Outline of Recent SEC Enforcement Actions - the Utah State Bar

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The SEC alleges that Scott Hirth of Carleton, Mich., the former Vice President of Finance and CFO for ProQuest Company's Information and Learning Division, made fraudulent manual journal entries at the end of monthly and quarterly reporting periods in order to favorably alter ProQuest's financial results over a five-year period. ProQuest, which produces electronic databases of archived information, is now known as Voyager Learning Company. The company has agreed to settle the SEC's charges, and Hirth will pay more than $400,000 to settle the charges against him. The SEC also alleged that ProQuest failed to devise and maintain a system of internal accounting controls that could have prevented Hirth's scheme and failed to properly apply other basic accounting principles. ProQuest and Hirth settled the charges without admitting or denying the allegations of the SEC's complaint. Under the settlement, Hirth is permanently enjoined from committing future violations of the federal securities laws, and will pay $233,676 in disgorgement, $54,474.25 in prejudgment interest, and a penalty of $130,000. Hirth also consented to be permanently barred from serving as an officer and director of a public company and from practicing as an accountant before the Commission. ProQuest is permanently enjoined from future violations of the internal controls, books and records, and reporting provisions of the federal securities laws. 36
OIL FOR FOOD CASES CASES INVOLVING FOREIGN PAYMENTS SEC v. Novo Nordisk A/S Lit. Rel. No. 21033 (May 11, 2009) http://sec.gov/litigation/litreleases/2009/lr21033.htm Settled charges against Novo Nordisk were filed for violations of Foreign Corrupt Practices Act books and records and internal controls laws. Novo Nordisk, a Danish company, specializes in the manufacture and development of pharmaceutical products and is a leading supplier of insulin worldwide. The complaint alleges that from 2000 through 2003, Novo Nordisk paid $1,437,946 in kickbacks and agreed to pay an additional $1,315,454 in kickbacks in connection with its sale of humanitarian goods to Iraq under the United Nations Oil for Food Program (the "Program"). The kickbacks were characterized as "after-sales service fees" ("ASSFs"), but no bona fide services were performed. According to the Commission's Complaint: Novo Nordisk engaged its long-time Jordan-based agent to submit bids on Novo Nordisk's behalf to Kimadia, the Iraq State Company for the Importation and Distribution of Drugs and Medical Appliances, under the Program. Two branches of Novo Nordisk — RONE, based in Athens, Greece, and NEO, based in Amman, Jordan — handled the sales to Iraq and supplied the agent with bid prices for each contract. In late 2000 or early 2001, a Kimadia import manager advised the agent that Kimadia required Novo Nordisk to pay a ten percent kickback in order to obtain a contract under the Program. The Kimadia import manager told the agent that Novo Nordisk should increase its prices by ten percent and pay that amount to Kimadia. By doing so, Novo Nordisk would recover the secret kickback from the U.N. escrow account when the contract, with the inflated price, was subsequently approved for disbursement and paid by the U.N. A Novo Nordisk officer rejected the request to pay Kimadia a ten percent kickback, and instead suggested that Novo Nordisk find another way. Novo Nordisk offered to reduce the price of its medicines by ten percent, but the Kimadia import manager angrily refused the offer. A Novo Nordisk Senior Vice President, along with RONE and NEO managers authorized the kickbacks to Kimadia despite the other officer's refusal to do so. On or about April 2001 and August 2001, respectively, Novo Nordisk paid increased commissions to its agent to pay the kickbacks to Kimadia. The agent's commission was increased under the guise that the payment was used to cover the agent's increased distribution and marketing costs. Various e-mails discussed the scheme to conceal the conduct, and the U.N. contracts were artificially inflated by ten percent. According to the RONE managers, subsequent kickbacks were also approved by Novo Nordisk. Altogether, Novo Nordisk made a total of $1,437,946 in improper kickback payments on eleven contracts through the agent. Novo Nordisk also agreed to pay approximately 37
Page 1 and 2: Outline of Recent SEC Enforcement A
Page 3 and 4: OTHER CASES .......................
Page 5 and 6: SEC v. Marc S. Dreier .............
Page 7 and 8: severe concerns about the increasin
Page 9 and 10: The complaint alleges: • Strauss
Page 11 and 12: According to the SEC's orders, Zuri
Page 13 and 14: The SEC alleges that Cassidy and O'
Page 15 and 16: Watson, engaged in a fraudulent sch
Page 17 and 18: judgment that permanently enjoins h
Page 19 and 20: officer or director of a public com
Page 21 and 22: CASES INVOLVING STOCK OPTION BACKDA
Page 23 and 24: made materially false and misleadin
Page 25 and 26: the antifraud, reporting, record-ke
Page 27 and 28: Specifically, the SEC's complaint a
Page 29 and 30: its extensive remedial measures. Un
Page 31 and 32: and former Director of Human Resour
Page 33 and 34: thereunder. In addition, the SEC al
Page 35: The complaint alleges that all of t
Page 39 and 40: held for one year and the unusually
Page 41 and 42: Bangladesh; telecommunications proj
Page 43 and 44: In a related action, the Commission
Page 45 and 46: participated in a scheme to bribe N
Page 47 and 48: The settlements will restore approx
Page 49 and 50: and that the defendants acted as un
Page 51 and 52: the firms to cease-and-desist from
Page 53 and 54: 2008, Wachovia offered to purchase
Page 55 and 56: eligible customers incurred consequ
Page 57 and 58: deceptive or fraudulent devices or
Page 59 and 60: Securities Act of 1933 and Section
Page 61 and 62: Admin. Proc. File No. 3-12751 (Sept
Page 63 and 64: CASES INVOLVING SELF-REGULATORY ORG
Page 65 and 66: The defendants are Michael T. Uberu
Page 67 and 68: Specifically, the SEC alleges that
Page 69 and 70: The SEC's charges against Harding r
Page 71 and 72: have withdrawn approximately $8.4 m
Page 73 and 74: Press Release (January 21, 2009) ht
Page 75 and 76: CASES INVOLVING MUTUAL FUNDS AND IN
Page 77 and 78: securities, became illiquid on that
Page 79 and 80: http://sec.gov/litigation/admin/200
Page 81 and 82: The SEC alleges that Pax World purc
Page 83 and 84: BACAP aided and abetted and caused
Page 85 and 86: The complaint alleges that the defe
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disgorgement of illegal profits, ci
Page 89 and 90:
InVision Technologies, Inc.; Eon La
Page 91 and 92:
firm. The SEC alleges Murdoch used
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SEC v. Pawel P. Dynkowski, Matthew
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shares of Mobile Ready Entertainmen
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The Securities and Exchange Commiss
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The complaint alleges violations of
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CASES INVOLVING SECURITIES OFFERING
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y causing the release of spam email
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The SEC filed an emergency action t
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Restructuring Officer Hamstreet & A
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investigation. King went so far as
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limited trading that he did, withdr
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separate transactions) and forwarde
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The SEC alleges that Weitzman eithe
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misrepresentations including promis
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Outline of Recent SEC Enforcement Actions - the Utah State Bar

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