U.S. SECURITIES AND EXCHANGE COMMISSION
LITIGATION RELEASE NO. 18081 / April 10, 2003
ACCOUNTING AUDITING ENFORCEMENT RELEASE NO. 1757 / April 10, 2003
SEC v. JOSHUA C. CANTOR, Civil Action No. 03 CV 2488 (LMM) (S.D.N.Y. April 10, 2003)
SEC FILES SETTLED FINANCIAL FRAUD
The Securities and Exchange Commission today filed a settled civil injunctive action in the United States District Court for the Southern District of New York against Joshua C. Cantor, a former president and director of American Bank Note Holographics, Inc. ("ABNH"), and a former executive vice president of ABNH's parent, American Banknote Corporation ("ABN").
The Complaint against Cantor alleges that, from fiscal year 1996 through fiscal year 1998, Cantor participated in a systematic fraudulent scheme to inflate the revenues and net income of ABN and ABNH, in order to meet earnings forecasts and to condition the market for an initial public offering of stock by ABNH. During the period of the alleged fraud, ABN was a publicly held holding company located in New York, New York, which, through its subsidiaries, provided, among other things, stored-value telephone cards, magnetic-strip transaction cards, printed business forms, and checks. ABNH, located in Elmsford, New York, was, during the same period, engaged in the origination, production, and marketing of mass-produced secure holograms. ABNH was a wholly owned subsidiary of ABN until its initial public offering in July 1998.
The Complaint alleges that:
Cantor, without admitting or denying the allegations in the Commission's Complaint, consented to an order permanently enjoining him from violating and/or aiding and abetting violations of the antifraud, reporting, record keeping, internal controls, and lying to auditors provisions of the federal securities laws, as well as from violating the Foreign Corrupt Practices Act -- Section 17(a) of the Securities Act of 1933, Sections 10(b), 13(a), 13(b)(2)(A) and (B), 13(b)(5), and Section 30A of the Securities Exchange Act of 1934 ("Exchange Act"), and Exchange Act Rules 10b-5, 12b-20, 13a-1, 13a-13, 13b2-1, and 13b2-2. In addition, Cantor consented to a ten year prohibition from acting as an officer or director of a public company.
This is a refiling of earlier charges against Cantor. The Commission had earlier named Cantor as a defendant in a civil injunctive action, (see Litigation Release No. 17068A, July 18, 2001), that was voluntarily dismissed without prejudice on November 15, 2001.
The Commission's investigation that led to this action was conducted in cooperation with the United States Attorney's Office for the Southern District of New York.