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U.S. Securities and Exchange Commission


LITIGATION RELEASE NO. 17877 / December 6, 2002


Securities and Exchange Commission v. Leah Industries, Inc., et al., Civil Action No. 00-B-1921 (PAC) (D. Colo.)

The Securities and Exchange Commission announced today that on November 22, 2002, the Honorable Lewis T. Babcock, Chief Judge of the United States District Court for the District of Colorado, entered final judgments against defendants Birte Boock and Irwin Boock of Toronto, Ontario, Canada.

Without admitting or denying the allegations in the Commission's complaint, defendants consented to the entry of final judgments permanently enjoining them from violating Section 17(a) of the Securities Act of 1933 ("Securities Act"), Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act"), and Rule 10b-5 thereunder. The judgments also ordered the Boocks to pay civil monetary penalties of $50,000 each, and ordered Irwin Boock to pay disgorgement of $379,619, representing $323,443 in proceeds from his sales of Leah Industries, Inc. ("Leah") stock plus prejudgment interest of $56,176.

In its complaint filed on September 28, 2000, the Commission alleged that during 1998 and 1999 Leah, its CEO Birte Boock, and its de facto control person Irwin Boock violated the antifraud provisions of the federal securities laws by making material misrepresentations to investors concerning Leah's purported relationship with two Big Five accounting firms. Specifically, during an investor conference call on August 20, 1998, Birte Boock misrepresented that Leah had retained Coopers & Lybrand (now PricewaterhouseCoopers) to serve as its auditor when, in fact, Coopers & Lybrand never agreed to serve as Leah's auditor. The complaint also alleged that Birte and Irwin Boock directed Leah to issue a press release on December 10, 1998 that misrepresented that Leah had retained Deloitte & Touche as its auditor. Further, the Boocks directed Leah to issue a press release on December 23, 1998 announcing earnings for the nine months ended September 30, 1998 of $28.5 million before special charges of $27 million, and representing that Deloitte & Touche concurred with Leah's decision to incur the special charges and to report the most conservative financial picture possible. The complaint alleged that the December 10 and 23, 1998 press releases were false because Leah never retained Deloitte & Touche as its auditor, and Deloitte & Touche never provided any accounting services to Leah or concurred with Leah's financial reporting decisions. Finally, the complaint alleged that while Leah and the Boocks were disseminating this false information, Irwin Boock sold 540,000 shares of Leah stock generating proceeds of $323,443.

Previously, on September 6, 2002, Judge Babcock entered a default final judgment permanently enjoining Leah from violating Section 17(a) of the Securities Act, Section 10(b) of the Exchange Act, and Rule 10b-5, and ordering Leah to pay $41,526, representing disgorgement of $30,724 in proceeds from the sale of Leah stock plus prejudgment interest of $10,802.

The Commission also announced today that it simultaneously instituted and settled administrative proceedings against Birte and Irwin Boock. The Boocks consented to the entry of an Order, pursuant to Section 15(b)(6) of the Exchange Act, finding that they participated in a penny stock offering of Leah stock, and barring the Boocks from participating in any offering of a penny stock. See Securities Exchange Act Release No. .

For information about earlier developments in this matter, see Litigation Release No. 16738 (Sept. 28, 2000) and Trading Suspension Release No. 34-41162 (Mar. 11, 1999).



Modified: 12/06/2002