UNITED STATES SECURITIES AND EXCHANGE COMMISSION
LITIGATION RELEASE NO. 18017 / March 6, 2003
ACCOUNTING AND AUDITING ENFORCEMENT
SECURITIES AND EXCHANGE COMMISSION v. A. ROBERT MANCUSO, RONALD R. LANCHONEY, AND SHAMIR A. ALLY, Case No. 03-1220 (E.D. Pa.)
The Securities and Exchange Commission ("Commission") announced that it filed a complaint seeking injunctive and other relief against A. Robert Mancuso, Ronald R. Lanchoney and Shamir A. Ally, all Pennsylvania residents. Simultaneously with the filing of the complaint, the Commission filed the defendants' consents to the entry of permanent injunctions and other relief as detailed below. The Commission's complaint alleged that Mancuso, Lanchoney and Ally, former officers or employees of Acrodyne Communications, Inc. ("Acrodyne"), were involved in Acrodyne's dissemination of false financial information in press releases and Commission filings in 1998, 1999 and 2000. The Commission alleged that Mancuso (Acrodyne's former CEO and president), Lanchoney (Acrodyne's former CFO), and Ally (Acrodyne's former controller) were aware of numerous and significant problems with Acrodyne's accounting controls, but failed to assure that Acrodyne's financial transactions were accurately recorded. The Commission claimed that, as a result of the actions of Mancuso, Lanchoney and Ally, Acrodyne engaged in inaccurate and improper cost accounting and revenue recognition. The Commission also alleged that, starting in the second quarter of 1999 and continuing through the first quarter of 2000, Ally directed that unsupported journal entries be made to the cost of sales and inventory accounts to bring Acrodyne's financial statements in line with the gross margin percentage he had estimated for period. The Commission claimed that Mancuso approved these fraudulent adjustments for the first quarter of 2000. Finally, the Commission claimed that Mancuso recklessly provided false information to Acrodyne's auditors relating to Acrodyne's guarantee of a customer's debt.
Each defendant consented to the entry of a permanent injunction prohibiting future violations of Sections 10(b) and 13(b)(5) of the Exchange Act of 1934 ("Exchange Act") and Rules 10b-5 and 13b2-1 thereunder, and future aiding and abetting violations of Sections 13(a) and 13(b)(2) of the Exchange Act and Rules 12b-20, 13a-1, and 13a-13. The injunction to which Mancuso consented would also prohibit him from committing future violations of Rule 13b2-2 under the Exchange Act. Mancuso and Lanchoney also consented to a bar prohibiting them from acting as an officer or director of any issuer that has a class of securities registered pursuant to Section 12 of the Exchange Act or that is required to file reports pursuant to Section 15(d) of the Exchange Act. Mancuso, Lanchoney and Ally further agreed to pay civil penalties of $50,000, $10,000 and $10,000, respectively. In making his offer of settlement, Lanchoney submitted sworn financial statements to the Commission demonstrating that he could not pay a larger penalty.
In a related matter, the Commission ordered Acrodyne to cease-and-desist from future violations of the antifraud, periodic reporting and books and records provisions of the Exchange Act.