U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 22796 / September 11, 2013
Accounting and Auditing Enforcement Release No. 3478 / September 11, 2013
Securities and Exchange Commission v. True North Finance Corp., et al., Civil Action No. 10-cv-3995 (D. Minn., filed Sept. 21, 2010)
Final Judgments Entered Against Cfo and Real Estate Finance Company
The Securities and Exchange Commission announced that on September 11, 2013, a Minnesota federal court entered final judgments by consent against Owen Mark Williams (Williams) and True North Finance Corporation, f/k/a CS Financing Corporation (True North), in a civil injunctive action filed by the Commission on September 21, 2010. Among other things, the judgment against Williams requires him to pay a $40,000 civil penalty.
The Commission's complaint alleged that True North and its Chief Financial Officer, Williams, overstated revenue in True North's filings with the Commission in 2008 and 2009. Williams caused True North to improperly recognize revenue on interest from borrowers where the borrowers were not paying True North and where the borrowers' impaired financial condition meant that collectability was not reasonably assured. The Complaint alleged that this recognition of revenue departed from generally accepted accounting principles and also departed from True North's revenue recognition policy, which stated that the company would not recognize revenue when the payment of interest was 90 days past due.
The final judgments against Williams and True North also imposed permanent injunctions prohibiting these Defendants from violating of Section 17(a)(2) of the Securities Act of 1933 (Securities Act), Sections 13(b)(2)(A), 13(b)(5), and 15(d) of the Securities Exchange Act of 1934 (Exchange Act), and Rules 13b2-1, 13b2-2, 13b-20, and 15d-14 thereunder.
For further information, please see Litigation Release Number 21657 (Sept. 21, 2010).