Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

Wednesday, May 21, 2008

Former U.S. Foodservice CFO Consents to Injunction

The SEC announced that the federal district court for the District of Maryland entered a final judgment against defendant Michael Resnick, former CFO of U.S. Foodservice (USF). The judgment permanently enjoins Resnick from violating Sections 10(b) and 13(b)(5) of the Securities Exchange Act of 1934 (Exchange Act) and Rules 10b-5 and 13b2-1 thereunder and from aiding and abetting violations of Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Rules 12b-20 and 13a-1 thereunder. Resnick was permanently barred from serving as an officer or director of a public company. The judgment also orders Resnick to pay approximately $353,750 in disgorgement and prejudgment interest thereon in the amount of $141,529, but waives payment of all disgorgement and prejudgment interest and does not impose a civil penalty, based on the sworn representations in Resnick's Statement of Financial Condition and other documents and information submitted to the Commission.

The SEC alleged that Resnick and others at USF, then a subsidiary of Royal Ahold (Koninklijke Ahold N.V.), participated in a scheme to overstate Royal Ahold's income by $700 million or more in Commission filings and other public announcements for at least fiscal years 2001 and 2002.  Resnick consented to the judgment without admitting or denying the allegations.

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