Texas-Based Accountant Pleads Guilty to Lying to SEC Investigators

The SEC announced that a Texas-based former audit partner at accounting and consulting firm BDO USA LLP has pled guilty to criminal charges for lying to SEC enforcement staff during investigative testimony. Last year the SEC issued subpoenas to BDO and the accountant who was responsible for auditing several hedge funds managed by an investment adviser that the SEC is investigating. The criminal information states that the audit is a central issue in the SEC inquiry, and investigators took testimony from the accountant to obtain information about his role in the audit process and assess his credibility. He was the subject of a 2005 NASD (now FINRA) proceeding alleging that he took $49,350 in funds from a former employer for his personal use.

The criminal information alleges that during questioning in September 2011, the Texas-based accountant falsely testified to SEC staff that he was not aware of a $49,350 payment made on his behalf to his former employer. In fact, hewas aware that his attorney had repaid the $49,350 to the former employer as reimbursement of the funds he had allegedly taken for his personal use. The payment was made at the accountant’s direction and with his funds.

Texas-Based Accountant Pleads Guilty to Lying to SEC Investigators

Judge Orders Plastics Executive to Pay $49.5 Million in SEC Case

The SEC has announced the successful resolution of its trial against a plastics industry executive charged with lying in SEC filings regarding his ownership of Musicland Stores Corporation stock. The executive and a trust he controlled have been ordered by a federal judge to pay $49.5 million in a final judgment against them. The executive failed to file truthful 13D forms and neglected to make other required filings, which are required when a person acquires beneficial ownership of more than 5 percent of a voting class of a company's publicly traded stock. Because of this the execute and the trust thereby materially misrepresented their ownership of Musicland stock.

Following a 10-day trial in May in federal court in Newark, N.J., a jury returned a verdict finding the executive liable for securities fraud and disclosure violations on all counts against him. The jury also found the MAAA Trust controlled by him liable for disclosure violations.

Judge Orders Plastics Executive to Pay $49.5 Million in SEC Case