Rich and Wealth

Application Examples (2)

The SEC maintained that the manner in which these transactions were accounted for was in violation of Section 13(a), the periodic reporting provision, Section 13(b)(2)(A), the books and records provision, and Section 13(b)(2)(B), the internal control provision, of the 1934 Act.

The SEC also alleged that FastComm and DesLaurier were in violation of Section 10(b), an antifraud provision of the 1934 Act. According to the SEC, the company’s actions were done with scienter, and accordingly, the Commission brought the allegation of fraud.

FastComm and DesLaurier consented, without admitting or denying the Commission’s allegations, to the entry of final judgments against them. The Company was enjoined from future violations of Section 10(b), Section 13(a), Section 13(b)(2)(A), and Section 13(b)(2)(B) of the 1934 Act. Given that the Company was recently emerging from a reorganization proceeding, it was not required to pay a civil penalty. DesLaurier was permanently enjoined from future violations of Section 10(b) of the 1934 Act
and from aiding and abetting violations of Section 13(a) and Rules 12b-20, 13a-1, and 13a-13, also of the 1934 Act. He was also ordered to pay a civil penalty of $20,000.

System Software Associates, Inc. In an AAER filed in July 2000, the SEC charged System Software Associates, Inc., its former CEO and chairman of the board, Roger Covey, and its former CFO Joseph Skadra with “fraudulent accounting practices that resulted in massive investor losses.”57

Taken From : The Financial Numbers Game