UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 17836 / November 14, 2002
Accounting Auditing Enforcement Release No. 1663 / November 14, 2002
Former Sunbeam VP of Sales, Lee Griffith;
Consents to Fraud Injunction and Civil Monetary Penalties
Securities and Exchange Commission v. Albert Dunlap et al., Civil Action No. 01-8437-CIV-(Middlebrooks)(S.D. Fla.)
On November 7, 2002, Judge Donald Middlebrooks of the U.S. District Court for the Southern District of Florida entered a final judgment against Lee Griffith, Sunbeam Corporation's former VP of Sales. Griffith consented to the entry of the final judgment against him in litigation brought by the Securities and Exchange Commission. Without admitting or denying the allegations in the Commission's complaint, Griffith agreed to the entry of a judgment: (1) permanently enjoining him from violating or aiding and abetting violations of the antifraud, reporting, books and records, and internal controls provisions of the federal securities laws, and (2) requiring him to pay a civil penalty of $75,000.
According to the Commission's Complaint, Griffith, together with others, employed improper accounting techniques and undisclosed non-recurring transactions to misrepresent Sunbeam's results of operations. As a result, the complaint alleges, Sunbeam's financial statements and press releases reporting 1996 year-end results, quarterly and year-end 1997 results, and first-quarter 1998 results were materially false and misleading.
The consent judgment requires Griffith to pay a $75,000 civil penalty and enjoins him from violating the anti-fraud provisions of the Securities Act of 1933 (Section 17(a)) and violating or aiding and abetting violations of the antifraud provisions of the Exchange Act of 1934 (Section 10(b) and Rule 10b-5 thereunder), the reporting provisions (Section 13(a) of the Exchange Act and Rules 12b-20, 13a-1 and 13a-13 thereunder), and the books and records and internal controls provisions (Sections 13(b)(2)(A), 13(b)(2)(B) and 13(b)(5) of the Exchange Act and Rules 13b2-1 and 13b2-2 thereunder). The Commission did not seek an officer and director bar against Griffith.
Recently, the Commission settled its action against Albert Dunlap, Sunbeam's former Chairman and CEO and Russell Kersh, its former Chief Financial Officer. The Commission's action remains pending against two other former officers of Sunbeam, Robert J. Gluck and Donald R. Uzzi, and against Phillip Harlow, the audit partner on the Arthur Andersen engagements to audit Sunbeam's 1996, 1997 and 1998 year-end financial statements. Trial is scheduled for January 2003.
See also Lit. Release No. 17710 (September 4, 2002) and Lit. Release No. 17001 (May 15, 2001).