UNITED STATES OF AMERICA
| ORDER INSTITUTING ADMINISTRATIVE PROCEEDINGS PURSUANT TO RULE 102(e) OF THE COMMISSION'S RULES OF PRACTICE, MAKING FINDINGS, AND IMPOSING REMEDIAL SANCTIONS|
The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest that public administrative proceedings be, and hereby are, instituted against Jeffrey A. Conway ("Respondent" or "Conway") pursuant to Rule 102(e)(3)(i) of the Commission's Rules of Practice.1
In anticipation of the institution of these proceedings, Respondent has submitted an Offer of Settlement (the "Offer") which the Commission has determined to accept. Solely for the purpose of these proceedings and any other proceedings brought by or on behalf of the Commission, or to which the Commission is a party, and without admitting or denying the findings herein, except as to the Commission's jurisdiction over him and the subject matter of these proceedings, and the findings contained in Section III.4. below, which are admitted, Respondent consents to the entry of this Order Instituting Administrative Proceedings Pursuant to Rule 102(e) of the Commission's Rules of Practice, Making Findings, and Imposing Remedial Sanctions ("Order"), as set forth below.
On the basis of this Order and Respondent's Offer, the Commission finds that:
1. Conway, age 45, is and has been a certified public accountant. He was formerly licensed to practice in the States of Florida and Oklahoma only. His licenses in those states have since lapsed. He served as Chief Financial Officer of Rent-Way, Inc. ("Rent-Way") from February 1992 until September 1999. He also served as President and Chief Operating Officer of Rent-Way from September 1999 until December 2000 and as a Director from February 2000 until December 2000.
2. Rent-Way was, at all relevant times, a Pennsylvania Corporation with its principal place of business in Erie, Pennsylvania. At all relevant times, Rent-Way's common stock was registered with the Commission pursuant to Section 12(b) of the Securities Exchange Act of 1934 ("Exchange Act").
3. On July 22, 2003, the Commission filed a complaint against Conway and others in SEC v. Rent-Way, Inc. et al., Civil Action No. 03-CV-231E (W.D.Pa.). The Commission alleged, among other things, that Conway (i) directed the Company's controller to limit artificially Rent-Way's expenses between December 1998 and October 2000 in order to meet the Company's earnings targets that Conway set, and (ii) directed the Company's senior operating officer to defer artificially the recording of operating losses at the end of fiscal years 1999 and 2000. The Commission further alleged that, as a result of the fraud, the Company's forms 10-Q for 1999 and 2000 and its form 10-K for 1999 understated expenses improperly by approximately $60 million.
4. On July 23, 2003, the court entered an order permanently enjoining Conway, by consent, from future violations of Sections 10(b) and 13(b)(5) of the Exchange Act and Rules 10b-5, 13b2-1 and 13b2-2 thereunder; from controlling any person who violates Sections 13(a) and 13(b)(2) of the Exchange Act and Rules 12b-20, 13a-1 and 13a-13 thereunder; and under Section 21(d)(2) of the Exchange Act from serving as an officer or director of a public company. Conway was also ordered to pay $129,350 in disgorgement of profits from his sale of stock, and $30,067 in prejudgment interest; and a $200,000 civil money penalty.
In view of the foregoing, the Commission deems it appropriate and in the public interest to impose the sanction agreed to in Respondent's Offer.
Accordingly, it is hereby ORDERED, effective immediately, that:
A. Conway is suspended from appearing or practicing before the Commission as an accountant.
By the Commission.
Jonathan G. Katz
1 Rule 102(e)(3)(i) provides, in relevant part, that:
The Commission, with due regard to the public interest and without preliminary hearing, may, by order, . . . suspend from appearing or practicing before it any . . . accountant . . . who has been by name . . . permanently enjoined by any court of competent jurisdiction, by reason of his or her misconduct in an action brought by the Commission, from violating or aiding and abetting the violation of any provision of the Federal securities laws or of the rules and regulations thereunder.
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