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To: who cares? who wrote (3409)	7/12/1999 5:18:00 PM
From: StockDung	Respond to of 10354

Mr. Burns, Fresh Meat, take a look at this release by the SEC on Mark F. Jensen ("Jensen"), CPA UNITED STATES SECURITIES AND EXCHANGE COMMISSION SECURITIES EXCHANGE ACT OF 1934 Release No. 41241 / April 1, 1999 ACCOUNTING AND AUDITING ENFORCEMENT Release No. 1122 / April 1, 1999 ADMINISTRATIVE PROCEEDING File No. 3-9863 ADMINISTRATIVE PROCEEDINGS INSTITUTED AGAINST FORMER AUDITORS OF SKY SCIENTIFIC, INC. The Commission has instituted administrative proceedings pursuant to Rule 102(e) of the Commission's Rules of Practice against Barry C. Scutillo ("Scutillo"), CPA, and Mark F. Jensen ("Jensen"), CPA, charging that they engaged in improper professional conduct by recklessly violating professional auditing and accounting standards in connection with the audit of the 1994 financial statements of Sky Scientific, Inc. ("Sky"). Previously, the Commission instituted administrative and cease-and-desist proceedings against Sky and seventeen other individuals and entities for their roles in a fraudulent scheme involving the filing of false and misleading periodic reports with the Commission, and the issuance of millions of shares of stock, most registered on Forms S-8 and issued to consultants who then sold the stock and returned a portion of the proceeds to Sky. Based in Boca Raton, Florida, Sky purported to be in the business of mining and processing precious metals and in financial services. The Division of Enforcement alleged that Sky's periodic reports materially overstated its assets by assigning a $40 million value to phony Russian certificates of deposit ("CDs"), representing 57% of total assets; materially understated its net loss by failing to expense the cost of issuing the stock to consultants; and materially overstated the value of its mineral properties at $29.5 million, representing 42% of total assets. Following trial, an Administrative Law Judge recently ruled that Sky and the others had violated the antifraud and registration provisions of the federal securities laws as charged. In the Matter of Sky Scientific, Inc. et al., Admin. Proc. File No. 3-9201, Initial Decision Release No. 137 (March 5, 1999). In the Order Instituting Public Administrative Proceedings Pursuant to Rule 102(e) of the Commission's Rules of Practice ("Order") against Scutillo, of southern Florida, and Jensen, of Salt Lake City, Utah, the Division of Enforcement alleges that they did not conduct their audit of Sky's 1994 financial statements in accordance with Generally Accepted Auditing Standards ("GAAS"). The Order alleges that Scutillo and Jensen, the engagement partner and concurring partner, respectively, failed to comply with GAAS in that they failed to plan or perform appropriate audit procedures to audit Sky's Russian CDs and its mineral properties; failed to maintain control over the confirmation request and response process concerning the CDs; failed to obtain sufficient competent evidential matter concerning the validity and valuation of the CDs, the valuation of the mineral properties and the value of Sky's issuances of the Form S-8 stock. Finally, the Order alleges that Scutillo and Jensen engaged in improper professional conduct by failing to assure that Sky's financial statements complied with Generally Accepted Accounting Principles concerning the CDs, the mineral properties and the Form S-8 stock. A hearing will be held before an administrative law judge to determine whether the staff's allegations are true, and if so, whether Scutillo and/or Jensen should be censured or temporarily or permanently disqualified from, and denied the privilege of appearing or practicing before the Commission.