SEC v. Collins & Aikman Corporation, et al.
Case No. 07-cv-02419-SAS (E.D.N.Y.)
On March 26, 2007, the Commission filed a complaint (the “Complaint”) against Collins & Aikman Corporation (“C&A”), David A. Stockman (“Stockman”), J. Michael Stepp (“Stepp”), Gerald E. Jones (“Jones”), David R. Cosgrove (“Cosgrove”), Elkin B. McCallum (“McCallum”), Paul C. Barnaba (“Barnaba”), John G. Galante (“Galante”), Christopher M. Williams (“Williams”), and Thomas V. Gougherty (“Gougherty”) (collectively, the “Defendants”). The Complaint alleged that, between 2001 and 2005, C&A and several of its former officers and employees, including its Chief Executive Officer, Stockman, engaged in pervasive accounting fraud. See Complaint.
On March 30, 2007, the Court entered a final judgment against C&A permanently enjoined it from violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. See C&A’s Final Judgment.
On April 20, 2010, the Court entered final judgments against Cosgrove, McCallum, Stepp, and Barnaba, in which each were ordered to pay civil penalties to the U.S. Treasury. See Cosgrove’s Final Judgment; McCallum’s Final Judgment; Stepp’s Final Judgment; and Barnaba’s Final Judgment. The Court also entered a Stipulation dismissing Jones, Galante, Williams, and Gougherty with prejudice.
Lastly, on April 20, 2010, Stockman was ordered to pay, and has paid, a total of $2,800,000.00 in disgorgement, prejudgment interest, and penalties to the Court Registry Investment System (“CRIS”). The Clerk was ordered to hold the funds in an interest bearing account with the CRIS (collectively, the “Fund”), pending further order of the Court. See Stockman’s Final Judgment
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