June 22, 2009
Former American Italian Pasta Company Chairman Settles SEC Charges
The SEC settled charges against Horst W. Schroeder, former chairman of the board of directors of Kansas-City based American Italian Pasta Company ("AIPC") that he signed SEC filings that he should have known contained material misstatements.
According to the Commission's complaint, from its fiscal year 2002 through the second quarter of its fiscal year 2004, AIPC inflated its reported income and earnings per share. As alleged in the complaint, during AIPC's 2004 fiscal year, Schroeder was provided with information showing that a $3.4 million receivable recorded at the end of AIPC's 2003 fiscal year was not valid and collectible. The Commission's complaint alleges that in May 2004, Schroeder signed AIPC's Form S-8 registration, which specifically incorporated by reference AIPC's fiscal year 2003 Form 10-K, which Schroeder also signed and which Schroeder should have known was materially misstated in part because of the invalid and uncollectible $3.4 million receivable.
Without admitting or denying the allegations in the Commission's complaint, Schroeder has consented to the entry of a final judgment enjoining him from violations Section 17(a)(3) of the Securities Act of 1933 ("Securities Act") and Rule 13b2-1 under the Securities Exchange Act of 1934 ("Exchange Act"), and aiding and abetting violations of Sections 13(a) and 13(b)(2)(A) of the Exchange Act and Rules 12b-20, 13a-1, 13a-11, and 13a-13 thereunder. Further, Schroeder has agreed to pay a $50,000 civil penalty.
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