YOU AND YOUR SAF-T-LOK CREW ARE GOING TO PAY DEARLY THIS TIME ISAAC.
Potential Securities Violations Continue at DHB Industries
- Complaint Alerts SEC to DHB's Alleged Failure to
Disclose Related Transactions and Hidden Income Source -
NEW YORK, June 12 /PRNewswire/ -- A third complaint letter filed today against DHB Industries (Amex: DHB) with the Securities Exchange Commission alleges DHB has continued to violate federal securities regulations requiring disclosure of material information to investors. The complaint, filed by the Union of Needletrades, Industrial & Textile Employees (UNITE), reveals that DHB executives failed to disclose to investors that they had established a private company operating inside the publicly traded DHB.
The shadow entity, "Tactical Armor Products" (TAP), is owned by Terry Brooks, the wife of DHB's CEO David Brooks, and operated out of a factory leased by DHB in Jacksboro, Tennessee. Although, TAP is constituted independently of DHB, it transacts with DHB as a party to one of DHB's federal contracts and as a product supplier to other DHB subsidiaries. DHB has not disclosed any of these transactions with TAP, or TAP's apparent status as a de facto DHB subsidiary, in potential violation of SEC Regulations S-K and S-X.
In filing the complaint, UNITE's General Counsel, David Prouty, said, "The purpose of these disclosure requirements is to protect investors from conflicts of interest and self-dealing transactions that can destroy investments and ruin companies. We call on DHB to come clean about its related transactions and start respecting securities laws."
In 1992, David Brooks, DHB's CEO, Chairman and largest shareholder was implicated in an insider trading scheme resulting in a federal injunction that he commit no further aiding and abetting violations. Shortly afterwards, the SEC banned him from associating with any investment company for five years. DHB was denied listing on the NASDAQ SmallCap market in 1995, partly because of Brooks' history of securities violations.
UNITE has filed two previous letters of complaint with the SEC this year -- the first on February 6, the second on April 4 - alleging that DHB systematically failed to disclose key information to shareholders. All three letters are posted at www.uniteunion.org.
Since July 2002, employees at DHB's Point Blank subsidiary have been seeking union representation with UNITE for better working conditions. UNITE is the largest union of apparel, textile, and laundry employees in North America, with over 250,000 members.
SOURCE Union of Needletrades, Industrial & Textile Employees
CO: Union of Needletrades, Industrial & Textile Employees; DHB Industries
ST: New York
SU: LBR
Web site: uniteunion.org
prnewswire.com
06/12/2003 09:02 EDT |
