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U.S. Securities and Exchange Commission

UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION

Securities Exchange Act of 1934
Release No. 42022 / October 18, 1999

Accounting and Auditing Enforcement
Release No. 1191 / October 18, 1999

Administrative Proceeding
File No. 3-10078


______________________________
                             :
    In the Matter of         : ORDER INSTITUTING PUBLIC
                             : PROCEEDINGS AND OPINION AND
    JERRY M. WALKER, CPA,    : ORDER PURSUANT TO RULE 102(e)
                             : OF THE COMMISSION'S
       Respondent.           : RULES OF PRACTICE
_____________________________:

I.

The Securities and Exchange Commission deems it appropriate and in the public interest that public administrative proceedings be, and hereby are, instituted against Jerry M. Walker ("Walker") pursuant to Rule 102(e) of the Commission's Rules of Practice.1

II.

Walker has submitted an Offer of Settlement to the Commission in anticipation of the institution of this administrative proceeding. The Commission has determined that it is appropriate and in the public interest to accept Walker's Offer of Settlement. Solely for the purposes of this proceeding and any other proceeding brought by or on behalf of the Commission or in which the Commission is a party, and without admitting or denying the findings herein, except that Walker admits the jurisdiction of the Commission over him and over the subject matter of this proceeding, Walker consents to the entry of this Order Instituting Public Proceedings and Opinion and Order Pursuant to Rule 102(e) of the Commission's Rules of Practice (the "Order").

Accordingly, IT IS ORDERED that proceedings pursuant to Rule 102(e) of the Commission's Rules of Practice be, and hereby are, instituted.

III.

The Commission makes the following findings:2

A. Respondent

Jerry M. Walker, age 54, was since 1993 an inactive certified public accountant licensed in the State of California, and in 1997 his license expired. During the relevant time period, Walker served as the CEO of Unison HealthCare Corporation ("Unison"), as well as its president and a board member. He resigned from his positions at the board's request in April 1997. Walker practiced before the Commission within the meaning of Rule 102(f) of the Commission's Rules of Practice by preparing or reviewing, or being responsible for the preparation or review, of Unison's financial statements that were filed with the Commission.

B. Unison HealthCare Corporation

Unison, a Delaware corporation with principal executive offices in Scottsdale, Arizona, owned and operated more than 50 health care facilities in 1996. Unison registered its securities with the Commission under Section 12(g) of the Securities Exchange Act of 1934 (the "Exchange Act") and was required to file periodic reports with the Commission pursuant to Section 13(a) of the Exchange Act. During the relevant period, Unison's common stock was listed for trading on the NASDAQ National Market System. Unison filed for bankruptcy reorganization in May 1998, and subsequently changed its name to Raintree HealthCare Corporation.

C. Facts

1. The Commission filed an action in the United States District Court for the District of Arizona on September 27, 1999 alleging that Walker and other officers of Unison made unsupported adjustments in financial accounting records that materially inflated Unison's net income for two consecutive quarters in 1996.

2. The Commission's complaint alleges that Walker and Unison's controller created an unsupported journal entry that materially increased Unison's Medicare revenue for the second quarter of 1996. The complaint alleges that this adjustment to Unison's second quarter financial statements artificially inflated net income by a material amount. The complaint alleges the amount was material because it boosted Unison's quarterly net income from a relatively insignificant $54,000, or $.00 per share, to a substantial gain of $851,000, or $.21 per share.

3. The complaint further alleges that Walker, the controller, and the CFO created unsupported journal entries that materially increased Medicare receivables and materially decreased expenses for the third quarter of 1996. The complaint alleges that the adjustments to Unison's third quarter financial statements artificially inflated net income by material amounts. The complaint alleges that $3.391 million adjustment to revenues and the $1.7 million adjustment to expenses were material because they enabled Unison to report positive net income of $1.2 million, or $.30 per share, rather than a loss of almost $4 million.

4. The Commission's complaint alleges that the $800,000 adjustment, as well as the $3.391 million and $1.7 million adjustments, lacked support in the company's records. The complaint alleges that the unsupported adjustments to net income enabled Unison to publicly report positive earnings in line with analysts estimates for the second quarter of 1996 and its own announced estimates for the third quarter of 1996. The complaint alleges that Unison's Forms 10-Q filed for the second and third quarters of 1996 were materially false and misleading. Unison later restated its results of operations to report a pretax loss of nearly $15 million for the nine-month period that included both quarters. Finally, the complaint alleges that Walker knew or was reckless in not knowing that each contained materially false and misleading information because Unison's financial statements included unsupported accounts receivable, revenue, and expenses.

5. Without admitting or denying the allegations in the Commission's complaint, Walker, in his Consent of Defendant Jerry M. Walker, agreed to the entry of an order of the federal district court imposing sanctions.

6. On September 30, 1999, in SEC v. Jerry M. Walker, Civ-99-1737-PHX-ROS, the United States District Court for the District of Arizona entered a Final Judgment of Permanent Injunction and Other Relief as to Defendant Jerry M. Walker permanently enjoining Walker from:

(a) Violating Section 10(b) of the Exchange Act and Rule 10b-5 thereunder;

(b) Violating Section 13(b)(5) of the Exchange Act and Rules 13b2-1 and 13b2-2 thereunder; and

(c) Aiding and abetting violations of Section 13(a) of the Exchange Act and Rule 13a-13.

IV.

ORDER

In view of the foregoing, the Commission deems it appropriate and in the public interest to accept the Offer of Settlement submitted by Walker and,

IT IS HEREBY ORDERED, effectively immediately, that:

A. Walker be, and hereby is, denied the privilege of appearing or practicing before the Commission as an accountant pursuant to Rule 102(e) of the Commission's Rules of Practice.

B. Five (5) years from the date of this Order, Walker may apply to the Commission by submitting an application to the Office of the Chief Accountant requesting that he be permitted to resume appearing or practicing before the Commission as:

1. a preparer or reviewer, or a person responsible for the preparation or review, of financial statements of a public company to be filed with the Commission upon submission of an application satisfactory to the Commission in which Walker undertakes that, in his practice before the Commission, his work will be reviewed by the independent audit committee of the company for which he works or in some other manner acceptable to the staff of the Commission.

2. an independent public accountant upon submission of an application to the Office of the Chief Accountant of the Commission containing a showing satisfactory to the Commission that:

(a) Walker, or any firm with which he is or becomes associated in any capacity, is and will remain a member of the SEC Practice Section of the American Institute of Certified Public Accountants Division for CPA Firms ("SEC Practice Section") as long as he appears or practices before the Commission as an independent accountant;

(b) Walker, or any firm with which he is or becomes associated, has received an unqualified report relating to his or the firm's most recent peer review conducted in accordance with the guidelines adopted by the SEC Practice Section; and

(c) Walker will comply with all applicable SEC Practice Section requirements, including all requirements for periodic peer reviews, concurring partner reviews, and continuing professional education, as long as he appears or practices before the Commission as an independent public accountant.

C. The Commission's review of any request or application by Walker to resume appearing or practicing before the Commission may include consideration of, in addition to the matter referred to above, any other matters relating to Walker's character, integrity, professional conduct, or qualifications to appear or practice before the Commission.

By the Commission.

_______________________
Jonathan G. Katz
Secretary


Footnotes

1 Rule 102(e)(3)(i), in relevant part, provides that the Commission may suspend from appearing or practicing before it any accountant who by name has been permanently enjoined, by a court of competent jurisdiction in an action brought by the Commission, from violating or aiding and abetting any violation of any provision of the federal securities laws or the rules and regulations thereunder. 17 C.F.R. 201.102(e)(3)(i).

2 The findings herein are made pursuant to Walker's Offer of Settlement, and are not binding on any other person or entity in this or any other proceeding.

http://www.sec.gov/litigation/admin/34-42022.htm


Modified:10/05/1999