U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 21636 / August 31, 2010

Accounting and Auditing Enforcement Release No. 3178 / August 31, 2010

SEC v. Urs Kamber, Stephan Husi and Richard Jon May, Civil Action No. 1:07-CV-01867 (JDB) (D.D.C.)

FORMER GROUP VICE PRESIDENT OF FINANCE, TAX COUNSEL AND TREASURER OF CENTERPULSE USA, INC. SETTLES CHARGES WITH SEC

The Securities and Exchange Commission today 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., has 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, Section 13(b)(5) of the Securities Exchange Act of 1934 (Exchange Act) and Exchange Act Rule 13b2-1, and from aiding and abetting violations of the reporting, books and records and internal controls provisions of the federal securities laws, Exchange Act Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B), and Exchange Act Rules 12b-20, 13a-1 and 13a-16.

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.

The Commission previously reached a settlement in this litigation with Urs Kamber, Centerpulse's former Chief Financial Officer, and Stephan Husi, Centerpulse's former Head of Corporate Planning and Controlling. See Lit. Rel. No. 20605 / AAE Rel. No. 2835 (May 30, 2008); and Lit. Rel. No. 20860 / AAE Rel. No. 2919 (Jan. 21, 2009). The Commission also previously reached administrative settlements with Dennis L. Hynson, CPA, Christopher W. Kelford and Paula J. Norbom, CPA, the former vice presidents of finance for Centerpulse's three U.S. divisions, who consented to the entry of cease-and-desist orders relating to improper accounting decisions they made during the third quarter of 2002. See Admin. Proc. No. 3-13047 / AAE Rel. No. 2832 / Rel. No. 57889 (May 30, 2008); Admin. Proc. No. 3-13048 / AAE Rel. No. 2833 / Rel. No. 57890 (May 30, 2008); and Admin. Proc. No. 3-13049 / AAE Rel. No. 2834 / Rel. No. 57891 (May 30, 2008).

 
http://www.sec.gov/litigation/litreleases/2010/lr21636.htm

Last modified: 8/31/2010