The Lure of New Technology

Scam artists know this, of course, which is why they often place supposed technological breakthroughs at the center of their scams.

In October 2007, according to the SEC, e-Smart Technologies, Inc. of New York City reported that its multi-functional biometric identification system (otherwise known as a smart card) had very impressive capabilities and was ready for immediate deployment. A few months later, e-Smart issued a press release announcing that the company had executed a contract with a well-known South Korean company for the purchase of 20 million smart cards. This week the SEC commenced an enforcement action against e-Smart, CEO Mary Grace, and Chief Technology Officer Tamio Saito, alleging that the company’s claims were false. According to the SEC’s press release: (more…)

SEC Seeks Return of Executive Pay Earned While Corporation Was Engaged in Accounting Fraud

CSK Auto Corporation was an automotive parts and accessories retailer headquartered in Arizona.  In May 2009, the SEC instituted settled cease-and-desist proceedings against CSK and found that the company had fraudulently filed false financial statements for fiscal years 2002 through 2004.  The SEC has now filed suit against Maynard L. Jenkins, CSK’s former CEO, seeking to [...]

CSK Auto Corporation was an automotive parts and accessories retailer headquartered in Arizona.  In May 2009, the SEC instituted settled cease-and-desist proceedings against CSK and found that the company had fraudulently filed false financial statements for fiscal years 2002 through 2004.  The SEC has now filed suit against Maynard L. Jenkins, CSK’s former CEO, seeking to have him repay $2,091,020 in bonuses and $2,018,893 in company stock sales that he received in compensation while CSK was committing that fraud.  Section 304 of the Sarbanes-Oxley of 2002 deprives corporate executives of money that they earned while their companies were misleading investors.

The case is significant because the SEC does not allege that Jenkins knew about or participated in the fraud.  The SEC is nevertheless pursuing reimbursement from Jenkins.  Let’s pray that the SEC aggressively pursues many more such cases before congressmen beholden to big business succeed in taking away the SEC’s authority to do so.

 

 

 
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