraudulent scheme to inflate revenue, earnings and other measures of financial performance in order to create the false appearance that Symbol had met or exceeded its financial projections.  While the accounting fraud was occurring, Goldner manipulated stock option exercise dates to enable select senior executives, including himself, to profit unfairly at the company's expense.  Rather than use the actual exercise date as defined by the company's stock option plans, Goldner instituted, without board approval or public disclosure, a practice of selecting a more advantageous exercise date chosen from a 30-day "look-back" period so as to reduce the cost of the exercise to the executive or, in some cases, to decrease the executive's tax liability.  To create the false appearance that these exercises occurred on the selected dates, Goldner had his staff backdate transactional documents and record the phony exercise dates in the forms on which the executives reported their stock acquisitions to the Commission and the public.
+ On October 27, 2004, Goldner pled guilty to criminal charges brought by the United States Attorney's Office for the Eastern District of New York ("USAO") based on the same conduct alleged in the Commission's complaint against Goldner.  In conjunction with his guilty plea, Goldner also agreed to pay $2 million to resolve a related civil forfeiture proceeding.
+ On June 3, 2004, Symbol consented to entry of a final judgment imposing, among other relief, a permanent injunction and a civil penalty in the amount of $37 million, and James Dean, a former Manager and Director of Operations Finance, consented to entry of a partial final judgment imposing permanent injunctive relief.  On February 17, 2005, Brian Burke, a former Senior Vice President, consented to entry of a partial final judgment imposing permanent injunctive relief and a bar prohibiting him from acting as an officer or director of a public company.
+ A separate complaint filed by the Commission on June 19, 2003, named Robert Korkuc, a former Chief Accounting Officer of Symbol, for his role in the fraudulent scheme.  On May 11, 2005, Korkuc consented to entry of a partial final judgment imposing permanent injunctive relief and a bar prohibiting him from acting as an officer or director of a public company.  Korkuc also settled an administrative proceeding pursuant to Rule 102(e) of the Commission's Rules of Practice by consenting, without admitting or denying the Commission's findings, to entry of an order suspending him from appearing or practicing before the Commission as an accountant.
+ The Commission acknowledges the assistance and cooperation of the USAO and the U.S. Postal Inspection Service in this matter.
+ For additional information see Litigation Release No.  19319  (August 1, 2005), Litigation Release No.  19086  (February 17, 2005), Litigation Release No.  18734  (June 3, 2004), Litigation Release No.  18194  (June 19, 2003), Litigation Release No.  18050  (March 25, 2003).
+ 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-2395.pdf ADDED Viewed

@@ -0,0 +1,587 @@
-���n���:~$�~W�m/#j����Ӯr��:ɞ챢;�Qt�S��N����$^�S+��idE���nD�r�op��� :JA+���xU:L��fJˀK#b���
 W�B��o

+%PDF-1.6
+1 0 obj
+<?xpacket begin="" id="W5M0MpCehiHzreSzNTczkc9d"?>
+<x:xmpmeta xmlns:x="adobe:ns:meta/" x:xmptk="Adobe XMP Core 4.0-c321 44.398116, Tue Aug 04 2009 14:24:39">
+   <rdf:RDF xmlns:rdf="http://www.w3.org/1999/02/22-rdf-syntax-ns#">
+      <rdf:Description rdf:about=""
+            xmlns:xap="http://ns.adobe.com/xap/1.0/">
+         <xap:CreateDate>2006-03-20T17:01:51Z</xap:CreateDate>
+         <xap:CreatorTool>POP90</xap:CreatorTool>
+         <xap:ModifyDate>2010-02-22T13:32:27-05:00</xap:ModifyDate>
+         <xap:MetadataDate>2010-02-22T13:32:27-05:00</xap:MetadataDate>
+      </rdf:Description>
+      <rdf:Description rdf:about=""
+            xmlns:pdf="http://ns.adobe.com/pdf/1.3/">
+         <pdf:Producer>Corel PDF Engine Version 9.654</pdf:Producer>
+         <pdf:Keywords>Release Nos. 34-53517, AAER-2395&#xD;&#xA;File No. 3-12242&#xD;&#xA;Date: 2006-03-20</pdf:Keywords>
+      </rdf:Description>
+      <rdf:Description rdf:about=""
+            xmlns:dc="http://purl.org/dc/elements/1.1/">
+         <dc:format>application/pdf</dc:format>
+         <dc:title>
+            <rdf:Alt>
+               <rdf:li xml:lang="x-default">Administrative Proceeding: Bruce G. Hill, Esq.</rdf:li>
+            </rdf:Alt>
+         </dc:title>
+         <dc:creator>
+            <rdf:Bag>
+               <rdf:li>US SEC</rdf:li>
+            </rdf:Bag>
+         </dc:creator>
+         <dc:description>
+            <rdf:Alt>
+               <rdf:li xml:lang="x-default">ORDER INSTITUTING PUBLIC ADMINISTRATIVE PROCEEDINGS PURSUANT TO RULE 102(e) OF THE COMMISSION’S RULES OF PRACTICE, MAKING FINDINGS, AND IMPOSING &#xD;&#xA;REMEDIAL SANCTIONS</rdf:li>
+            </rdf:Alt>
+         </dc:description>
+         <dc:subject>
+            <rdf:Bag>
+               <rdf:li>Release Nos. 34-53517</rdf:li>
+               <rdf:li>AAER-2395</rdf:li>
+               <rdf:li>File No. 3-12242</rdf:li>
+               <rdf:li>Date: 2006-03-20</rdf:li>
+            </rdf:Bag>
+         </dc:subject>
+      </rdf:Description>
+      <rdf:Description rdf:about=""
+            xmlns:xapMM="http://ns.adobe.com/xap/1.0/mm/">
+         <xapMM:DocumentID>uuid:f9781b12-8714-47cf-b3c5-f7dce825b84a</xapMM:DocumentID>
+         <xapMM:InstanceID>uuid:05c79e5d-5ca0-40b6-a508-a0f1ba3f534a</xapMM:InstanceID>
+      </rdf:Description>
+   </rdf:RDF>
+</x:xmpmeta>
+<?xpacket end="w"?>
+endstream
+H��W�n�8}7��0�8�.�,E���b�v��T`A�T�F�$���rH��,r�A���3gΌ���w��?��@�����܏~�� a�q=�^�'�º�w�_������=�%
+���\�C`w܂[�ʗ,-
+�JYZ�w{n`59�@�m�)��>�-~��Fhȓ9��U5ǋ��X�򃷺dI��ƿ�;�����тf��x��1v�X�`�[����{�8Lq���-��?��P�"�w�t5A��eYf����
+�F�|4�������&#i�����nh�Atw�Ք8{LQ�*��Լ#�����=��}I+��gxL	V�;Y�`����Jw�i�h�{��c�o���ДȀ�ʿƩ}�y�!9��<x����t�8>X�W�-�G8va
+C&RF_��%�>�|p\�z'�n=iD`�C
+�K��n[����S���>��81TD�
+��7�{�;i\Yo�%{�*2)eŊ3&�g�9�E�g�MY�KL����mf���i]w�|^&��]wī���~r=X����g�L�9�co&��,��:&�J�јp-�syش�& o׳�{����X�q4J�h�����㼓�*����XF#��_����8Y�,���)S4P�I���,����}�RC��b�b܏*l.'�>�!&����d��Ɛ�:�n�-Y5\��%Z�t�*�c�/T�`j�uZ/'���\ƾ(̂!5Υ
+[�+�_��|����KZ}f@�:Mu��I�KӸQ���?O��L`���C]+��H�%�2wXa�`�H�/7��7sQ:�a��>j��:,jlQ�����be��W��8�`�~T�|O����O��8��ϕ����b�
+endstream
+H�|��n�0����/[u�i�����&S�NM�{�6R1���}��
+�b9�Ͽ�?�8��?�C;����ۣ�E�7����֋�?�!SZ����Wۙ!�����4�n�^TU����i������ݏ��k��������	���7w#���M�?�Ώm8��W�����ax���L�:
+@�@3P�JY�HE���M	�ؤ5�[�]�GY�Hm9Aĉ���W�N�� `9��}8��:̹H��y�0/W�s�+sZlK��"�"x�f5r��T/Jr�����Vi
+�h�S�E�L�E����^����	^\"�֍L̈́?>�������e�ecG�%�FF���޳�0K�_�}�`6t�A
+endstream
+x��UT�ݶ�qHp'������nA(\wwwww
+`��q���C�F���'�be0:��AsߕT��~�)��ʻ��_b0J�%N��_�w]��*�k��!�wF�!��Y1�����}������`t�G����_�u���{ו�Kﲒ�!����l��`�kk����v's0��ٴs����r��|�������{�m[ؙ��{����?
+�+�����.�h
+��f��U�{^	�m�>�HZ��Ct�i�vfW�?V�Z�X��Y������6}O�
+"k��5͍�4z�,�Gl���?V+'wY?"٬�Q��� 6LQ׃	n��)��.;I���։ .��d��Tҿ&�.,�)�}�z��8�:�N-�2�!��Q?��$� a���?�&Τ�"}||ˢ��jV��S���������C������v���u��0��V`�9b'�,��|L��P�.6ê��}���H�M5La�EH)\��o.I��7r�����zs�r�r!��V�������^k����D!e��7,���u ����1q��^���u.�K1�`B�w��*�8��715���è��Sf�<n�h�W���
+,�D��?N[T�w��h��1����w�.�W'���$���PB�=vfJּk�)���� �s�B[w�W$v�a�ФZ�H��3�ҭ�C�#���,� ��M�a9�X��Èz��!@s��j�4隷�3vHT�s���0m-�L�a1�����5��JT8d9��l~���	:��P;�����_ɮ�)|�XR٘[iR8�\Q[@O���
+���AyCm��\�ú��#`�y[`T�W�&el���]U�`QJ�h�O�A���c4�k���-�X�r�t|��Gœ~b(�!��|�Q�6�A9Rd>������� �ϯ,��s��Ɵ1,��_���T(�Y0�a�:ۏ'�M�`�{�$D(5��pA�f��_cW�'��%͹�Z��#�c�}��i��NA�0�P{26�"���'�d�<o�z�rՏ$�%�8�֥�>kUwK���5ܾ0���k�g�k�7��'��g�����/sL^�(�SW�T���Z�-N7Tᘕ��%�N�	,~�T
+�6<�AM��#1�0U|2�Q��v,��}��c:��G#bR��G�ё߂P�HM�=��V]<�E-��a}��p��e=N9k��Vm��Mp��0�GW�E�2�6Od��AM[�`z�-IJj�v����J��v;Y�%P�aP����Z[�>$d6��Z0qV4�o
+����_�b�� jr�=�ǘi��zDU�+�K|8��	L#�)�a�@���
+�5��5|FTnS
+�K�xF7<}�):<[XӞ������d������ܴ��Lu�؎�O�%�7�H���X>
+�a
+��\z�&�viDĈ��t��t��3����xj�t�;t)�U��R�s}���r+�ףж6Hߎ	߮��O7L���ƿ"irP`�c��{����X�ҟ|��c'�^����|K*�V����d�:~/��%G���(&³��y�*�1�5������s "�mw�zt�K(�����W�Y��9��r����ٷ_��L!���.L�����Y$�H��tND@��KA�o��(�W�׶�z4�ݴ٧!ʺ�e�GA�>�m��ِI��>�مf�R����&]�a�#�.�S"|�!~�����,�_p���y�m��3ax'���Rg���g�?JA�؆=)|}�V���U2���	:<`sgt(�z�;L���C��?��z�8}��H
+V�5�ۨ
+�kk���~6d����z�(�{���� *�Z�R>�;jO����TD+�v�h��s)U�sp �c6�a*��g765z�{4,q^�a`��<���j�֨NP	MG9����G��E�
+��ާ�2�.%b��k���%�ז�?�`�FBh�"��δ�NŦ-A2^:vG��>�7�1~5�����Z�,R�L�X�}(����a
+G�_@�"g;n.�����r�rmڛ��)�E�gB}p쥵�p�5ץ�chsG�$M*}��
+dJ^���5^��i��t`ڐ����yf���)��]��
+,'�bQ
+�F�}&�.1X�w�Q���zk�u��q�Lxf�G�=�O<��ҵ�WT��u����uS���b\4�=�z�GCR�R��4��j4�t�CM@�M?
+�|U��m���u���������Ё���ŵr�nL�Zd{PK��wL��"���*�%
+�[0D��#�>��J�l�"ϣ�� �.��ӊ,/��F�^����L�Q?-Ex��l#Nw��]~�����c���Lʟq�	�u��������&hR�A)��C,���z�z�i�O*�	�*$�Y�<r�{ز��n�J���Uw38�T��
+KL؃��A���'���w	&�w�;���3�N��4-6�
+���Iu��"��Lͅ����?���ق�"Sĥ��ps�0AڠD��"6-�HN�w�H�JW2����!��b�\7�E��ݴ`����@�S�]	{��M��7��>s��d>+QY��g ��80��y�1>�=@.2Hc�
+6Q��Co��l�
+����
+܍eN�k��|�x��PQ�Sk�{��3)r�ֆя.�����u��֪�ֱ�}����%�T�&ts�6���H_���~�SG8	�
+j	402�B�X�ڽ� �\���=�p4��{I������T�I��y�3>&��T�+L7�nB�ꍖ�}���̪&Y��J���3��S��H��ho6�Zkr<�̵�v�����'>2�hk#��U�y|֓M�;�%��YC^�K���P;�W���	����`os�y? �G��I���,�@�f��b���q�x�s/6Jj-FJ=qT(u�ZgC��SAI렏�i�l�~�헬���:�9�h�at��L1��oqwO5���
+j9r�x��t����� �Ǌ�h������~?�;������8~�䜀.ԃѢ�
+M4�����^�9�zzr�jI��c���#	��xs\���މ���^�
 W�B��o
+��T�xָ�6�{@rqIVU�2_kFK�D�������}��=���)�E������~6��6a-�q�Pn���2�
+K�ׄ%̉w�����H)/�v����;j75�t6�5�W�D���=�����E8V�]Y��n�Omq°5�2/�S�m��9�����]�5q( `��x���C��(�!���?�|�ᐷ�OLY�7���U>�EG
+e�D��ԡ���A�UW�(��zk�}:;���s~:� �R�N�W�3ċ�V���<���f�u�������-�:=o~��!��tl��O	9i��+H8u`F����t�%O��<z�����?_3
+$�������(�u��C2�����f�.Wr�P�c�i*���tR�T������m�]�
+���	���v,
+����j�����>�w#����T�+&gw�&"��1�Re���p;Wz��K~�l���}�=*�E��)�^���zݾ��{CR=�O`I���R�29�/־����&�	���T�S��){^��S3?9{��{�F��l�\�-7�]�g��I��	Vm8ƾF�2�`����*�>���#S�(V��W9�L%�m0ok%O�)�?�hs�p�?Q�+#s�߯�=�5F�m�g���(�x���"��ʖ�?�2���Y�J�	�/��2�PUI~�� ��Wm,k|�[{(?��s�q"��Bl�������8~�5W�1��x�q����%t�w�oE:�� O��<�`��O隖*��H�N�m�'�k�Hu�$�c�L�B�k�h�K:����c�BU2r4|��#6�=�<�!`��r�E��,k��g��q+c�3���a4�%bK��4z�p��>����C��Q؛��Ət�iM��2�����^uHQ�������-���Ջ*
+9֊�
+׹��gN�11�W�NW��j��=�D�R������ӆ79� i^�@];�ac��:i��;�2�V��ڼ��R���n�_��6a��9���D�Y��%�����#���4�3���}%�-Ĉ#wn�`Jv����KI"�Ͳ=�j��zF�,>���;f� �ˈF5�u�$��l�^9~b��]�m�:�3�/[���G
+l`�	I1K@�Ƨ�w�$�$p# @.���EOl=4��C�N�3?�Ҕ�
+���W��耦�o�K����68T�^[*	�!��m+Қ�=0�X�#?�7\�K�<h��E��&��sAǠ#6"t[o_��O�,�Rۅ��JDLV�[�-�>���$o7��H
+��=�_�n�Ͳv�ʼ#�$���+N�8ov���
+�SG�����A������<��H�[Z�),@���!U�L�j5_�D�F<���G��йsT.���?a[=�~>6C����'����FR���X�EV	�	����x�^Y$p�1hc6�z��Lq7�N���ɘ>|��؜�n��do���I,X�s����Կ'nm1�h��PʴM��k�-b�h�g���n�
+�����
+�e7j�z�Z��J!.
+������v@e��p�ͅ�{�F,&�jU\x��)j�� ͨ GQ?V�U�1
+��Q.�϶�h<$l&٥��rv,����i��حݟϰ4�p�D�U�`�Bq9Nd�rb*���e�p�QcTy���'A1�[�J�]�v�k-�*��3:f�?~x��o�lE�K�ģ������y?r������������{�^�59�'��c�h*��]�gӳ�S�&w���7�����A���O[��`'; �
+��}H�
+endstream
+H�l��n�0E��/[u�m��'!6�&���$3R�sl!����ߏ�3S��,�����yΟ�����"�9���gѴ��~�o����mȔ������vf��8��5;ۇ�U���88�㗸{?��������΄y/�o��ut~l�Uܝկ�<݆��w>�B2��4��b������(��Pi��w~���	W�U�עj�:���3&�"͹4�0)��#h^�qh�w)��j�A.ZjA�-�Pj�����W�E*��#�cJx�
+xQ�s<^\�JS�E���-r8d�-r�(�h%G�E�N���ndj&���=��w�^���jo�����0��
+endstream
+x���Sx�Q�5�v�����v:�m۶ݱm�v:��������}}��s�{�FaԨ�9')��������-�wzN�������������5����H�OJ���H��ƞ����� '$�61�6�g��8� <��d���t2��
+J�������NN�쿊�����"������+@��K�W������_jm�-��+\����������
+г��s��b�B,�����+����@�����+`���0���7t�0s�l���c�?��@��?���
+;�i���j�& ���r�O��X���ASe��
+��|���������w� ~+t��NR��V��@
+3d<���� ���skޓ�_��
+�N�R�ֺ��3���v<�'����/�'�g�B����¸�����!IG!�U��G�7��b1�'�[��5\(��H��0T`ȴ>zς��ɰ�(���[z����\x��F���Q`�M[Y���X��%!��*���#�����
+e����쌃��d�+��\�C�I��],�Ri5������/��<���菁��Y+������7
+CV���2���D6�	�s3�N@�O�+��5�����/��>�g=�(�&e��q.Ȫ!^�N�mUJ�WG�
+���)�M\��3��{��7�j'�$�조�E7ܨQD��|��`�O���9���x*�Fe ��W���SqwO�+~���3����H�
+��\$r�-GN��d��0�A��ǝ)�~�a)[��)?�E�{�<�5�,�rm�U`VF���͊��3nt{�d!�;&�����Ÿ�WMk���;��5�ngu�[��[:5��,p3�Mmcѡkb��;�BXH�5����3��:��;!��eX?:]��V��5��� �-:���n��&O�HM�3;O��Q��H�&γܼ'E岏!�4��.��d�[���J(��!f��9��KU��_G�'����;�𠣱���r�0�`�=l�vݠq�ѕvȓ�x�e��A��h=����TB�f&�c:���q�$(N9P��wa`�\�q;Z_1&�J7�Ǆ�F4.�7
+y3ڭ�1R��_���B�\j�3��S� �%4����;G���?<o�o]�K6���EPw�ƕ��β�,��4�,-I��Wp�䧹�Nv51�r�kYŅJ�*b���zu��3�ދЌ��
+�_�b.��|^4s1pR�����7�3f�(6�>9`/��ח|���f�n7��qBe��فQ��\}n�YD1�����Tim%�8�a����:�u�b�:�?�#�4
+��2�Jٸo�b{ݞkl����@z�OF����S�/4���\���K	�|�&M��@�k�u�z>�;�hK�?�
+8I�B�m���8��U1�k#a�$W�n��\.�����{���s؄C
+ųj���W�#=LJ��^E��|D|!��,[�{K��x�Ĕ,@�&l3��J�����e�
+�]�ƇϨ�鸨(,^����i{��>��[֍�%���&M�+��6ߗ���vc��g�΂E9|�����F��n��n_��� �����}%y��(�����mXu �[����K�MeY�H�e
+U��q4�G8辐8����+�h�n�2B��!��fb��gキ�+do�����\z9
+�� �Z*�R謬�{����&n y@��B)�F�����ZB�ħ�뎻�ݖ։���x��$�!;�(^��� PY�ٝ��E����Fny"��>������:�u��LFKl^D("~��=$�����{��>lI��j�W!1�.
+F|N@�����=�.��m�W�<FB�t�����A�Ȩ*0#=��V���I-�����4�ŏ�Oz�
+�5&��nP�o���wF5�3/;�u��O.�R��w���ǒ?��1�(���}$��Gt=)3B�ʦ���"�����rj�r޻'��e���tnM���#��)9�36vo��2^/���U
+5m�ͬ�oԠ��ҋ�^�F��C���R���]6�KD��8�o!�&���V-�t�U��e@7���g��TWS��CH9�Ui�c
+c�������u���t���pu"'&�<�E�?`"qdY�ZK�V��F���D�:�nwE� ��|wZ�H�u!�/��~V��
+�����F.Z0{MqؤLgHK5��]�~v���<��#.oe��-9�2�y�#���u��l7��#�O��>�A��[�ӊ��2����ٕPk�
+�q�<����2���!�s�1��6Y
+`�����å�xYN�;_��ᆜ�;�O$R(���'�i{ԧIh�|.K�X�'&.�>�\��!�/~P��O�ލ��{uM��	Ω��S1��TY�	^t����N-4\0^I�V/�Q�y�-��T��,�u)����e&��V�.�N��lI�xX�ؖ�]�$�n�d�~��U�B|�)������cT.�˭����W�~B#?��+��-
+�xC)�&%���/�{�
+�|�x|��9��zKm9$�6�y���h�ɬ��%�R�HD9����K�uj�q�!���>ۑx~��2��)�ޥQ�j:+���n�v�8�'d	p0?��[�t�}��T�l���Lf@����\�g��	H�������b�0<�Q���\E�K�F�,���<��H�L���$����.~C6�<���E!�@����v�"�i7�X�-��HN�5lGz��~���]�X���bIӱ2�4���6�`�!�G���3v}�^�1�*���Z�i3ik�6�a4���E�����/Im�����ѹ�W��P?����:��x��\� �I$f��z�J�J�E=�.�e�\�C��b��]�7_G��*C�.��>E�<��o�����b
+�֬ 1�P��j
+N�',���t�x6��Q}�ըO�x���Ȼ��#s]�eYzy�U);i1r-0�&���i�?�`i
+�tZ�ڇ�I��ʶ��P�k��p�C��c�Lj��P���|l�%W=�~z6�������P\��
+��P��2t�IVL��x�J��I$�`����֔�g�t�V��\���{Y��j����p�����p��m�AD����ư�z�6����9�';b�p��ѽd�R���uOl�SX�p���i���^V��s�ֳ었����)E���7�Rd
+��(!c�}Q1]��Ϲ���+����!�h�J��:�n{�l(�c���B��͊���'k�]�s�8�<�T��,i�ʧ�Vp��ES�}�G �(��sn�T�^���L�������u'���7����ώ`�s�6*M\�6&|�D�@�j��VB���Ư]������y0�9W�
+��8`l����O%���Pq�у����/lV�'�y���^]0{�sT�&����q�"@��6�� ��p�#�G��UH��?SP'i���-A"���	u�\���Iv:R#gz�D��8�(T���N/l҄L@.��<�Y$LC�5���8��`�����K�bA�	=
+��9:B�����|�VVͲ�?��<M���ffWs:�Md+�.R[2]�U��	1qG��s�
+J$:�Vn�W�B]�E��58���?��Y�2���h�h14:]��)��0�r7�v�@�s�4��Р�+��5���fϭ�I��5*�DB
+\���:C=�
+ȡt�^Iz^����Z��Cѫ�k���X��}d�⥀��$�I���@��J�gӓ���f	�q
+&N��Q���K za����7u^1�~�B�BE"�Gc���~=U���\uBs�Q �O�	H8Y�Eeؽ�?�c��tPΘLc4��S@�n7o1?���U()Ǡ=��`L�.��`��3d/�	�=�܊�Sҩ���uY�,ƵaL��ah\�𒨀V��$6w���Q7�A�T	���+x��hl���<�"G��Y��o%�sD$�(�J&��>�J�V`�Ua�:�6���3���b'��@3��&ȗ�1u5���?�r:�D~��H�Ͻ=��`l�c5�����T��D`~���AD��`Z�:"p,��똮G���)�|��Ubi��NQkza��e�%�Ri��c(����9����w)�T��
+�O�a����F\��'��7L�F�0E�p��)�*?���&uQ��W7��.�
+_�p�u�tw���lv�/b�0,2����L���~j���E�,��6�]��atj[�X��������[����`L�Pq����p?gGta�q=l����_��C�vs$��MT�w;�æ����XV�o�E�ˠ�isݣ�E��|���-!���5Ze���ȋA��1մij���$p��7»Y,��c_+�\�����f�A	q����vtu"*+i���zEY6�n��Ҁ�ÌXo��8�)�mpo�
+������1��K/ڄ��E�"��WH�w�4�Z��G�?d�}�C�8�0�p^��;|f�bz���I��Z��f���W��n�ŪB�Z.�>3���}w�-UQ�ևy
+��$��ӻ�VcL3�fk0����B+9�#�u��A�3H�+S~��u~SV��06�g�~��ej�Q=q�k���9�))B@:GG�~?Y�� G8�6�࿸Ǎ�JvF�����3����`�j�a/E���IN���cs�)�	�!�z�Q���-h[�+��**�������a.����"�Q�v���c�v���X
+���@úN[P�X�uowF<q��9�9�<��@�'m�e1��ݞ�����^��3v�HZ�V��9jVBBK����'��o��E�;P���,��?��ZQU�����/u=��� /:Cչ�|`�:�qj��M*�M�CZ��O�EȏR��<!/�<GN�;̥8�u�b�O|���X��
+�mDx!
+�i0H�ɲ����AR`��;�H��OD�o�(���w�Y��Ȏ���=���j�%�&"����}�u塀�L
+�h�z�FЕ`�UDM��pӿ��m>"��T^��Ǹ�����-�	���Y>�/��u)Z�I�)��R������g²"��;�oPy�$q#eGf9q�
+2�H*ͨ`�_�J0%3I�����J�� l��GP�ǀH���>[dE����<������&Ǒ|�8�����j��-���T1mq�s3S�IZ�Q`����]��e+�zXY���	�|�'` �x2�rs��^�~�u�[�Ͱ ���.E��s��LC����G�/P�6�m����݅��PO�O1bcb)��8��:w�:�L�r�L��\���\��� #���-'�O*e��x��7K��%�������qx��>�e�Z��}����Y��ɧ�1��b�lL����l��-烶Byߠ�C58�/ˍZ�Sw48�m�o���Ew�p��I��u���J��0͇ȟPk3s��q&A��KR�/����˕07n�AׅB�a���-�����M���U/����t8�Z��L��!|Is�,�ǥ�I�����U:�,�$�ϑk��u2EkBr��n#��<�c��aHWArw^r���W�\�ȕ��_[�$�-#���me:vi�E���|$�R�r{�XQ��[�<��Q�+��@҆�jVR��F<�s���:K�v<�U�␝"��Y���A���bh��
+��O�S�W{SW��%�,O��b5v�o�و�q��2�<��L�e���7w���
+d$������"a�9\p��͏2Q����L�\��=.��]^��"��=��{��	4��#|�[����ΈZl��]clxđ'R�oUvw���O�R("g[^���8�Õ����Gz�!�}J���_I��M�➥*����w��*}ˏr��׏TnR�����X'z^�O�2��'�6��B<�S�q�A���mV�4&	�,jq�K2�
+��ݿ�U�13[.y>}p�Ƣ0�b��#m��Y�X>Zуv<)��X�9�Z�����ymt0��8��8bFh3đRި��������^Z:bPE�M�4?�r=<o���|�'#�QSDc�~0�(_�5��x���s^�4��E����jj�yt��
+r?9I��|,}�H�m�̍d�ʐ�u��cs�Z�$cϱ)�Pv3�V��y҉�K�A�����`�"�ɤqDW�;?O(��E�mC����vŦfj4D;�L^.v�(B�Zo6�ė��^h�d��x��(�ӂ{�U�7��t������p+^�Tf ��ɬ��OBu��ݐ�����!r�����#�����kt�D�?-�>>4�jtC]t���-��Auj9r���N�����F����_|�>J^�b���Q��!�X��L_ib����4�Hkf��1?mm1�3�������>N�R/�W��Tn��}�#�kn���\���s��R�V)��`�k�̋*_�kl�r�O_�
+��<
+>���<c��p����(�rژ�]����F�MEY�^x��[���K@#���~`�d�pl���j�bCB�_�Fk�HY{�'*����3T{���&S�#�.�ERx�q��6��k���@�$A8e�u��5z�wI
+Z����p�H����D�c�-�r/%'�t{�#��*3�;�[�R:�)�XZ>���K�vV��+a[�XL��R���Ej�qަ����N����V3I0��#�	�6^V¼���8^^e6�������
+���Y$a�"�)����
+V2r*�B)
+CA�S��֝H03�����@�ˑC*/j��3�����RCsL�S�x�HB�\}���*.�:���������g9�#�����ٲ,�Gk���p+�8w{�(E����֙+�)�����.�F�'�Bi��P������1�l�{7T/���>P�87hཋ~����!癛
+�֧/���S�2v�A�
+FyLf������!ku=�\蟢��'�y�&�V���p���_~=��}+�]�q*�n��s�S䀘H�ІN-s���M�2��h0�L@����Ua���+&Di���^Ӳ�4ʰG]�9����_�-�u0	e{@��cE�
+���֛���N�gjV�+�ǹe��:�:E��m
+�Ӱt`�Q�Y��+���K���b�DPg�E�_^WR�L�b�'�'�y�Y�^gL��^��G���mYdMXw�V?�����5�/�;�p;�S��I����,�{�m+�V������d�6=�����)g�`" $N��W~�&5���Q�M�
+��{�^�Y$�P��'�y�U�墲5h�/+�����᏷��=m�?`�p$;����������KC��R��#J��e=�������d+�]�bzm ���B�3�Ctb�����j�/����3\���W��_�ԑEd&$Hu�XA��b6~W~ڼ��������6ʬ6�#>��[��4�oyT�C��:��vڰ1�j���V��/��?��',���m���-���c_
+endstream
+H��W�n�H}��<h�;��`_ċ\�X�/�ŀ"[�d����奄��;�Fq������9U��+�iֱ?�<_��ߥ������e���;|x.����_]^_�ɷ��\�7��d�l?q劸ǧ�Mp�qC.\g��$#'�����G?�_���}�i��=l��5iE������±����|���2����q݈�2lX=�l�2ϥ��Ғ`�/O��_.�ł%��	l��Lon������Jۿ��=c\��925\�㝡��bi�YѤ]QW�޲n�YQ�]������F��yQݓ��$�n>��3���M]���.mY�o�E������-��8�2Bbo!���;�u%�������}?�g��p�{��N�uU��EےWd%������YW�4��-�$Оe��&mO�꒗����K�#��;I$4�hj���n����y��\hՁ��*�N�9�R37���w�hC�Ğ����Ỵܚ�+�bg��#5�}F���ƥ���IEw�I�nG%��x�>��Ȕ�%� ����`�>Dc�ۢR��[y'�w�.C�˱H�߲/�(ڼ���]�G��-��|��}
+�z=Yvm:�'�'9P������82XdY]u�EQ\���
+�bP� ?�(�3�*/Ғݥ�Wޒ�%r�Y3*��w�6�N턷�t�?��S���=iCB��p�&�g�!��8�%>�:�\J ����qݤ
+f��hU�	o�-t��(���fn�Am���:�+��2��3�U�ai,X�C�k�5����vi��q����.El$�gd�=1���I�}-�����U���G/����+�e	��s�3)k�I�h�?h�,}�(9$�Zh4���L��#OK�NS��[�願ާm�f��Z��Ld��-���R�=���mAL6��r��ʬ�]*��LrUq��KV�p�$�d�g�%����^��Uwh�±��z�
+�jo��X)����jCEN�ea�px9��Q⼥&�����C�P򋓚�u�vX���d��O�p���E8a=�J��࿄��Wvt�
+�e��+ ۯ�g��'^(��ęh����A�Uw��S��RQ.~�(C����UB�KU����<��������f�%��4�[+(��ڔ�h;����
+�C��g�Ȇ@������Egg�!<��OJ3#5"3ǭJw(�Q��/�7�1<���σ�.EAQ�ǩ������v��q"e�W����U���P8#�3��#,����L�!������zz���8I(�04���)%�e�b�5
+3$�}"��r�n������lZf���!9��83b�}Za����eI^}�ю�h���P�eJ�
+.�ߍ?����r Z�ɧ;�Ѱ
+��0,��SC���_S�����h�k^��,NB��V��:�����FA(⭌���1�F��.-��N�5
+ƫe2s�X��h�u|���M*�K	���Ƕ"GBV���� �@:k)ZJ�08�wT�O��g8�s�4�]��@� ��;P���8�o�,���L1�qxn��N�q��������᳷�d�zvJ#�?��X^
+���=��;�C��k��dJ��H5��P�� �G{&�n(/4]ؗ��Rg����G��1�0�^�۬�e�������YrYpM�1`U:;悚m���<3��@#�3T)JB�L�5T�B6 �"�
+�
+endstream
+H��Wmo�8�ί���uc���Z�B�]�.��I��)���MB�ܯ�ql'@�B�6�c?���䦗��s</���h��ps�]	7���/��e@]�g�M-��˗�A:?;��� w��}�u`��ի|�{��6j����o�gᓡo��|?�5���[8�P�a!��J=���^�]�}Q�a�PYr�~un"���g|��e�� *����Xʁ��$^u���;�w �t�f�0
+0�zQ0����$��
+�yR~І��F�F��x8I�2Qz3�mw%_@�T�њ��jr�4$\���9��i�^c;-~�<Äq�XI�A���s�Z*��]�J���`�8-��`��y]���+S�K��"JM��Xԟ&�N��&R�#y</�9'�UW�����N��*
+Ѽ�� � {.T��2+U2�cj��ѳ�F׽ޝ�q�GJ��6q���.��N�?�w�i*����R?J�:����8A����0��`��A�`ř�z	�ݿ��U��K4�6��y�+�g����:��&p�'V���_����ױx��Y.�:��Qe��v��A�}�<���)߫�7�B���Yz])<]]�b��*u~�"J�Z�4�p��f��'i���vmr�Z席O?Nk;KRl*�-}\i��9�b.<#bn����ͳ]^
+��g�-/Q<���Lv����'J
+��l�\���;tU����Ri�8�,��%��q�f��3ҥ�'؎��8!~�e)Jկ����k�1�;H�/�P�j^�A,zqǱ��58a��J5�&�����-©i��U��V��(���k'T��B�Q�o��|�m9?��`��rz
+endstream
+0 358
+0000000003 65535 f
+0000000016 00000 n
+0000004592 00000 n
+0000000005 00000 f
+0000043405 00000 n
+0000000006 00000 f
+0000000007 00000 f
+0000000009 00000 f
+0000022782 00000 n
+0000000010 00000 f
+0000000013 00000 f
+0000010357 00000 n
+0000038789 00000 n
+0000000015 00000 f
+0000006359 00000 n
+0000000019 00000 f
+0000023911 00000 n
+0000011441 00000 n
+0000008203 00000 n
+0000000021 00000 f
+0000009275 00000 n
+0000000022 00000 f
+0000000025 00000 f
+0000011331 00000 n
+0000011414 00000 n
+0000000026 00000 f
+0000000027 00000 f
+0000000028 00000 f
+0000000061 00000 f
+0000051327 00000 n
+0000051288 00000 n
+0000051193 00000 n
+0000051154 00000 n
+0000051059 00000 n
+0000050965 00000 n
+0000050871 00000 n
+0000049169 00000 n
+0000050781 00000 n
+0000050691 00000 n
+0000049046 00000 n
+0000050597 00000 n
+0000050503 00000 n
+0000050408 00000 n
+0000050314 00000 n
+0000050220 00000 n
+0000048925 00000 n
+0000050128 00000 n
+0000050036 00000 n
+0000048802 00000 n
+0000049942 00000 n
+0000049848 00000 n
+0000049755 00000 n
+0000049663 00000 n
+0000049571 00000 n
+0000048681 00000 n
+0000049479 00000 n
+0000048607 00000 n
+0000049406 00000 n
+0000047464 00000 n
+0000049334 00000 n
+0000047757 00000 n
+0000000062 00000 f
+0000000064 00000 f
+0000045896 00000 n
+0000000066 00000 f
+0000045734 00000 n
+0000000068 00000 f
+0000043344 00000 n
+0000000069 00000 f
+0000000070 00000 f
+0000000071 00000 f
+0000000072 00000 f
+0000000073 00000 f
+0000000074 00000 f
+0000000077 00000 f
+0000004814 00000 n
+0000005277 00000 n
+0000000078 00000 f
+0000000079 00000 f
+0000000080 00000 f
+0000000081 00000 f
+0000000082 00000 f
+0000000083 00000 f
+0000000084 00000 f
+0000000085 00000 f
+0000000086 00000 f
+0000000087 00000 f
+0000000088 00000 f
+0000000089 00000 f
+0000000090 00000 f
+0000000091 00000 f
+0000000092 00000 f
+0000000093 00000 f
+0000000094 00000 f
+0000000095 00000 f
+0000000096 00000 f
+0000000097 00000 f
+0000000098 00000 f
+0000000099 00000 f
+0000000100 00000 f
+0000000101 00000 f
+0000000102 00000 f
+0000000103 00000 f
+0000000104 00000 f
+0000000105 00000 f
+0000000106 00000 f
+0000000107 00000 f
+0000000108 00000 f
+0000000109 00000 f
+0000000110 00000 f
+0000000111 00000 f
+0000000112 00000 f
+0000000113 00000 f
+0000000114 00000 f
+0000000115 00000 f
+0000000116 00000 f
+0000000117 00000 f
+0000000118 00000 f
+0000000119 00000 f
+0000000120 00000 f
+0000000121 00000 f
+0000000122 00000 f
+0000000123 00000 f
+0000000124 00000 f
+0000000125 00000 f
+0000000126 00000 f
+0000000127 00000 f
+0000000128 00000 f
+0000000129 00000 f
+0000000130 00000 f
+0000000131 00000 f
+0000000132 00000 f
+0000000133 00000 f
+0000000134 00000 f
+0000000135 00000 f
+0000000136 00000 f
+0000000137 00000 f
+0000000140 00000 f
+0000004936 00000 n
+0000004871 00000 n
+0000000141 00000 f
+0000000142 00000 f
+0000000143 00000 f
+0000000144 00000 f
+0000000145 00000 f
+0000000146 00000 f
+0000000147 00000 f
+0000000149 00000 f
+0000042210 00000 n
+0000000150 00000 f
+0000000151 00000 f
+0000000154 00000 f
+0000023798 00000 n
+0000023883 00000 n
+0000000155 00000 f
+0000000156 00000 f
+0000000157 00000 f
+0000000159 00000 f
+0000005551 00000 n
+0000000160 00000 f
+0000000161 00000 f
+0000000162 00000 f
+0000000163 00000 f
+0000000164 00000 f
+0000000165 00000 f
+0000000166 00000 f
+0000000167 00000 f
+0000000168 00000 f
+0000000169 00000 f
+0000000170 00000 f
+0000000171 00000 f
+0000000172 00000 f
+0000000173 00000 f
+0000000174 00000 f
+0000000175 00000 f
+0000000176 00000 f
+0000000177 00000 f
+0000000178 00000 f
+0000000179 00000 f
+0000000180 00000 f
+0000000181 00000 f
+0000000182 00000 f
+0000000183 00000 f
+0000000184 00000 f
+0000000185 00000 f
+0000000188 00000 f
+0000042604 00000 n
+0000042498 00000 n
+0000000189 00000 f
+0000000190 00000 f
+0000000192 00000 f
+0000005706 00000 n
+0000000193 00000 f
+0000000194 00000 f
+0000000195 00000 f
+0000000196 00000 f
+0000000197 00000 f
+0000000198 00000 f
+0000000199 00000 f
+0000000200 00000 f
+0000000201 00000 f
+0000000202 00000 f
+0000000203 00000 f
+0000000204 00000 f
+0000000205 00000 f
+0000000206 00000 f
+0000000207 00000 f
+0000000208 00000 f
+0000000209 00000 f
+0000000210 00000 f
+0000000211 00000 f
+0000000212 00000 f
+0000000213 00000 f
+0000000214 00000 f
+0000000215 00000 f
+0000000216 00000 f
+0000000217 00000 f
+0000000218 00000 f
+0000000219 00000 f
+0000000220 00000 f
+0000000221 00000 f
+0000000222 00000 f
+0000000223 00000 f
+0000000224 00000 f
+0000000225 00000 f
+0000000226 00000 f
+0000000227 00000 f
+0000000228 00000 f
+0000000229 00000 f
+0000000230 00000 f
+0000000231 00000 f
+0000000232 00000 f
+0000000233 00000 f
+0000000234 00000 f
+0000000235 00000 f
+0000000236 00000 f
+0000000237 00000 f
+0000000238 00000 f
+0000000239 00000 f
+0000000240 00000 f
+0000000241 00000 f
+0000000242 00000 f
+0000000243 00000 f
+0000000244 00000 f
+0000000245 00000 f
+0000000246 00000 f
+0000000247 00000 f
+0000000248 00000 f
+0000000249 00000 f
+0000000250 00000 f
+0000000251 00000 f
+0000000252 00000 f
+0000000253 00000 f
+0000000254 00000 f
+0000000255 00000 f
+0000000256 00000 f
+0000000260 00000 f
+0000051421 00000 n
+0000043576 00000 n
+0000045784 00000 n
+0000000261 00000 f
+0000000263 00000 f
+0000041760 00000 n
+0000000264 00000 f
+0000000265 00000 f
+0000000354 00000 f
+0000038961 00000 n
+0000041711 00000 n
+0000006532 00000 n
+0000042731 00000 n
+0000042684 00000 n
+0000004657 00000 n
+0000045945 00000 n
+0000046006 00000 n
+0000047843 00000 n
+0000046067 00000 n
+0000046129 00000 n
+0000047617 00000 n
+0000047909 00000 n
+0000046194 00000 n
+0000047956 00000 n
+0000046261 00000 n
+0000048003 00000 n
+0000046328 00000 n
+0000046387 00000 n
+0000046446 00000 n
+0000048067 00000 n
+0000049123 00000 n
+0000046505 00000 n
+0000046564 00000 n
+0000048131 00000 n
+0000049000 00000 n
+0000046624 00000 n
+0000046684 00000 n
+0000048195 00000 n
+0000046744 00000 n
+0000046804 00000 n
+0000046864 00000 n
+0000048259 00000 n
+0000048879 00000 n
+0000046924 00000 n
+0000046984 00000 n
+0000048323 00000 n
+0000048756 00000 n
+0000047044 00000 n
+0000047104 00000 n
+0000048387 00000 n
+0000047164 00000 n
+0000047224 00000 n
+0000047284 00000 n
+0000048451 00000 n
+0000048515 00000 n
+0000047344 00000 n
+0000048561 00000 n
+0000047553 00000 n
+0000049242 00000 n
+0000047404 00000 n
+0000049288 00000 n
+0000042934 00000 n
+0000043032 00000 n
+0000043089 00000 n
+0000043145 00000 n
+0000045829 00000 n
+0000043220 00000 n
+0000045667 00000 n
+0000043285 00000 n
+0000042810 00000 n
+0000042872 00000 n
+0000006213 00000 n
+0000038396 00000 n
+0000038459 00000 n
+0000038521 00000 n
+0000041811 00000 n
+0000042384 00000 n
+0000042441 00000 n
+0000041879 00000 n
+0000042270 00000 n
+0000042327 00000 n
+0000041947 00000 n
+0000042015 00000 n
+0000042072 00000 n
+0000042141 00000 n
+0000038594 00000 n
+0000038661 00000 n
+0000038732 00000 n
+0000005781 00000 n
+0000005843 00000 n
+0000005905 00000 n
+0000005971 00000 n
+0000006037 00000 n
+0000006097 00000 n
+0000006157 00000 n
+0000023280 00000 n
+0000010808 00000 n
+0000000355 00000 f
+0000000000 00001 f
+0000000126 00000 n
+0000051470 00000 n
+trailer
+<</Size 358/Root 1 0 R/Info 357 0 R/ID[<F61A0DA5AB765B4B91A56F3D8D55392B><546DAC5FF8D6AA44AF194A2DC5007882>]>>
+startxref
+51944
+%%EOF

raw/aaer/2006/AAER-2396.txt ADDED Viewed

	@@ -0,0 +1,1377 @@

+     SEC.gov | Bruce Hill, 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\/498646","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
+              Bruce Hill, et al.
+        Bruce Hill, et al.
+                   U.S. SECURITIES AND EXCHANGE COMMISSION
+ Litigation Release No. 19617 / March 21, 2006
+ Accounting and Auditing  Release No. 2396 / March 21, 2006
+  Securities and Exchange Commission v. Bruce Hill, et al. , (United States District Court for the District of Massachusetts, Civil Action No. 02-11244 (EFH), filed June 21, 2002)
+ Court Enters Final Judgment by Consent Against Former General Counsel of Inso Corp. in Accounting Fraud Case
+ The Commission announced today that on March 2, 2006, a final judgment by consent was entered by the United States District Court for the District of Massachusetts against Bruce G. Hill, of Belmont, Massachusetts, in an accounting fraud case.  Hill is the former general counsel of Inso Corporation, later known as eBT International, Inc., a now-defunct software company formerly located in Boston, Massachusetts and later headquartered in Providence, Rhode Island.  The final judgment permanently enjoins Hill from violating various federal securities laws, orders him to pay approximately $97,000 in disgorgement and prejudgment interest, and permanently bars him from serving as an officer or director of public companies.  Hill consented to the judgment, without admitting or denying the allegations in the Commission's complaint.  In related administrative proceedings, Hill consented to an Order issued by the Commission on March 20, 2006, that suspends him from appearing or practicing before the Commission as an attorney.
+ The Commission's complaint, filed June 21, 2002, alleged that, when an anticipated sales transaction with a major customer failed to close prior to the end of Inso's third quarter on September 30, 1998, Hill and another Inso employee arranged for a Malaysian distributor, who had no prior involvement in the transaction, to place a $3 million purchase order for the transaction that evening.  According to the complaint, because they promised the distributor that he would not have to pay Inso for the transaction, and that Inso, rather than the distributor, would resell the software to the intended end user, this transaction was a sham and should not have been included in Inso's reported financial results.  The complaint alleged that Hill concealed the oral terms of the sale from Inso's finance department and, as a result, Inso improperly included the $3 million as revenue in its third quarter 1998 financial statements.  Thereafter, the sale of the software to the intended end user was never consummated, and the complaint alleged that Hill took steps to cover up the fraudulent nature of the third quarter transaction.  According to the complaint, Hill orchestrated the providing of $4 million in letters of credit to the Malaysian distributor to finance his payment of the $3 million third quarter receivable and caused a false board resolution to be provided to Inso's bank purporting to authorize the letters of credit.  Among other things, the complaint sought disgorgement from Hill of losses avoided  from his sale of Inso stock at inflated prices during the period of the fraud.
+ To settle the Commission's charges, Hill has consented, without admitting or denying the allegations in the Commission's complaint, to the entry of a final judgment permanently enjoining him from committing future violations of Section 17(a) of the Securities Act of 1933 and Sections 10(b), 13(a), 13(b)(2)(A) and 13(b)(5) of the Securities Exchange Act of 1934 ("Exchange Act") and Rules 10b-5, 12b-20, 13a-13, 13b2-1 and 13b2-2 thereunder.  The judgment orders disgorgement of $66,674, representing profits gained as a result of the conduct alleged in the Commission's complaint, plus prejudgment interest in the amount of $30,362, for a total of $97,036.  Finally, the judgment prohibits Hill from acting as an officer or director of any issuer that has a class of securities registered pursuant to Section 12 of the Exchange Act or is required to file reports pursuant to Section 15(d) of the Exchange Act.
+ Hill was indicted on May 5, 2004, on criminal charges brought by the United States Attorney for the District of Massachusetts concerning the same conduct alleged in the Commission's complaint.  Hill was charged with securities fraud, wire fraud, false statements to accountants and perjury in connection with a Commission investigation.  After a trial, a federal jury convicted Hill on June 6, 2005 of committing perjury in his investigative testimony before the Commission.  The jury was deadlocked as to the remaining counts against Hill, and the Court declared a mistrial as to those counts.  On January 24, 2006, Hill was sentenced to a prison term of one year and one day, followed by supervised release for two years.  The court also ordered Hill to perform 400 hours of community service each year during the supervised release, and ordered him to pay a criminal fine of $75,000.
+ For further information see Litigation Release No. 17578  (June 21, 2002)[Hill and others charged by the Commission]; Litigation Release No. 18699  (May 7, 2004) [Hill indicted on criminal charges]; Litigation Release No. 19253  (June 7, 2005)[Hill convicted of criminal charge]; and Securities Exchange Act Release No.  53517  (March 20, 2006)[Hill suspended from appearing or practicing before the Commission as an attorney].
+ 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-2400.txt ADDED Viewed

	@@ -0,0 +1,1379 @@

+     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\/498681","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. 19624 / March 28, 2006
+ Accounting And Auditing Enforcement
+ Release No. 2400 / March 28, 2006
+  Securities and Exchange Commission 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 Executive Reagan L. Lancaster
+ On March 23, 2006, the Commission settled civil charges against Reagan L. Lancaster, a former 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, Lancaster has consented to the entry of a final judgment enjoining him from violating or aiding and abetting violations of the antifraud, record-keeping, reporting and internal-controls provisions of the federal securities laws.  Lancaster also has consented to pay a civil penalty and disgorgement, with prejudgment interest.  The settlement is subject to approval by the United States District Court for the Northern District of Texas, the Honorable Sidney A. Fitzwater presiding.
+ 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 Lancaster participated and assisted others in a fraudulent revenue-recognition scheme by (1) selling software that needed substantial modification, adaptation or customization, from which i2 recognized license revenue upfront, contrary to generally accepted accounting principles; (2) attending i2's internal quarterly revenue meetings without mentioning that i2 was selling software that needed substantial modification, adaptation or customization, facts that would have defeated upfront revenue recognition; and (3) assuring analysts that i2's customer relations were "good" when he knew they were not.  The Complaint also alleges that Lancaster profited by trading on the basis of material nonpublic information.  Lancaster filed a motion to dismiss the Commission's charges.
+ The proposed Judgment to which Lancaster has consented, without admitting or denying the Commission's allegations, enjoins Lancaster 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, 13b2-1 thereunder.  The proposed judgment also orders Lancaster to pay disgorgement and prejudgment interest of $1,172,355 and a third-tier civil penalty of $120,000.
+ For further information about the Commission's action against the former i2 executives, see Litigation Release No.  19306  (July 18, 2005) and Accounting and Auditing Enforcement Release No. 2279 (July 18, 2005).
+ The Commission acknowledges the assistance of the United States Attorney's Office for the Northern District of Texas and the United States Postal Inspection Service.
+ 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-2401.txt ADDED Viewed

	@@ -0,0 +1,1412 @@

+     SEC.gov | Fernando J. Espuelas 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\/498696","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
+              Fernando J. Espuelas et al.
+        Fernando J. Espuelas et al.
+                   U.S. SECURITIES AND EXCHANGE COMMISSION
+ Litigation Release No. 19627 / March 29, 2006
+ Accounting and Auditing Enforcement Release No. 2401 / March 29, 2006
+  SEC v. Fernando J. Espuelas et al. , Civil Action No. 06 CV 2435 (RJH) (S.D.N.Y. filed March 29, 2006)
+ SEC Charges Eight Former StarMedia Network Executives for Roles in Company's Overstatement of Revenue
+ The U.S. Securities and Exchange Commission filed a civil injunctive action today in the United States District Court for the Southern District of New York charging six former executives of StarMedia Network, Inc. with securities fraud and two former executives with other securities law violations.  StarMedia was an Internet portal directed at Spanish and Portuguese speaking communities in the United States and Latin America.  It was based in New York City, and its common stock was traded on the Nasdaq National Market.  On February 1, 2002, Nasdaq delisted StarMedia's common stock.  In 2002, the company undertook major asset dispositions, and in December 2003, it filed for bankruptcy protection.
+ The Commission's complaint alleges that, in 2000 and the first two quarters of 2001, StarMedia utilized three types of transactions to inflate its revenue by over $18 million in order to meet its revenue projections and secure additional financing for its operations.  StarMedia improperly recognized revenue from barter transactions, from round trip transactions, and from sales transactions with undisclosed contingencies or side agreements.  The complaint further alleges that in May 2001, StarMedia used its inflated revenue figures to persuade corporate investors to purchase $35 million in convertible preferred shares.
+ In addition, the complaint alleges that, as a result of the improper transactions, StarMedia made materially false disclosures and financial statements in its annual Report on Form 10-K for its fiscal year 2000 and its quarterly Reports on Form 10-Q for the first two quarters of 2001.  StarMedia officers also made false statements to the company's investors and to its independent auditor.  The complaint further alleges that Jack Chen, former President of the company, avoided losses by selling StarMedia common stock while in possession of material, nonpublic information regarding the undisclosed fraud.
+ The Commission's complaint alleges the following violations against the named defendants and seeks the following relief:
+    Fernando Espuelas, age 39, former CEO and Chairman of the Board, violated Section 17(a) of the Securities Act of 1933 (Securities Act), Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act), and Exchange Act Rules 10b-5 and 13b2-1, and aided and abetted violations of Sections 13(a) and 13(b)(2)(A) of the Exchange Act and Exchange Act Rules 12b-20, 13a-1, and 13a-13.  The complaint seeks a permanent injunction, civil penalties, and an officer and director bar.
+     Jack C. Chen, age 39, former President, violated Section 17(a) of the Securities Act, Section 10(b) of the Exchange Act, and Exchange Act Rules 10b-5, 13b2-1, and 13b2-2, and aided and abetted violations of Sections 13(a) and 13(b)(2)(A) of the Exchange Act and Exchange Act Rules 12b-20, 13a-1, and 3a-13.  The complaint seeks a permanent injunction; disgorgement of his losses avoided from trading in StarMedia securities, with prejudgment interest thereon; civil penalties; and an officer and director bar.
+     Steven Heller, age 40, former CFO, violated Section 17(a) of the Securities Act, Section 10(b) of the Exchange Act, and Exchange Act Rules 10b-5 and 13b2-2, and aided and abetted violations of Sections 13(a) and13(b)(2)(A) of the Exchange Act and Exchange Act Rules 12b-20, 13a-1, and13a-13.  Heller, without admitting or denying the allegations in the complaint, has agreed to entry of a proposed final judgment:  (i) permanently enjoining him from future violations of Section 17(a) of the Securities Act, Section 10(b) of the Exchange Act, and Exchange Act Rules 10b-5 and 13b2-2, and from aiding and abetting violations of Sections 13(a) and13(b)(2)(A) of the Exchange Act and Exchange Act Rules 12b-20, 13a-1, and13a-13; (ii) ordering him to pay a civil penalty in the amount of $100,000; and (iii) prohibiting him from serving as an officer or director of any public company for a period of five years.
+     Betsy Scolnik, age 40, former Senior Vice President for Strategic Development, violated Section 17(a) of the Securities Act, Section 10(b) of the Exchange Act, and Exchange Act Rules 10b-5 and 13b2-1, and aided and abetted violations of Sections 13(a) and 13(b)(2)(A) of the Exchange Act and Exchange Act Rules 12b-20, 13a-1, and 13a-13.  The complaint seeks a permanent injunction, civil penalties, and an officer and director bar.
+     Adriana Kampfner, age 33, former Senior Vice President, Global Sales and president of StarMedia de Mexico, violated Exchange Act Rule 13b2-1 and aided and abetted violations of Sections 10(b), 13(a), and 13(b)(2)(A) of the Exchange Act and Exchange Act Rules 10b-5, 12b-20, 13a-1, and 13a-13.  The complaint seeks a permanent injunction, civil penalties, and an officer and director bar.
+     Walther M¶ller, age 45, former President of AdNet, a StarMedia subsidiary, violated Exchange Act Rule 13b2-1 and aided and abetted violations of Sections 10(b), 13(a), and 13(b)(2)(A) of the Exchange Act and Exchange Act Rules 10b 5, 12b-20, 13a-1, and 13a-13.  The complaint seeks a permanent injunction.
+     Peter Morales, age 50, former Controller and Vice President, Finance, violated Exchange Act Rules 13b2-1 and 13b2-2 and aided and abetted violations of Sections 13(a) and 13(b)(2)(A) of the Exchange Act and Exchange Act Rules 12b-20, 13a-1, and 13a-13.  The complaint seeks a permanent injunction and civil penalties.
+     Peter Blacker, age 35, former Senior Vice President, Global Sales Strategy &amp; Partnerships, violated Exchange Act Rule 13b2-1 and aided and abetted violations of Sections 13(a) and 13(b)(2)(A) of the Exchange Act and Exchange Act Rules 12b-20, 13a-1, and 13a-13.  The complaint seeks a permanent injunction and civil penalties.
+  The Commission's complaint alleges that each of the defendants planned the fraud, played important roles in its implementation, or both, thereby violating the federal securities laws, as set forth above.  Finally, defendant Heller, without admitting or denying the allegations in the complaint, has agreed to settle the Commission's charges by consenting to a permanent injunction, a $100,000 civil penalty, and a prohibition from serving as an officer or director of any public company for a period of five years.
+   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-2404.txt ADDED Viewed

	@@ -0,0 +1,1395 @@

+     SEC.gov | Thomas A. Skoulis, Peter M. Frankl, Alan B. Lefkof and William D. Baker
+         !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\/498711","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
+              Thomas A. Skoulis, Peter M. Frankl, Alan B. Lefkof and William D. Baker
+        Thomas A. Skoulis, Peter M. Frankl, Alan B. Lefkof and William D. Baker
+                   U.S. SECURITIES AND EXCHANGE COMMISSION
+ Litigation Release No. 19630 / March 29, 2006
+ Accounting and Auditing Enforcement Release No. 2404 / March 29, 2006
+  SEC v. Thomas A. Skoulis, Peter M. Frankl, Alan B. Lefkof and William D. Baker , Case No. C 06-2239-JF (N.D. CA filed on March 29, 2006)
+ SEC Charges Executives of Northern California Internet Equipment Company With Improperly Inflating Revenue
+ The Securities and Exchange Commission today charged two former sales executives of Emeryville, California-based Netopia, Inc. with fraudulently boosting the company's revenue.  The Commission also filed, and simultaneously settled, charges against Chief Executive Officer Alan B. Lefkof and former Chief Financial Officer William D. Baker, alleging that the executives later learned of a side agreement yet failed to take timely corrective action.
+ The Commission's complaint, filed in the Northern District of California, alleges that Netopia's former head of worldwide sales, Thomas A. Skoulis (of Menlo Park, CA) and former head of software sales, Peter M. Frankl (of Addison, TX) entered into two secret side deals in 2002 and 2003, each for approximately $750,000.  Pursuant to the side deals, Netopia's customer, which had limited resources, would only have to pay Netopia if and when it successfully resold the software to an end-user.  It was improper to record revenue for the transactions because payment was contingent on future events.  Skoulis and Frankl concealed the deal terms from Netopia's finance department.  In connection with the 2002 deal, the Commission alleges that Frankl directed that contingency language be physically "whited out" from the face of the customer's purchase order.  For the 2003 deal, Skoulis directed Frankl to hide a copy of the customer's side letter that set forth the contingency.  Their actions caused Netopia to report fraudulently inflated software revenue to the investing public, and for the fourth quarter ended September 30, 2003, allowed the company to report its first profitable quarter in three years.
+ The complaint also alleges that Baker (of Fremont, CA), and later Lefkof (of Tiburon, CA), learned of the payment contingency associated with the 2003 transaction but failed to take immediate corrective action.  In April 2004, while trying to collect payment from the customer, Baker learned that the customer had no obligation to pay because of the previously hidden payment contingency.  Rather than take corrective action, Baker concealed the side agreement from Netopia's Audit Committee, including requesting that the customer delete references to the deal in communications with Netopia.  Later, on July 2, 2004, Lefkof obtained a copy of the side agreement containing the payment contingency for the 2003 deal.  Notwithstanding their knowledge of the side agreement, Lefkof and Baker allowed Netopia to issue a misleading press release on July 6, 2004, that incorrectly treated the outstanding order as merely an uncollectible bad debt.  In actuality, the Commission alleges, the sale should never have been recorded as revenue, and Netopia should have restated its 2003 financial statements.
+ The complaint charges Skoulis, Frankl and Baker with securities fraud (Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder; and Section 17(a) of the Securities Act of 1933 ("Securities Act") as to Baker alone), and also charges Lefkof with violating the antifraud provisions (Section 17(a)(2) and (3) of the Securities Act). The complaint also charges Skoulis, Frankl, Baker and Lefkof with causing Netopia to report false financial information to the Commission (Section 13(a) of the Exchange Act and the related Rules).  The complaint additionally charges all of the defendants with causing Netopia's failure to maintain accurate books and records (Section 13(b)(2)(A) of the Exchange Act), and charges Lefkof and Baker with causing the company's failure to maintain adequate internal controls (Section 13(b)(2)(B) of the Exchange Act).  The complaint also charges Skoulis, Frankl and Baker with circumventing internal accounting controls (Section 13(b)(5) of the Exchange Act) and charges Skoulis, Frankl, Baker and Lefkof with falsifying the company's books and records (Rule 13b2-1 under the Exchange Act).  Baker, in the complaint, is further charged with lying to accountants (Rule 13b2-2 under the Exchange Act) and falsely certifying Netopia's financial statements (Rule 13a-14 under the Exchange Act).
+ Simultaneously with the filing of the complaint, Baker and Lefkof have agreed to settle the charges, without admitting or denying the Commission's allegations.  Among other things, they have consented to orders requiring them to pay civil penalties of $35,000 each, while Baker also has consented to the entry of an order barring him from serving as an officer or director of a public company for five years, and an order prohibiting him from practicing before the Commission as an accountant for five years under SEC Rule of Practice 102(e).  From the remaining defendants in the litigation, Skoulis and Frankl, the Commission seeks disgorgement, civil monetary penalties, and injunctive relief, as well as an order barring Skoulis from serving as an officer or director of a public company.
+ In a related proceeding, today the Commission instituted and simultaneously settled administrative cease-and-desist proceedings against Netopia.  Without admitting or denying the Commission's findings, Netopia agreed to cease and desist from future violations of the corporate reporting, books and records and internal controls provisions of the federal securities laws (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).
+   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-2407.txt ADDED Viewed

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

+     SEC.gov | Armand Dauplaise and Bernard Shinder
+         !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\/498776","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
+              Armand Dauplaise and Bernard Shinder
+        Armand Dauplaise and Bernard Shinder
+                   U.S. SECURITIES AND EXCHANGE COMMISSION
+ Litigation Release No. 19643 / April 6, 2006
+ Accounting and Auditing Enforcement Release No. 2407 / April 6, 2006
+  SEC v. Armand Dauplaise and Bernard Shinder , Civil Action No. 6:05cv1391-ORL-31-KRS (M.D. Fla.)
+ SEC Settles With Former Bio One Executive Charged With Fraud
+ The Securities and Exchange Commission today announced the United States District Court for the Middle District of Florida entered a Final Judgment on April 6, 2006 against Armand Dauplaise, of Winter Park, Florida, based on his consent.
+ On September 22, 2005, the Commission filed a complaint against Dauplaise and Bernard Shinder, of Boca Raton, alleging fraud and other securities law violations during their tenure as the CEO and CFO, respectively, of Bio One Corporation, a nutritional supplement company located in Winter Springs, Florida.
+ In the complaint, the Commission alleged that Dauplaise and Shinder violated the antifraud provisions of the federal securities laws when they failed to disclose the company's default on a $15 million (Canadian) promissory note and related subsequent events.  According to the complaint, Bio One purchased a private company, Interactive Nutrition International Inc. (INI), on March 31, 2004, in part, by issuing the promissory note.  The complaint alleges that Bio One never made any of the payments on the note, and the company's former executives signed forbearance agreements in August and November 2004 acknowledging that the company was in default of the note.  According to the complaint, in December 2004, the note holder appointed a receiver for INI and provided notice to Bio One that it intended to exercise its security rights under the agreement.
+ The complaint further alleges that Dauplaise and Shinder failed to disclose the default, the forbearance agreements and the appointment of a receiver in its quarterly reports filed in August and November 2004 or in its Form 8-Ks filed in November and December 2004.  The Commission also alleges that the defendants violated the record-keeping and reporting provisions of the federal securities laws.
+ Dauplaise, without admitting or denying the allegations of the complaint, consented to a permanent injunction which prohibits him from acting as an officer or director of any public company and that enjoins him from violating, directly or indirectly, Section 17(a) of the Securities Act of 1933 ("Securities Act"), Sections 10(b), 13(a), and 13(b)(2)(B) of the Securities Exchange Act of 1934 ("Exchange Act") and Rules 10b-5, 13a-11, 13a-13, 13a-14, 13b2-1 and 13b2-2 thereunder.  Based on his sworn financial statements and other documents submitted to the Commission, he was not ordered to pay a civil penalty.
+ The Commission's litigation against Bernard Shinder is ongoing.
+ 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-2411.txt ADDED Viewed

	@@ -0,0 +1,1379 @@

+     SEC.gov | Dollar General Corp., 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\/498826","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
+              Dollar General Corp., et al.
+        Dollar General Corp., et al.
+                   U.S. SECURITIES AND EXCHANGE COMMISSION
+ Litigation Release No. 19653 / April 12, 2006
+ Accounting and Auditing Enforcement Release No. 2411 /April 12, 2006
+  SEC v. Dollar General Corp., et al. , Civil Action No. 3:05-0283 (filed April 7, 2005)
+ Court Enters Final Judgment Against Former Dollar General Chief Financial Officer Brian Burr
+ Burr Will Pay Over $1.2 Million in Penalties, Disgorgement and Prejudgment Interest
+ On April 11, 2006, the United States District Court for the Middle District of Tennessee entered a settled final judgment against Brian Burr ("Burr"), former chief financial officer and executive vice president at Dollar General Corporation ("Dollar General"). Burr was the only litigating defendant in the Commission's action filed on April 7, 2005 against Dollar General and several of its former officers and employees for alleged accounting fraud that overstated Dollar General's earnings. In settling with the Commission, Burr consented, without admitting or denying the Commission's allegations, to the entry of a final judgment, which permanently enjoins him from violating the antifraud and other provisions of the federal securities laws, orders him to pay $1,204,598.17 in civil penalties, disgorgement, and prejudgment interest, and bars him from serving as an officer or director of a public company for five years.
+ In its complaint the Commission alleged that, in 1999 and 2000, Dollar General's accounting staff determined that Dollar General should have recognized $13.4 million in import freight expenses in fiscal 1999. Rather than restating prior periods, as required by GAAP, or recognizing all the expense in fiscal year 1999, Burr participated in discussions of possible ways to account for the $13.4 million in freight expenses that did not entail recognizing all such expenses in fiscal year 1999. The complaint further alleged that on February 5, 2000, Dollar General's former controller sent a memorandum to Burr and others describing a $10 million "variance" in relation to freight expenses, and Dollar General's intention to charge the "$10 million 1999 shortfall" at a rate of $833,000 per month during Dollar General's fiscal year 2000. Ultimately, Dollar General recorded the shortfall in this manner. Burr knew that deferring the bulk of the expenses to fiscal year 2000 avoided the negative impact on already announced fiscal year 1999 earnings as well as year-end bonus payments to Dollar General employees, including Burr. The Commission's complaint alleges that, by deferring the freight expenses, Dollar General met certain targets, including an internal target for employee bonuses and analysts' expectations for the Company's earnings per share for fiscal year 1999. If Dollar General had recognized the freight expenses in 1999, it would have fallen short of the bonus target and analysts' expectations.
+ The complaint further alleges that Burr engaged in insider trading. After Dollar General terminated Burr in February 2001, Burr and his counsel met with Dollar General senior management. At this meeting, on April 12, 2001, Burr's counsel told Dollar General management that Burr could not sign a separation agreement until he knew that certain accounting issues were addressed by Dollar General. Burr also wanted a release from the Company for any responsibility for certain accounting issues. On April 5, 2001, Burr exercised Dollar General options at $17.5360, and immediately sold 126,597 Dollar General shares at sales prices ranging from $22.50 to $22.84. Burr exercised additional Dollar General options on April 27, 2001, selling 5,000 Dollar General shares at prices from $24 to $24.02. After the Company's April 30, 2001 press release announcing accounting irregularities and the necessity for a restatement, Dollar General's stock price dropped from its Friday, April 27, 2001 closing price of $23.00 to a Tuesday, May 1, 2001 closing price of $15.76. The complaint alleges that Burr avoided losses by his sale of Dollar General securities.
+ Without admitting or denying the allegations in the Commission's complaint, the Court permanently enjoined Burr from violating the antifraud, internal controls, books and records and lying to auditor provisions of the federal securities laws, specifically, 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 thereunder. The Court also enjoined Burr from aiding and abetting violations of the periodic reporting, internal controls, and books and records provisions of the Exchange Act, specifically, 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. The Court further ordered Burr to pay $1,204,598.17, comprising $494,824 in disgorgement, $143,950.17 in prejudgment interest, and civil penalties of $565,824. The Court also prohibited Burr from acting as an officer or director of a public company for five years. Dollar General and four other individuals have previously settled the Commission's actions against them. For more information, see  Litigation Release No. 19174  (April 7, 2005),  Administrative Release No. 34-51501  (April 7, 2005).
+ 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-2412.pdf ADDED Viewed

Binary file (34.8 kB). View file

raw/aaer/2006/AAER-2412.txt ADDED Viewed

	@@ -0,0 +1,109 @@

+ UNITED STATES OF AMERICA
+ Before the
+   SECURITIES AND EXCHANGE COMMISSION
+SECURITIES EXCHANGE ACT OF 1934
+Release No.  53636 / April 12, 2006
+ACCOUNTING AND AUDITING ENFORCEMENT
+Release No.  2412 / April 12, 2006
+ADMINISTRATIVE PROCEEDING
+File No.  3-12262
+     :
+ In the Matter of  : ORDE R INSTITUTING ADMINISTRATIVE
+     : PROCEEDINGS PURSUANT TO RULE
+ Michael D. Karsch,  : 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
+Michael D. Karsch (“Respondent” or “Karsch”) 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
+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 attorney . . . 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 jurisd iction over him and the subject matter of
+these proceedings, and the findings c ontained in Section III., Paragraph 3,  below, which are
+admitted, Respondent consents to the entry of th is Order Instituting Administrative Proceedings
+Pursuant to Rule 102(e) of the Commission’s Ru les 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. Karsch, age 45, is an attorney licensed to practice in Florida, Texas and New York.
+2. 2DoTrade was, at all relevant times, a Neva da corporation with its principal place of
+business in British Columbia, Canada, and London, England.  2DoTrade was purportedly engaged in
+an import/export business.  2DoTrade’s comm on stock was registered with the Commission
+pursuant to Section 12(g) of the Securities Exchange Act of 1934 (“Exchange Act”), and its shares
+were quoted on the OTC Bulletin Board.
+3. On September 30, 2003, the Commission filed a complaint against Karsch and
+others in SEC v. 2DoTrade, Inc., et al.  (Civil Action No. 3:03-CV-2246/NDTX).  On March 29,
+2006, the court entered an order permanently enjoining Karsch, by consent, from future
+violations of Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933, a nd Section 10(b) of the
+Exchange Act and Rule 10b-5 thereunder.  Karsch was ordered to pay $2,721 in disgorgement of
+ill-gotten gains from his sales of stock while pa rticipating in the fraud, and $238 in prejudgment
+interest.
+4. The Commission’s complaint alleged that certain defendants engaged in a “pump
+and dump” scheme designed to inflate 2DoTrade’s  stock price.  Between at least June and
+November 2001, the defendants, among other things , issued materially false and misleading
+press releases claiming that 2DoTrade had entered into several large international trading
+contracts and had developed an anti-anthrax compound.  During the same period, the defendants
+sold shares of 2DoTrade stock for illegal tradi ng profits of at least $1.8 million.  The complaint
+alleged further that Karsch assisted the defenda nts in perpetrating and executing the scheme, and
+that MCG Partners, Inc., of which Karsch was a director, sold shares of 2DoTrade for illegal
+trading profits.
+ 3
+IV.
+ In view of the foregoing, the Commission deem s it appropriate and in the public interest
+to impose the sanction agreed to in Respondent Karsch’s Offer.
+ Accordingly, it is hereby ORDERED, effectiv e immediately, that Karsch is suspended
+from appearing or practicing before the Commission as an attorney.
+ 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-2413.txt ADDED Viewed

	@@ -0,0 +1,1394 @@

+     SEC.gov | Thom A. Faria, Stephen J. McLaughlin and William M. Stickney
+         !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\/498841","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
+              Thom A. Faria, Stephen J. McLaughlin and William M. Stickney
+        Thom A. Faria, Stephen J. McLaughlin and William M. Stickney
+                   U.S. SECURITIES AND EXCHANGE COMMISSION
+ Litigation Release No. 19656 / April 13, 2006
+ Accounting and Auditing Release No. 2413 / April 13, 2006
+  SEC v. Thom A. Faria, Stephen J. McLaughlin and William M. Stickney , United States District Court for the District of Massachusetts, Civil Action No. 06-10657 -RCL
+ SEC Charges Three Former Officers of Metlife Inc. Subsidiary New England Financial With Fraudulent Scheme to Hide Expenses
+ The Commission filed a civil fraud action today in federal district court in Massachusetts against three former officers of New England Financial (NEF), an insurance company subsidiary of MetLife, Inc., for engaging in a scheme to improperly hide NEF expenses that led directly to the publication of materially false financial statements by MetLife and NEF. The three defendants are Thom A. Faria, of Needham, Massachusetts, the former president of the NEF distribution channel and senior vice president of MetLife, Stephen J. McLaughlin, of Plainville, Massachusetts, a former senior vice president of NEF, and William M. Stickney, of Hopkinton, Massachusetts, a former assistant regional vice president at NEF. Without admitting or denying the Commission's allegations, McLaughlin and Stickney each consented to the entry of final judgments enjoining them from future violations of the federal securities laws, ordering payment of disgorgement, prejudgment interest and civil penalties, and imposing a five year officer and director bar on McLaughlin.
+ The Commission's complaint alleges that over a period of years defendants engaged in a scheme to hide certain NEF expenses in an effort to make NEF appear more efficient than it actually was. The complaint alleges that defendants hid certain non-commission expenses by reclassifying them as commission expenses in NEF's internal books and records. According to the complaint, on more than one occasion McLaughlin and Stickney attempted to cover-up their reclassification activity, thereby hindering the ability of MetLife to discover the improper activity sooner. All told, the complaint alleges that the scheme resulted in the improper reclassification of over $100 million in NEF expenses, the direct result of which was the publication of materially false overstatements of MetLife and NEF net income in financial statements filed with the Commission.
+ The complaint alleges that through their fraudulent conduct, defendants violated 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 and 13b2-1 thereunder, and Section 34(b) of the Investment Company Act of 1940, as well as aided and abetted uncharged MetLife violations 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. The Complaint also alleges that Faria aided and abetted uncharged MetLife/NEF violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder.
+ Without admitting or denying the allegations of the complaint, McLaughlin and Stickney have consented to the entry of final judgments that (1) permanently enjoin them from future violations of Section 17(a) of the Securities Act, Sections 10(b) and 13(b)(5) of the Exchange Act and Rules 10b-5 and 13b2-1 thereunder, and Section 34(b) of the Investment Company Act, as well as from aiding and abetting 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, 13a-11 and 13a-13 thereunder; (2) require them to pay civil penalties of $30,000 and $15,000, respectively; (3) require them to disgorge $35,625 and $15,800, respectively, plus pre-judgment interest in the amount of $3,822.14 and $1,695.15, respectively; and (4) as to McLaughlin, bars him from serving as an officer and director of a public company for five years.
+ The Commission also announced today that it would not bring any enforcement action against MetLife or NEF because of MetLife's extensive cooperation in the Commission's investigation of the improper reclassifications that are the subject of the Commission's complaint. MetLife's cooperation consisted of prompt self-reporting, an independent internal investigation, sharing the results of that investigation with the government, disciplining responsible wrongdoers, and implementing new controls designed to prevent the recurrence of the improper conduct.
+ 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-2414.txt ADDED Viewed

	@@ -0,0 +1,1399 @@

+     SEC.gov | Tyco International Ltd.
+         !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\/498846","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
+              Tyco International Ltd.
+        Tyco International Ltd.
+                   U.S. SECURITIES AND EXCHANGE COMMISSION
+ Litigation Release No. 19657 / April  17, 2006
+ Accounting and Auditing Enforcement Release No. 2414 / April  17, 2006
+  SEC v. Tyco International Ltd. , 06 CV 2942  (S.D.N.Y. filed April 17, 2006)
+ SEC Brings Settled Charges Against Tyco International Ltd. Alleging Billion Dollar Accounting Fraud
+ The U.S. Securities and Exchange Commission today filed a settled civil injunctive action in the United States District Court for the Southern District of New York against Tyco International Ltd.  The Commission's complaint in that action alleges that, from 1996 through 2002, Tyco violated the federal securities laws by, among other things, utilizing various improper accounting practices and a scheme involving transactions with no economic substance to overstate its reported financial results by at least one billion dollars.
+ The Commission's complaint alleges that Tyco inflated its operating income by at least $500 million as a result of improper accounting practices related to some of the many acquisitions that Tyco engaged in during that time.  Tyco's improper acquisition accounting included undervaluing acquired assets, overvaluing acquired liabilities, and misusing accounting rules concerning the establishment and utilization of purchase accounting reserves.  The complaint further alleges that, apart from its acquisition activities, Tyco improperly established and used various kinds of reserves to make adjustments at the end of reporting periods to enhance and smooth its publicly reported results and to meet earnings forecasts.
+ The complaint alleges that Tyco inflated its operating income by $567 million from its fiscal year 1998 through its fiscal quarter ended December 31, 2002, by means of connection fees that Tyco's ADT Security Services, Inc. subsidiary charged to dealers from whom it purchased security monitoring contracts.  Because the connection fee was fully offset by a simultaneous increase in the purchase price ADT allocated to the dealers' security monitoring contracts, the connection fee transaction lacked economic substance and should not have been recorded in Tyco's income statement.  In 2003, Tyco restated its operating income and cash flow relating to the connection fees.
+ The complaint further alleges that, from September 1996 through early 2002, Tyco failed to disclose in its proxy statements and annual reports certain executive compensation, executive indebtedness, and related party transactions of its former senior management.  Tyco also incorrectly accounted for certain executive bonuses it paid in its fiscal years 2000 and 2001, thereby excluding from its operating expenses the costs associated with those bonuses.  Finally, the complaint alleges that Tyco violated the antibribery provisions of the Foreign Corrupt Practices Act when employees or agents of its Earth Tech Brasil Ltda. subsidiary made payments to Brazilian officials for the purpose of obtaining or retaining business for Tyco.
+ Between 1996 and 2002, as a result of these various practices, Tyco made false and misleading statements or omissions in its filings with the Commission and its public statements to investors and analysts.
+ Without admitting or denying the allegations in the Commission's complaint, Tyco has consented to the entry of a final judgment permanently enjoining it from violating Section 17(a) of the Securities Act of 1933, Sections 10(b), 13(a), 13(b)(2)(A), 13(b)(2)(B), 14(a), and 30A(a) of the Securities Exchange Act of 1934, and Exchange Act Rules 10b-5, 12b-20, 13a-1, 13a-13, 13b2-1, and 14a-9.  The proposed final judgment also orders Tyco to pay $1 in disgorgement and a $50 million civil penalty.
+ The Commission's investigation is continuing with respect to individuals.  The Commission acknowledges the assistance and cooperation of the Manhattan District Attorney and the New York City Police Department.
+ See  Litigation Release No. 17722  / September 12, 2002;  Litigation Release No. 17896  / December 17, 2002;  Exchange Act Release No. 48328  / August 13, 2003.
+   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-2415.pdf ADDED Viewed

Binary file (42.8 kB). View file

raw/aaer/2006/AAER-2415.txt ADDED Viewed

	@@ -0,0 +1,156 @@

+ UNITED STATES OF AMERICA
+ before the
+ SECURITIES AND EXCHANGE COMMISSION
+SECURITIES EXCHANGE ACT OF 1934
+Release No.  53661 / April 17, 2006
+ACCOUNTING AND AUDITING ENFORCEMENT
+Release No.  2415 / April 17, 2006
+ADMINISTRATIVE PROCEEDING
+File No. 3-12263
+      :
+ :
+ :
+In the Matter of : ORDER INSTITUTING ADMINISTRATIVE
+      : PROCEEDINGS PURSUANT TO RULE
+  DAVID T. LEBOE, 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 David
+T. Leboe (“Respondent” or “Leboe”) 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.
+ 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 findings contained in Section III 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 Co mmission finds that:
+ 1. David T. Leboe, age 38, is and ha s been a certified public accountant
+licensed to practice in the State of Texas.  He served as an accountant in Enron North America
+(ENA), a business unit of Enron Corp. (Enron), from 1997 until 2001.
+ 2. Enron was, at all relevant times, an Oregon corporation with its principal
+place of business in Houston, Texas.  Until its bankruptcy filing in December 2001, Enron was the
+seventh largest corporation in the United States based on reported revenue.  In the previous ten
+years, Enron had evolved from a regional natural gas provider to a commodity trader of natural
+gas, electricity, and other physical commodities with retail operations in energy and other products.
+The Company also created and traded financial products.  ENA was Enron’s largest and most
+profitable business unit and included Enron’s wholesale merchant business related to natural gas
+and power across North America, including trading, marketing and new asset development
+activities in that region.  At all relevant times, the common stock of Enron 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.
+ 3. On March 27, 2006, the Commission filed a complaint against Leboe in
+Securities and Exchange Commission v. David T. Leboe and Dale G. Rasmussen, Civil Action No.
+H-06-1020 (S.D. Tex.).  On March 28, 2006, the court entered a final judgment permanently
+enjoining Leboe, by consent, 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 thereunder.
+Leboe was also ordered to pay $1 in disgorgement and a $30,000 civil money penalty.
+   4. The Commission’s complaint alle ged, among other things, that Leboe
+engaged in a fraudulent scheme which resulted in Enron filing materially false and misleading
+financial statements in the company’s annual report on Form 10-K for the fiscal year ended
+December 31, 2000, and in the company’s quarterly report on Form 10-Q for the third quarter of
+fiscal year 2000.  The Complaint alleged that Leboe engaged in a number of improper
+accounting practices that materially increased Enron’s annual and quarterly revenue and net
+income in a departure from generally accepted accounting principles.  These practices included,
+among other things, improperly accelerating the recognition of revenue from the sale of a
+construction contract, and concealing undocumented side agreements from Enron’s independent
+ 3
+auditors.  In addition, the complaint alleged that Leboe actively sought to keep others from
+disclosing information to Enron’s independent auditors about these side agreements.
+IV.
+ In view of the foregoing, the Commission deems it appropriate and in the public interest to
+impose the sanction agreed to in Respondent Leboe’s Offer.
+ Accordingly, it is hereby ORDERED, effective immediately, that:
+ A. Leboe is suspended from appearing or practicing before the Commission as an
+accountant.
+ B. After five years from the date of th is 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 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-2416.txt ADDED Viewed

	@@ -0,0 +1,120 @@

+ UNITED STATES OF AMERICA
+ before the
+ SECURITIES AND EXCHANGE COMMISSION
+SECURITIES EXCHANGE ACT OF 1934
+Release No.  53662 / April 17, 2006
+ACCOUNTING AND AUDITING ENFORCEMENT
+Release No.  2416 / April 17, 2006
+ADMINISTRATIVE PROCEEDING
+File No. 3-12264
+      :
+ :
+ :
+In the Matter of : ORDER INSTITUTING ADMINISTRATIVE
+      : PROCEEDINGS PURSUANT TO RULE
+  DALE G. RASMUSSEN,  ESQ., : 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 Dale G.
+Rasmussen (“Respondent” or “Rasmussen”) 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 . . . attorney . . . 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 findings contained in Section III 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 Co mmission finds that:
+ 1. Dale G. Rasmussen, age 46, is and ha s been an attorney licensed to practice
+in the State of Oregon.  He served as a Senior Counsel in Enron North America’s (ENA) West
+Power Origination Legal Group, a business unit of Enron Corp. (Enron), from October 1997 until
+February 2002.
+ 2. Enron was, at all relevant times, an Oregon corporation with its principal
+place of business in Houston, Texas.  Until its bankruptcy filing in December 2001, Enron was the
+seventh largest corporation in the United States based on reported revenue.  In the previous ten
+years, Enron had evolved from a regional natural gas provider to a commodity trader of natural
+gas, electricity, and other physical commodities with retail operations in energy and other products.
+The Company also created and traded financial products.  ENA was Enron’s largest and most
+profitable business unit and included Enron’s wholesale merchant business related to natural gas
+and power across North America, including trading, marketing and new asset development
+activities in that region.  At all relevant times, the common stock of Enron 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.
+ 3. On March 27, 2006, the Commission filed a complaint against Rasmussen
+in Securities and Exchange Commission v. David T. Leboe and Dale G. Rasmussen, Civil Action
+No. H-06-1020 (S.D. Tex.).  On March 28, 2006, the court entered a final judgment permanently
+enjoining Rasmussen, by consent, 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 thereunder.  Rasmussen was also ordered to pay $1 in disgorgement and a $30,000 civil
+money penalty.
+ 4. The Commission’s complaint alleged,  among other things, that Rasmussen
+engaged in a fraudulent scheme to improperly accelerate the recognition of revenue from the sale
+of a construction contract which resulted in Enron filing materially false and misleading financial
+statements in the company’s annual report on Form 10-K for the fiscal year ended December 31,
+2000, and in the company’s quarterly report on Form 10-Q for the third quarter of fiscal year
+2000.  The Complaint alleged that Rasmussen, the primary Enron in-house attorney working on
+the sale, negotiated various terms of the transaction and drafted several of the key documents.
+ 3
+While doing this, he worked closely with Enron’s accountants to ensure that the wording in the
+legal documents did not jeopardize ENA’s efforts to circumvent Generally Accepted Accounting
+Principles.  In addition, the complaint alleged that Rasmussen knew that undocumented side
+agreements relating to the sale were being concealed from Enron’s independent auditors and that
+he actively sought to keep others from disclosing information to the auditors about these side
+agreements.
+IV.
+ In view of the foregoing, the Commission deems it appropriate and in the public interest to
+impose the sanction agreed to in Respondent Rasmussen’s Offer.
+ Accordingly, IT IS HEREBY ORDERED, effective immediately, that Rasmussen is
+suspended from appearing or practicing before the Commission as an attorney for three years.
+Furthermore, before appearing and resuming practice before the Commission, Rasmussen must
+submit an affidavit to the Commission’s Office of the General Counsel truthfully stating, under
+penalty of perjury, that he has complied with this Order, that he is not subject to any suspension or
+disbarment as an attorney by a court of the United States or of any state, territory, district,
+commonwealth, or possession, and that he has not been convicted of a felony or misdemeanor
+involving moral turpitude as set forth in Rule 102(e)(2) of the Commission’s Rules of Practice.
+ 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-2418.txt ADDED Viewed

	@@ -0,0 +1,166 @@

+ UNITED STATES OF AMERICA
+ Before the
+ SECURITIES AND EXCHANGE COMMISSION
+SECURITIES EXCHANGE ACT OF 1934
+Release No.  53717 / April 25, 2006
+ACCOUNTING AND AUDITING ENFORCEMENT
+Release No.  2418 / April 25, 2006
+ADMINISTRATIVE PROCEEDING
+File No.   3-12273
+In the Matter of
+ALLEN BUNTIN,
+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 Allen Buntin (“Buntin” 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 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.
+Allen Buntin, age 53, is a resident of Michigan.  From May 1992 through October 2001, he
+was the Business Unit Controller for Hayes’ North American Fabricated/Cast Wheel Group
+(“FWG”), which was a part of Hayes’ North American Wheel Group (“NAWG”).  Buntin’s
+responsibilities as the Business Unit Controller involved ensuring that the FWG’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 discounts 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 FWG Business Unit Controller, Buntin 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.  Buntin was responsible for
+reconciling various income statements and balance sheet accounts.  Specifically, Buntin knew that
+in 1999, 2000, and the first quarter of 2001, approximately $.75 million, $1.9 million, and $1.8
+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
+million respectively of excessive operating expenses (such as utility costs, freight, and machine
+repairs) were improperly deferred to FWG plant balance sheet accounts.  Beginning in May 2000,
+Buntin directed at least one FWG plant to meet its earnings targets by deferring expenses to
+specific plant balance sheet accounts at almost every month-end.  He also periodically made the
+expense deferrals at the FWG business unit level.  Also, Buntin knew that the FWG business unit
+inappropriately deferred approximately $5.1 million of operating expenses in 1999, $5.6 million in
+2000 and an additional $1.1 million by the close of the first quarter of 2001.  Buntin knew that by
+deferring operating expenses, the FWG improperly inflated net income.  In 2000, Buntin failed to
+adequately accrue customer discounts on FWG financial statements, causing the FWG’s net sales
+to be overstated.  Buntin knew that failing to adequately accrue these discounts resulted in false
+entries on FWG’s balance sheet and income statements.  Additionally, Buntin knew that at both the
+plant and business unit level of FWG, fringe benefit liabilities were purposefully understated in
+Hayes’ books and records.
+B.  Legal Analysis
+As a result of the conduct described above, Buntin 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 under the
+Exchange Act prohibits the falsification of any book, record, or account subject to Section
+13(b)(2)(A) of the Exchange Act.
+   As FWG Business Unit Controller, Buntin 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.
+Buntin 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 FWG Business Unit Controller, Buntin knew  that the inappropriate accounting entries
+he and others made at the FWG plants would be included in Hayes’ books, records, and financial
+ 4
+results.  Buntin therefore caused Hayes’ books and records to contain inaccurate and incomplete
+descriptions of the accounting entries, which prevented Hayes from preparing financial statements
+in conformity with GAAP.  Such conduct violated Section 13(b)(5) of the Exchange Act and
+caused Hayes’ violation of 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, Buntin caused Hayes to file inaccurate quarterly and annual reports with the
+Commission.  Accordingly, Buntin 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 Buntin’s Offer.
+ Accordingly, it is hereby ORDERED that Respondent Allen Buntin 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-2419.txt ADDED Viewed

	@@ -0,0 +1,164 @@

+ UNITED STATES OF AMERICA
+ Before the
+ SECURITIES AND EXCHANGE COMMISSION
+SECURITIES EXCHANGE ACT OF 1934
+Release No.  53718 / April 25, 2006
+ACCOUNTING AND AUDITING ENFORCEMENT
+Release No.  2419 / April 25, 2006
+ADMINISTRATIVE PROCEEDING
+File No.  3-12274
+In the Matter of
+GREG JONES,
+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 Greg Jones (“Jones” 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.
+Greg Jones, age 52, is a resident of Georgia.  From 1997 through August 2000, 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”).  Jones’ responsibilities as the
+Business Unit Controller included ensuring that AWG’s books and records complied with
+Generally Accepted Accounting Principles (“GAAP”) and Hayes’ internal accounting policies.
+From August 2000 through May 2003, Jones was a plant manager for the Gainesville, Georgia
+AWG manufacturing plant.  Although Jones did not have formal accounting or finance
+responsibilities in that position, he was aware of various accounting entries that were made.
+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 discounts 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 Business Unit Controller of AWG, Jones was responsible for reconciling various
+income statements and balance sheet accounts and directed, ratified or knew that false entries were
+being made to Hayes’ books and records and were included in Hayes’ financial statements.
+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
+Specifically, Jones knew that certain AWG plants were not adequately recording payroll and
+employee benefit accruals to achieve internal earnings targets.  In addition, Jones knew that one
+AWG plant had stopped recording supply invoices to achieve internal earnings targets.
+ As an AWG plant manager, Jones also kne w of -- but took no steps to correct --
+inappropriate accounting entries that were made at his plant.  For example, in October 2000, Jones
+knew that his plant inappropriately deferred $1.2 million of tooling expenses to a balance sheet
+account.  Also, in late 2000 and early 2001, Jones knew that his plant had improperly deferred
+approximately $295,000 of operating expenses to a balance sheet account.  Finally, in March 2001,
+Jones knew that his plant had inappropriately deferred approximately $230,000 of operating
+expenses to a balance sheet account at the direction of an AWG vice president, to help another
+plant achieve its earning targets for a particular quarter.  Jones knew that these entries were false.
+B.  Legal Analysis
+As a result of the conduct described above, Jones 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 under the
+Exchange Act 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 and as an AWG plant manager, Jones 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.  Jones 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 and as an AWG plant manager, Jones knew that the
+inappropriate accounting entries he and others made at the AWG plants would be included in
+Hayes’ books, records, and financial results.  Jones therefore caused Hayes’ books and records to
+ 4
+contain inaccurate and incomplete descriptions of the accounting entries, which prevented Hayes
+from preparing financial statements in conformity with GAAP.  By engaging in such conduct,
+Jones violated Section 13(b)(5) of the Exchange Act and caused Hayes’ violation of 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, Jones caused Hayes to file inaccurate quarterly and annual reports with the
+Commission.  Accordingly, Jones 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 Jones’ Offer.
+ Accordingly, it is hereby ORDERED that Respondent Greg Jones 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-2422.txt ADDED Viewed

	@@ -0,0 +1,1391 @@

+     SEC.gov | Ingles Markets Incorporated
+         !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\/498926","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
+              Ingles Markets Incorporated
+        Ingles Markets Incorporated
+                   U.S. SECURITIES AND EXCHANGE COMMISSION
+ Litigation Release No. 19673 / April 27, 2006
+ Accounting and Auditing Enforcement Release No. 2422 / April 27, 2006
+  SEC v. Ingles Markets Incorporated , Civil Action No. 1:06cv136 (W.D.N.C., filed on April 27, 2006)
+ SEC Settles Accounting Fraud Claims With Ingles Markets
+ The Securities and Exchange Commission today announced it has filed settled accounting fraud charges against Ingles Markets Incorporated, a regional supermarket chain headquartered in Asheville, North Carolina. The Commission's complaint, filed in the Western District of North Carolina, alleges that Ingles' former officer and director, Anthony Federico (now deceased), provided false information to the company's accounting department in 2002 and 2003.
+ From his office near Atlanta, Federico negotiated refundable, upfront payments with vendors worth millions of dollars at or after the end of certain quarters. The Commission alleges that Federico drafted forms to make it look like the money was nonrefundable and for past performance and signed at least two side letters that he did not provide to Ingles' accounting department. Taken by itself, Federico's misconduct accounted for more than half of the pretax income reported in quarterly reports filed in May 2002 and February 2003 and material amounts of pretax income in annual reports filed in December 2002 and 2003. The Commission alleges that Federico was able to do this in large part because Ingles had no meaningful controls over the recognition of income from upfront vendor payments during the relevant period. Ingles restated its financial statements in February 2005 to correct these and other accounting errors, and implemented internal controls to properly account for upfront vendor payments.
+ Without admitting or denying the allegations, Ingles consented to the imposition of a court order prohibiting further violations of Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)]; Section 10(b) of the Securities Exchange Act of 1934 (the "Exchange Act") [15 U.S.C. § 78j(b)] and Rule 10b-5 promulgated thereunder [17 C.F.R. § 240.10b-5]; .and Section 13(a) of the Exchange Act [15 U.S.C. Section 78(m)(a)] and Rules 13a-1, 13a-13, and 12b-20 [17 C.F.R. Sections 240.13a-1, 240.13a-13 and 240.12b-20] promulgated thereunder.
+ The Commission has brought several other vendor allowance cases in recent years, including cases involving Kmart, Fleming and Royal Ahold. See  SEC v. Orr  [ LR-18989 ] (Dec. 2, 2004);  SEC v. Levine  [ LR-19353 ] (Aug. 30, 2005);  SEC v. Dean Foods  [ LR-18884 ) (Sept. 14, 2004);  SEC v. Shapiro  [ LR-19380 ] (Sept. 15, 2005);  SEC v. Bailin  [ LR-19034 ] (June 13, 2005); and  SEC v. Resnick  [ LR-19031 ] (June 11, 2005).
+   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-2427.txt ADDED Viewed

	@@ -0,0 +1,278 @@

+ UNITED STATES OF AMERICA
+ Before the
+ SECURITIES AND EXCHANGE COMMISSION
+SECURITIES EXCHANGE ACT OF 1934
+Release No. 53766 / May 8, 2006
+ACCOUNTING AND AUDITING ENFORCEMENT
+Release No. 2427 / May 8, 2006
+ADMINISTRATIVE PROCEEDING
+File No. 3-12289
+_______________________________
+     :
+     :  ORDER INSTITUTING PUBLIC
+     :   ADMINISTRATIVE AND CEASE-
+In the Matter of :  AND-DESIST PROC EEDINGS PURSUANT
+  : TO SECTION 21 C OF THE SECURITIES
+JAMES R. AHRNS, JR., CPA,          : EXCHANGE ACT OF 1934  AND RULE 102(e) OF
+  : THE COMMISSION’S RULES OF PRACTICE,
+ Respondent : MAKING FINDINGS, AND IMPOSING
+  : REMEDIAL SANCTIO NS AND A CEASE-AND-
+  : DESIST ORDER
+                                                               :
+I.
+ The Securities and Exchange Commission (“Commission”) deems it appropriate that public
+administrative and cease-and-desist proceedings be, and hereby are, instituted against James R.
+Ahrns, Jr., CPA (“Respondent” or “Ahrns”) pursuant to Section 21C of the Securities Exchange
+Act of 1934 (“Exchange Act”) and Rule 102(e)(1)(iii) 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
+1 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, or willfully aided and abetted the violation of any
+provision of the Federal securities laws or the rules and regulations thereunder.
+ 2
+proceedings, Respondent consents to the entry of this Order Instituting Public Administrative and
+Cease-and-Desist Proceedings Pursuant to 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 (“Order”), as set forth below.
+III.
+ On the basis of this Order and Res pondent’s Offer, the Commission finds2 that:
+A. RESPONDENT
+ Ahrns has been a certified public accountant licen sed in the state of Ohio since 1985.  From
+1999 through early 2004, Ahrns was the controller of MCSi, Inc. (“MCSi”), a Maryland
+corporation headquartered in Dayton, Ohio.  In his capacity as controller, Ahrns made accounting
+entries on the books and records of MCSi, and also provided documents and information to its
+auditor in connection with its annual audits of the financial statements of MCSi.  Ahrns reported to
+the company’s chief financial officer.
+B. FACTS
+ 1. Background
+ MCSi is a publicly-traded company whose st ock is currently quoted in the “pink sheets”
+centralized quotation service for over-the-counter securities.  However, at all times relevant to the
+matters described herein the stock of MCSi was quoted on the NASDAQ National Market System.
+MCSi sold and installed audio-visual presentation and broadcast integrated systems, as well as
+computer products.  For the year ended December 31, 2001, MCSi reported net sales of over $800
+million.  In June 2003, the company filed a voluntary petition for reorganization under Chapter 11
+of the United States Bankruptcy Code.
+ 2. MCSi’s accounting system.
+  a. MCSi used a system called JD Edwards as its accounting software.  When a
+sales transaction was input into JD Edwards, the system automatically generated documents such as
+invoices and packing lists, and recorded the appropriate accounting transactions on the books and
+records of the company.  Non-recurring, less routine transactions, however, had to be entered into
+JD Edwards manually.
+  b. At MCSi, journal entries for thes e non-recurring transactions were first
+handwritten on sheets headed “journal voucher.”  These manual journal voucher sheets were placed
+in three-ring binders, together with any relevant backup documentation, and were maintained in
+Ahrns’ office.  The transactions shown on the journal vouchers were then entered into JD Edwards.
+Some of these transactions were entered into the system by Ahrns.
+2  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
+  c. MCSi’s CFO was not familiar enough with JD Edwards to enter accounting
+transactions into the system himself.  Therefore, he gave Ahrns handwritten journal entry sheets
+reflecting transactions he wished Ahrns to enter into the books and records of the company.  On
+other occasions the CFO simply instructed Ahrns orally which journal entries to record.
+  d. During the first quarter of 2002, the CFO gave Ahrns several journal
+vouchers which the CFO had completed himself, and instructed Ahrns to enter those transactions
+into the JD Edwards accounting system.  These journal vouchers had no backup documentation
+attached, and did not reference any customer.  The entries they contained were headed “major
+projects” and “major projects 2.”  The CFO did not explain to Ahrns what transactions were
+referenced by these journal vouchers.
+ 3. Concealment of company records from the auditors.
+  a. MCSi’s CFO had in structed Ahrns not to provide the manual journal
+vouchers to the company’s auditors, even if the auditors requested them specifically, without his
+prior approval.  During the audit of MCSi’s financial statements for the 2000 year, however, the
+auditors asked to see the binder of journal vouchers.  When Ahrns informed the CFO of this
+request, the CFO directed Ahrns to hand him the binder.  The CFO removed some of the journal
+vouchers from the binder and placed them in his desk drawer.  He then told Ahrns to give the
+binder to the auditors.
+  b. The CFO removed journal vouchers  from the books and records of MCSi
+on more than one occasion during the audits of MCSi’s financial statements for the years ended
+2000 through 2002.  Among the vouchers that were removed, and concealed from the auditors,
+were those relating to “major projects” and “major projects 2.”  These two entries added
+$30,203,901 to the revenue MCSi reported for the quarter ended March 31, 2002, with
+$16,432,341 being charged to cost of goods sold, for an increase in net income of $13,771,560 for
+the quarter.  The effect of these entries was to change what would have been a net loss of
+$7,293,112 to net income of $6,478,448.
+  c. The inflated revenue caused the financial statements of MCSi, for the
+quarter ended March 31, 2002, to fail to comport with generally accepted accounting principles.
+ 4. Ahrns signed the management rep resentation letters to the auditors.
+  a. For each audit of MCSi’s financial statements from the 2000 year through
+the 2001 year, both the CFO and Ahrns signed the management representation letter to the auditor.
+In this letter, MCSi’s management was asked to confirm to the auditor that:
+i. all financial records and related data had been made available to them;
+ii. there were no material transactions, agreements or accounts that had not
+been properly recorded in the company’s books and records; and
+ 4
+iii. there had been no fraud involving  management or employees having
+significant roles in the company’s internal control.
+  b. Ahrns had concerns regarding certa in manual journal entries on the books
+of the company because the CFO had never provided him with any backup documentation.  He
+also knew that manual journal vouchers had been concealed from the auditors, denying them
+access to certain financial records and related data of MCSi.  Nevertheless, both the CFO and
+Ahrns signed the management representation letters for the audits of the company’s financial
+statements for the years ended 2000 through 2001.
+C. VIOLATIONS
+ 1. Aiding and abetting liabil ity arises when there is: (a) a violation of the securities
+laws by some other party; (b) a general awareness by the aider and abetter that his role is part of an
+overall activity that was improper; and (c) substantial assistance by the aider and abetter in the
+achievement of the primary violation.  Either willfulness or "reckless indifference (to a known
+obligation or set of facts)" will satisfy the scienter requirement.
+ 2.  Section 13(a) of the Exchange Act an d Rules 13a-1 and 13a-13 thereunder require
+issuers with securities registered under Section 12 of the Exchange Act to file quarterly and annual
+reports with the Commission and to keep this information current. The obligation to file such
+reports embodies the requirement that they be true and correct.
+ 3. Rule 12b-20 provides that, in addition to  information specifically required to be
+included in reports, registrants are obligated to include any material information necessary to make
+the statements made in the reports not misleading.
+ 4. Section 13(b)(2)(A) of the Exchange Act requires every issuer that has a class of
+securities registered pursuant to Section 12 of the Exchange Act 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. . . ."  Rule 13b2-1 generally prohibits the falsification of
+books and records.
+ 5. Ahrns rendered substantial assistance  to MCSi in its primary violations of
+Sections 13(a) and 13(b)(2)(A) and Rules 12b-20, 13a-1 and 13a-13 thereunder, and to MCSi’s
+CFO in his primary violations of Rule 13b2-2.  Not informing the auditors that the CFO had
+removed manual journal vouchers from the company's books, and signing the management
+representation letter made it more difficult to discover the fraudulent revenue the CFO had
+recorded.  This fraudulent revenue rendered the books and records of MCSi, and its public filings
+with the Commission, materially false.  Ahrns, as a CPA and the company controller, knew that he
+was involved in an activity that was improper.
+ 5
+6. By making journal entries at the direction of the CF O, when he knew or should
+have known that those entries did not properly reflect company transactions, Ahrns violated Rule
+13b2-1.
+ 7. Rule 13b2-2, as in effect at the time of the conduct described herein, states that ”no
+officer or director of an issuer shall, directly or indirectly . . . omit to state, or cause another person
+to omit to state, any material fact necessary in order to make statements made, in light of the
+circumstances under which such statements were made, not misleading, to an accountant in
+connection with any audit, review or examination of the financial statements of the issuer. . . .” 3
+ 8. By providing the manual journal voucher s to the auditors without disclosing that
+certain of them had been removed, and by signing the management representation letter, the CFO
+omitted to state a material fact to an accountant in connection with an audit.  Ahrns aided and
+abetted these violations of Rule 13b2-2.
+D. COOPERATION
+ Ahrns has rendered substantial assistance to th e staff in its investigation of MCSi and its
+officers.
+E. FINDINGS
+ Based on the foregoing, the Commission finds that Ahrns (a) willfully violated Rule
+13b2-1 promulgated under the Exchange Act; and (b) willfully aided and abetted and caused
+MCSi’s violations of Sections 13(a) and 13(b)(2)(A) of the Exchange Act and Rules 12b-20, 13a-1
+and 13a-13, and the CFO’s violations of Rule 13b2-2  thereunder.  As a consequence of these
+willful violations, and by aiding and abetting others in their violations of the federal securities laws,
+Ahrns should be sanctioned under Rule 102(e)(1)(iii) of the Commission’s Rules of Practice.
+IV.
+ In view of the foregoing, the Commission deems it appropriate to impose the sanction and
+cease-and-desist order agreed to in Respondent’s Offer.
+ Accordingly, it is hereby ORDERED, effective immediately, that:
+ A. Ahrns shall cease and desist from co mmitting or causing any violations and any
+future violations of Rules 13b2-1 and 13b2-2 promulgated under the Exchange Act, and from
+causing any violations and any future violations of Sections 13(a) and 13(b)(2)(A) of the Exchange
+Act and Rules 12b-20, 13a-1 and 13a-13 thereunder.
+ B. Ahrns is denied the privilege of appe aring or practicing before the Commission as
+an accountant.
+3 Rule 13b2-2 has since been amended by the Sarbanes-Oxley Act of 2002.
+ 6
+ C. After two years from the date of this order, Ahrns 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 Ahrns’ 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) Ahrns, or the public acc ounting 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) Ahrns, or the registered pub lic 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 his or the firm’s quality control system that would indicate that he will not
+receive appropriate supervision;
+   (c) Ahrns has resolved all discip linary 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) Ahrns acknowledges his res ponsibility, as long as he 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.
+D. The Commission will consid er an application by Ahrns 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 his 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-2428.pdf ADDED Viewed

Binary file (38.1 kB). View file

raw/aaer/2006/AAER-2428.txt ADDED Viewed

	@@ -0,0 +1,125 @@

+ UNITED STATES OF AMERICA
+ before the
+ SECURITIES AND EXCHANGE COMMISSION
+SECURITIES EXCHANGE ACT OF 1934
+Release No.  53803 / May 15, 2006
+ACCOUNTING AND AUDITING ENFORCEMENT
+Release No.  2428 / May 15, 2006
+ADMINISTRATIVE PROCEEDING
+File No.   3-12296
+_________________________________
+         :
+         : ORDER INSTITUTING
+ In the Matter of         :    ADMINISTRATIVE
+              : PROCEEDINGS PURSUANT TO
+  BARRY F. DUGGAN, CGA (Canad a),  : RULE 102(e) OF THE
+                              : COMMISSION’S RULES OF
+    Respondent.                             : 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 Barry F.
+Duggan, CGA (Canada) (“Respondent” or “Duggan”) 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.
+ 2
+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.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 Responde nt’s Offer, the Commission finds that:
+ 1. Duggan, age 61, is and has been a certified general accountant (“CGA”) in
+Canada.  He served as CEO and a director of Exotics.com, Inc., a Delaware corporation (“Exotics-
+Delaware”) and the sole operating subsidiary of Exotics.com, Inc., a Nevada corporation (“Exotics-
+Nevada”), from September 2001 until his resignation in August 2002.
+ 2. Exotics-Nevada was, at all relevant  times, a Nevada corporation with its
+principal place of business in Vancouver, British Columbia, Canada.  Through its Exotics-Delaware
+subsidiary, Exotics-Nevada was engaged in the business of owning, operating and licensing adult
+Web sites.  At all relevant times, Exotics-Nevada’s common stock was registered with the
+Commission pursuant to Section 12(g) of the Securities Exchange Act of 1934 (“Exchange Act”).
+From December 2000 to May 2002, its stock was quoted on the OTC Bulletin Board.
+ 3. On April 25, 2005, the Commission f iled a complaint against Duggan in
+SEC v. Exotics.com, Inc., et al. (Civil Action No. CV-S-05-0531-PMP-(GWF)).  On April 20,
+2006, the court entered an order permanently enjoining Duggan, by consent, from future violations
+of Sections 10(b) and 13(b)(5) of the Exchange Act and Rule 10b-5 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 and 13a-13 thereunder.  Duggan was also ordered to pay a $25,000 civil money penalty and
+was barred from serving as an officer or director of any issuer that has a class of securities
+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 and was barred from participating in any offering of penny
+stock, including engaging in activities with a broker, dealer, or issuer for purposes of issuing,
+trading, or inducing or attempting to induce the purchase or sale of any penny stock.
+ 4. The Commission’s complaint alleged th at Duggan participated in an accounting
+fraud and stock manipulation scheme involving Exotics-Nevada stock that occurred during 1999
+through 2002.  According to the complaint, the fraudulent scheme resulted in Exotics-Nevada
+filing with the Commission an annual report on Form 10-KSB for the fiscal year ended December
+31, 2001 (“2001 Form 10-KSB”), and a quarterly report on Form 10-QSB for the third quarter of
+ 3
+fiscal year 2001 (“2001 Third Quarter Form 10-QSB”) that contained materially false and
+misleading statements.  The complaint alleged that Duggan knowingly and substantially assisted
+Exotics-Nevada in filing the false and misleading reports with the Commission and that, while
+serving as the CEO and a director of Exotics-Nevada’s sole operating subsidiary, he approved the
+reporting of $3.6 million of goodwill in the company’s financial statements contained in its 2001
+Third Quarter Form 10-QSB.  The transaction resulted in an overstatement of Exotics-Nevada’s
+assets by approximately 627%.  The complaint also alleged that Duggan knowingly failed to
+implement a system of internal accounting controls and was responsible for Exotics-Nevada
+having inadequate books and records, which led to the company filing false and misleading
+Commission reports.  In addition, the complaint alleged that, in December 2001, Duggan
+reviewed and approved drafts of fax and e-mail spam messages that Exotics-Nevada arranged to
+have disseminated to potential investors and which contained misleading financial information
+regarding Exotics-Nevada.
+IV.
+ In view of the foregoing, the Commission deems it appropriate and in the public interest to
+impose the sanction agreed to in Respondent Duggan’s Offer.
+ Accordingly, it is hereby ORDERED, effective immediately, that:
+ Duggan is suspended from appearing or  practicing before the Commission as an
+accountant.
+ By the Commission.
+       N a n c y  M .  M o r r i s
+       S e c r e t a r y