U.S. Securities and Exchange Commission

Litigation Release No. 18595 / February 25, 2004

Accounting and Auditing Enforcement Release No. 1964 / February 25, 2004

SECURITIES AND EXCHANGE COMMISSION v. Don-Allen Ruttenberg,
Civil Action No. CV-04-P-0371-S (N.D.Al.).

On February 25, 2004, the Securities and Exchange Commission filed a complaint in the U.S. District Court for the Northern District of Alabama against Don-Allen Ruttenberg, a former Executive Vice-President of Just for Feet, Inc., a large shoe and sports apparel retailer formerly headquartered in Birmingham, Alabama. The Complaint alleges that, in connection with the audit of Just for Feet's fiscal 1998 financial statements in the spring of 1999, Ruttenberg was instrumental in the acquisition of fraudulent confirmations used to confirm the validity of unearned receivables Just for Feet had recognized from its vendors. The complaint also alleges that Ruttenberg played a role in obtaining other confirmations that were fraudulently used to confirm the validity of income Just for Feet had improperly recognized through the acquisition of merchandise display booths from its vendors. The overstatement of income and assets resulting from this misconduct was reflected on Just for Feet's financial statements included in its Form 10-K filed for fiscal year 1998, Forms 10-Q filed for the first and second quarters of fiscal year 1999, and in its registration statements on Forms S-8 and S-4 filed in May and June of 1999, respectively.

The Complaint seeks a permanent injunction enjoining Ruttenberg from further Section 17(a) of the Securities Act of 1933 and Sections 10(b) and 13(b)(5) of the Securities Exchange Act of 1934 and Rules 10b-5, 13b2-1 and 13b2-2 thereunder and his aiding and abetting violations by Just for Feet of Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Rules 12b-20, 13a-1 and 13a-13 thereunder. In addition, the Complaint seeks an award of disgorgement, prejudgment interest thereon and a civil penalty.

Also on this date, the United States Department of Justice and the Office of the U.S. Attorney for the Northern District of Alabama unsealed an information containing criminal charges against Ruttenberg in this matter. Ruttenberg has agreed to plead guilty to the charges.

The Commission acknowledges the assistance of the United States Department of Justice, the Office of the U.S. Attorney for the Northern District of Alabama and the Alabama Securities Commission in this matter. The Commission's investigation is continuing.

See also: L.R. 18575 (February 13, 2004); L.R. 18571 (February 6, 2004); L.R. 18139 (May 15, 2003).

SEC Complaint in this matter