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Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: LLCF who wrote (182243)	7/22/2002 11:47:44 PM
From: KeepItSimple	Read Replies (2) \| Respond to of 436258

Newsflash: PricewaterhouseCoopers was the auditor for this fresh scam! Last time I checked they are the biggest of the remaining Big 4 ! Also, notice that the CEO is now missing in action. Shades of Bre-X anymore? THIS MARKET IS SO FUCKED. This is just the beginning. HPL Technologies Finds Accounting Fraud, Blames Former CEO By: Marcelo Prince Dow Jones Newswires NEW YORK -- HPL Technologies Inc. said it has uncovered a massive accounting fraud involving "fictitious transactions" and "falsified documents" that was apparently orchestrated by its founder and former chief executive, David Lepejian. ADVERTISEMENT The San Jose , Calif. , software start-up, which went public a year ago, also said much of the money reported as cash on its balance sheet "is not now, and may never have been, in the company's possession." "The central player in these acts appears to have been" Mr. Lepejian, said Elias Antoun, a company director and acting CEO, during a brief teleconference. HPL is still investigating whether other officials were involved. Mr. Lepejian's current whereabouts are unknown and the company has been unable to contact him since he left HPL's offices Tuesday. The 41-year-old engineer had been president and CEO since he helped start the company in 1989. Trading in HPL shares was suspended at $14.10 by Nasdaq regulators before Friday's trading session after the company announced it was investigating accounting irregularities and had fired Mr. Lepejian. At least $11 million of the $13.7 million HPL reported as revenue in the fiscal fourth quarter ended March 31 was based upon "fictitious transactions supported by falsified documents," said Mr. Antoun, the head of HPL's audit committee. The company said Friday that the deals were booked as sales to HPL's Japanese distributor, Canon Sales Co ., a unit of Canon Inc. (CAJ). But "Canon never agreed to enter into these transactions," Mr. Antoun said Monday. Canon Sales accounted for $29 million, or 78%, of the revenue HPL reported in the fiscal year ended March 31 . In the prior year, Canon Sales was $5.8 million, or 43%, of HPL's reported revenue. A spokesperson for Canon Sales couldn't immediately be reached. "Similar transactions appeared to have been booked as revenue in prior quarters as well," added Mr. Antoun. "We do not know whether we have identified the full extent of the problem." HPL expects to restate results for the fiscal year ended March 31 and possibly for the previous year, when it was still a privately held company. Mr. Antoun went on to say that a "material amount" of the company's cash is unaccounted for and some cash transfers appear to be based on falsified documents. The company, which reported $60.1 million in cash at the end of March, had $ 35.7 million in cash and short-term investments as of Friday, noted Mr. Antoun. In addition to firing Mr. Lepejian, HPL has demoted its chief financial officer, Ita Geva, and put Rita Rubinstein, who was its vice president of administration, corporate secretary and vice president of human resources, on administrative leave. The company said the accounting troubles came to light last week and it has hired a law firm and forensic accountants to investigate the matter. Mr. Antoun noted it would take several weeks before the company completes its investigation. PricewaterhouseCoopers remains HPL's independent auditors. The company has notified the Securities and Exchange Commission of its findings and expects the agency will begin its own investigation. HPL executives didn't take questions from participants on Monday's conference call and declined interview requests. -By Marcelo Prince; Dow Jones Newswires; 201-938-5244; marcelo.prince@ dowjones.com