From today's SEC Digest: C. WILLIAM COX, FORMER PRESIDENT OF PUBLICLY TRADED COMPANY, ENJOINED
On May 23, the Commission filed a civil fraud suit against C. William Cox (Cox), the former president and chief executive officer of Intile Designs, Inc. (Intile), for causing Intile, a publicly traded company, to misstate its accrued expenses and liabilities by as much as 55% and its net income by as much as 45% over a five year period. Intile was an importer and distributor of brick, stone and ceramic building products, and its common stock was quoted on the OTC Bulletin Board under the symbol "IDSN" during the relevant period.
The complaint alleges that Cox single-handedly carried out a scheme to underpay Intile's local inventory property taxes, by underreporting the value of its inventory by 85% - 90% in local tax filings. Consequently, Intile underpaid its property taxes by approximately $1,069,000 over the five-year period. As a result, Intile understated its accrued expenses and liabilities by as much as 55%, and overstated its net income by as much as 46%, in periodic reports filed with the Commission during fiscal years 1994 through 1997. Finally, the complaint also alleges that Cox's actions caused Intile to violate record-keeping provisions of the federal securities laws.
Simultaneously with the filing of its action, the Commission accepted Cox's offer of settlement in which he agreed, without admitting or denying the allegations in the Commission's complaint, to an injunction prohibiting him from future violations of the antifraud, reporting, and books and records provisions of the federal securities laws and from serving as an officer or director of any public company. A financial civil penalty was not assessed, based on Cox's demonstrated financial inability to pay.
On May 23, the Commission also instituted cease and desist proceedings against Intile and simultaneously accepted Intile's offer of settlement in which it agreed, without admitting or denying the findings in the Commission's order, to cease and desist from future violations of the federal securities laws. [SEC v. C. William Cox, USDC/SD Texas/Houston Division, Civil Action No. H-001705] (LR-16562); Administrative Proceedings in the Matter of Intile Designs, Inc. (Rel. 34-42813; AAE Rel. 1259; File No. 3-10208)
http://www.sec.gov/news/digests/05-24.txt |
