Lumenis to delist shares in settlement with SEC
The SEC intends to recommend indicting a current Lumenis employee.
Eitan Tapiro 8 Mar 06 14:00
Lumenis Ltd. (OTCBB:LUME), which develops, manufactures, and markets laser-based medical devices, today announced that it had reached an agreement in principle with the US Securities and Exchange Commission (SEC) Division of Enforcement to settle the previously disclosed SEC investigation.
Under the proposed settlement, Lumenis will not pay a fine, and the company will continue to cooperate with the ongoing SEC investigation. Lumenis will also agree to an SEC order delisting the company for trading in the US. Consequently, when the order comes into effect, Lumenis’s shares cannot be quoted or traded in the US until the company can reregister them with the SEC.
A year ago, Lumenis announced that the SEC had recommended opening civil proceedings against the company for violating US securities laws. The recommendation was in connection with the reporting of certain transactions reflected in Lumenis' financial statements for 2002 and 2003, and for a company announcement from May 3, 2004, concerning a report by the company’s auditing committee.
The SEC claims that Lumenis failed to provide correct details about the quarterly impact from the registration of certain transactions, which were the subject of the auditing committee’s report, thereby creating the misleading impression that the audit referred solely to the company incorrectly timing the registration of revenue, whereas some of the revenue should never have been registered at all. In other words, Lumenis inflated its revenue.
In today’s proposed settlement, Lumenis said it “will consent, without admitting or denying the allegations in a complaint to be filed by the SEC, to the entry of a permanent civil injunction against future violations of the antifraud, reporting, books and records, and internal control provisions of the federal securities laws and related SEC rules.”
Lumenis said, “The proposed settlement is is subject to final approval by the SEC and the court in which the SEC's complaint will be filed. The Company cannot give assurance that the SEC or the court will approve the proposed settlement.”
Lumenis adds, “While the proposed settlement, if approved, will achieve finality for the company, the company understands that the SEC Staff is recommending that one current and one former employee will be the subject of SEC charges, that the former employee has agreed to settle the charges at the same time as the company and that the current employee does not intend to settle the charges.”
Lumenis concludes, “If the SEC issues an order for the deregistration of the Company's shares, Lumenis will continue normal business operations while the deregistration of the company's shares is in effect. The effective date for deregistration has not yet been determined and the company's shares will continue to be quoted on the Pink Sheets until the SEC issues a final order.”
Published by Globes [online], Israel business news - www.globes.co.il - on March 8, 2006
© Copyright of Globes Publisher Itonut (1983) Ltd. 2006
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