SECURITIES EXCHANGE ACT OF 1934
Release No. 49683 / May 11, 2004

ACCOUNTING AND AUDITING ENFORCEMENT
Release No. 2010 / May 11, 2004

ADMINISTRATIVE PROCEEDING
File No. 3-11485


In the Matter of

JAY S. OZER, CPA

Respondent.


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ORDER INSTITUTING PUBLIC
ADMINISTRATIVE PROCEEDINGS
PURSUANT TO RULE 102(e)(3) OF
THE COMMISSION'S RULES OF
PRACTICE, MAKING FINDINGS, AND
IMPOSING REMEDIAL SANCTIONS

I.

The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest that public administrative proceedings be, and hereby are, instituted against Jay S. Ozer ("Ozer" or "Respondent"), pursuant to Rule 102(e)(3) of the Commission's Rules of Practice.1

II.

In anticipation of the institution of these proceedings, Respondent has submitted an Offer of Settlement ("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 contained herein, except as to the Commission's jurisdiction over him and the subject matter of these proceedings and the findings contained in Section III.3 below, which are admitted, Respondent consents to the entry of this Order Instituting Public Administrative Proceedings Pursuant to Rule 102(e)(3) of the Commission's Rules of Practice, Making Findings, and Imposing Remedial Sanctions ("Order"), as set forth below.

III.

On the basis of this Order and Respondent's Offer, the Commission finds that:

1. Jay S. Ozer, 60, was a partner at Arthur Andersen LLP from 1976 to August 2000 and was the engagement partner on Arthur Andersen's 1997 and 1998 audits of Styling Technology Corporation's ("Styling") year-end financial statements and on its reviews of Styling's quarterly financial statements from the first quarter of 1997 through the second quarter of 1999. At the time of the Styling audits and reviews, Ozer was a certified public accountant licensed in Arizona and New York. In September 2002, Ozer consented to the revocation of his license as a certified public accountant in Arizona, and, in March 2003, he relinquished his license in New York.

2. Styling Technology Corporation is a Delaware corporation headquartered in Scottsdale, Arizona, that at all relevant times was engaged in the development, production and marketing of beauty salon products. Styling's common stock is registered with the Commission under Section 12(g) of the Securities Exchange Act of 1934 ("Exchange Act") and, until November 1999, was listed for trading on the Nasdaq National Market System. In August 2000, Styling entered a proceeding under Chapter 11 of the U.S. Bankruptcy Code and, shortly thereafter, restated its financial statements for 1997, 1998 and the first two quarters of 1999. Pursuant to a plan of reorganization filed in the bankruptcy court, Styling sold off all of its business assets.

3. On May 7, 2004, the U.S. District Court for the District of Columbia entered a final judgment by consent against Ozer, permanently enjoining him from violating and aiding and abetting violations of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder and from aiding and abetting violations of Section 13(a) of the Exchange Act and Rules 12b-20, 13a-1 and 13a-13 thereunder in a civil action entitled Securities and Exchange Commission v. Sam Leopold, et al., Civil Action Number 03-CV-2491 RMU. The Court also ordered Ozer to pay a civil penalty of $50,000. Ozer consented to the entry of the Court's order without admitting or denying the allegations of the Commission's complaint.

4. The Commission's complaint alleged, among other things, that Styling's principal executive officers and others engaged in a fraudulent scheme that resulted in Styling filing materially false and misleading financial statements in its annual reports on Form 10-K for the fiscal years ended December 31, 1997, and December 31, 1998, and in its quarterly reports on Form 10-Q for the first two quarters of fiscal year 1999. The complaint alleged that, in the course of the 1998 year-end audit of Styling, Ozer encountered numerous red flags that should have alerted him to significant financial problems at the company, yet recklessly failed to ensure that the audit team follow basic audit procedures in its examination of the company. The complaint alleged that Ozer then caused Arthur Andersen to render an unqualified audit report on Styling's 1998 financial statements, falsely representing that the Styling audit had been conducted in accordance with generally accepted auditing standards and that Styling had reported its financial condition in conformity with generally accepted accounting principles ("GAAP"). Finally, the complaint alleged that, during his review of Styling's 1999 first and second quarter financial statements, Ozer failed to object to the company's recognition of revenue from transactions that did not meet GAAP criteria and to the company's false and misleading representations concerning the purpose of its write-off of $5.1 million of uncollectible accounts receivable.

IV.

In view of the foregoing, the Commission deems it appropriate and in the public interest to impose the sanction agreed to in Respondent Ozer's Offer.

Accordingly, IT IS HEREBY ORDERED, effective immediately, that Ozer is suspended from appearing or practicing before the Commission as an accountant.

By the Commission.

Jonathan G. Katz
Secretary

Endnotes


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.