From today's SEC Digest:
SEC SUES FORMER OFFICERS OF MADERA INTERNATIONAL AND THE COMPANY'S FORMER AUDITORS
The SEC today filed complaints in the United States District Court for the District of Columbia charging three former officers of Madera International, Inc. with falsifying Madera's financial statements and fraudulently inflating the company's assets, sales and net income. Madera was engaged in exporting timber from South America.
Named in the first complaint, in addition to Madera, are Ramiro Fernandez-Moris, of Miami, Florida, and Daniel S. Lezak, of Incline Village, Nevada, both former CEOs and Chairmen of the Company. The complaint alleges that:
* From 1994 through early 2000, Fernandez-Moris and Lezak variously caused the company to report as assets purported timber-producing properties in South and Central America to which it had no apparent legal title and to assign unrealistic values to those properties, to record revenues from phony sales, and to furnish false sales invoices, shipping documents, cash receipts records, and audit confirmations to Madera's auditors;
* Management issued false press releases concerning, among other things, the Company's results of operations and business prospects; and
* Ferandez-Moris and Lezak enriched themselves by selling Madera stock during the period of their falsification of the Company's public disclosures.
The SEC also filed settled proceedings against Regina Fernandez, Madera's former corporate secretary. Fernandez consented to the issuance of an order that she cease and desist from violations of the antifraud, reporting, books and records provisions of the Exchange Act, Sections 10(b) and 13(b)(5) of the Exchange Act Rules 10b-5, 13b2-1 and 13b2-2 and from causing any violations of Section 13(a) of the Exchange Act and Exchange Act Rules 12b-20, 13a-1 and 13a-13 and agreed to pay a $15,000 civil penalty.
The SEC also instituted an administrative proceeding to determine whether the registration of Madera's common stock should be revoked based, among other things, on Madera's failure to file required periodic reports with the Commission.
Finally, the SEC filed settled administrative proceedings against Madera's former auditor Harlan & Boettger, LLP, and its two audit partners, William C. Boettger and P. Robert Wilkinson, as well as the company's successor auditor, Ralph Sanchez, alleging improper professional conduct with respect to their audits of Madera's financial statements. Harlan & Boettger, Boettger and Wilkinson consented to the entry of an order permanently denying each of them the privilege of practicing as accountants before the Commission. Sanchez consented to the entry of an order denying him the privilege of practicing as an accountant before the Commission with a right to reapply after one year. [SEC v. MADERA INTERNATIONAL, INC., RAMIRO FERNANDEZ-MORIS and DANIEL S. LEZAK, Civ. No. 01-10985 (JR) (D.D.C.]; [SEC v. REGINA FERNANDEZ, Civ. No. 01-10986, JR, D.D.C.] (LR-17140; AAE Rel. 1453); (IN THE MATTER OF MADERA INTERNATIONAL, INC., Rel. 34-44814; AAE Rel. 1449; Administrative Proceeding File No.3-10577; IN THE MATTER OF REGINA FERNANDEZ, Rel. 44815; AAE Rel. 1450; Administrative Proceeding File No.3-10578; IN THE MATTER OF RALPH SANCHEZ, Rel. 34-44816; AAE Rel. 1451; Administrative Proceeding File No. 3-10579; IN THE MATTER OF HARLAN & BOETTGER, LLP, WILLIAM C. BOETTGER and P. ROBERT WILKINSON, Rel. 34-44817; AAE Rel. 1452; Administrative Proceeding File No. 3-10580)
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