Securities Law Prof Blog

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

Wednesday, September 1, 2010

Former Group VP of Finance & Tax Counsel of Centerpulse Settles SEC Charges

The SEC announced that Richard Jon May, the former Group Vice President of Finance, Tax Counsel and Treasurer of Centerpulse USA, Inc., a subsidiary of Centerpulse Ltd., settled the Commission's charges against him arising from his alleged involvement in the improper overstatement of Centerpulse's income in the third and fourth quarters of 2002. Without admitting or denying the Commission's allegations, May consented to the entry of a final judgment in the Commission's litigation pending in the U.S. District Court for the District of Columbia. The final judgment, which was entered on August 30, 2010, orders May to pay $20,000 in disgorgement and $10,519 in prejudgment interest. The final judgment also permanently enjoins May from violating the falsification of books and records provision of the federal securities laws and from aiding and abetting violations of the reporting, books and records and internal controls provisions of the federal securities laws.

The Commission's complaint alleged that May, along with two other former Centerpulse executives, (1) overstated Centerpulse's third quarter 2002 income by improperly deferring recognition of a $25 million expense, and (2) improperly overstated Centerpulse's fourth quarter and fiscal 2002 income by not increasing a reserve to cover at least $18 million in liabilities, and improperly using anticipated refund credits to offset another $5 million in expenses.

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That's the way things should be done. It's good to know that the SEC charges are now settled.

Posted by: Urbach & Avraham | Sep 8, 2010 2:04:54 PM

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