SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 16964 / April 17, 2001
Accounting and Auditing Release No. 1382 / April 17, 2001
SEC v. Excal Enterprises, Inc., et al., Civil Action No. 95-1583-CIV-T-23B (M.D.Fla.)
On January 17, 2001, the Commission announced settlements with the remaining three defendants in this long-standing federal court litigation. In its original complaint, the Commission alleged that Excal misled the investing public by concealing the loss of three material customers, in six quarterly, one annual and one current report on Form 8-K filed in 1991 and 1992. The alleged misconduct involved the company's failure to disclose and its materially false statements with respect to the loss of Western Auto, Winston Tire and Sears, Roebuck & Co.; falsely recording an advance payment as a sale; and falsely recording revenue for Western Auto and offsetting that revenue with falsely recorded expenses.
Without admitting or denying the Commission's allegations, the remaining defendants settled as follows: Excal Enterprises, Inc. (final judgment permanently enjoining it from violating Sections 10(b), 13(a), and 13(b)(2)(A) of the Securities Exchange Act of 1934 and Rules 10b-5, 13a-1, 13a-11, 13a-13, and 12b-20 thereunder); R. Park Newton, III (final judgment (i) permanently enjoining him from violating Section 17(a) of the Securities Act of 1933 and Sections 10(b) and 16(a) of the Exchange Act and Rules 10b-5, 13b2-1, 13b2-2, 16a-2 and 16a-3 thereunder; (ii) ordering disgorgement of $80,000 plus prejudgment interest of $75,000; and (iii) ordering payment of a $250,000 penalty); Frederic S. Schadt (final judgment (i) permanently enjoining him from violating Sections 10(b) and 13(d) of the Exchange Act and Rules 10b-5 and 13d-1 thereunder; (ii) ordering disgorgement of $30,305, plus prejudgment interest of $22,617; and (iii) ordering payment of a $30,305 penalty). These settlements conclude the Commission's litigation in this matter.
[See the following related releases: LR No. 14651 (September 26, 1995); In the Matter of Terry R. Kuntz and Richard J. Scheer, Admin. Proc. 3-8831, In the Matter of Richard D. Russell, Administrative Proceeding 3-8830; LR No. 16226 (July 30, 1999); In the Matter of Richard Brewer, Admin. Proc. No. 3-9943 (July 30, 1999)]http://www.sec.gov/litigation/litreleases/lr16964.htm