UNITED STATES OF AMERICA Before the SECURITIES AND EXCHANGE COMMISSION SECURITIES EXCHANGE ACT OF 1934 Release No. 40181 / July 8, 1998 ACCOUNTING AND AUDITING ENFORCEMENT Release No. 1052 / July 8, 1998 ADMINISTRATIVE PROCEEDING File No. 3-9646 : In the Matter of :ORDER INSTITUTING PUBLIC :PROCEEDINGS AND OPINION AND CHARLES T. YOUNG, CPA, :ORDER PURSUANT TO RULE 102(e) :OF THE COMMISSION'S RULES OF Respondent. :PRACTICE : I. The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest that public administrative proceedings be, and they hereby are, instituted against Charles T. Young ("Young" or "Respondent") pursuant to paragraph (3) of Rule 102(e) of the Commission's Rules of Practice [17 C.F.R.201.102(e)(3)].[1] II. In anticipation of the institution of these proceedings, Young has submitted an Offer of Settlement which the Commission has determined to accept. Solely for the purpose of these proceedings and any other proceeding brought by or on behalf of the Commission or to which the Commission is a party, and without admitting or denying the Commission's findings contained herein, except the Commission's finding that a Final Judgment of Permanent Injunction and Other Equitable Relief has been entered against him as set forth in Paragraph III.C., which is admitted, Young consents to the entry of this Order Instituting Public Proceedings and Opinion Pursuant to Rule 102(e) of the Commission's Rules of Practice ("Order"). III. FINDINGS On the basis of this Order and the Offer of Settlement submitted by Young, the Commission finds[2] that: A.Young, age 53, is and has been a certified public accountant licensed to practice in New York since 1971. He was the senior vice president of finance and then the chief financial officer of Woolworth Corporation ("Woolworth" or the "company"), and a member of its board of directors, at all relevant times.[3] He resigned from Woolworth on May 17, 1994. B.Woolworth Corporation is a Delaware corporation with executive offices in New York, New York. Woolworth is a major general merchandise retailer and also the owner of numerous specialty retailers, including Kinney and Footlocker shoe stores. Woolworth's common stock is registered with the Commission pursuant to Section 12(b) of the Securities Exchange Act of 1934 ("Exchange Act") and listed on the New York Stock Exchange. C.On June 29, 1998, the Commission filed a complaint against Young in SEC v. Charles T. Young and Selig Adler (June 29, 1998, S.D.N.Y.) 98 Civ. 4564 (J. Batts). Young consented to the entry of a Final Judgment of Permanent Injunction and Other Equitable Relief ("Final Judgment"), without admitting or denying the allegations in the complaint, except subject matter jurisdiction, which he admitted. On July 7, 1998, the United States District Court for the Southern District of New York entered the Final Judgment, which permanently enjoins Young from violating Section 10(b) of the Exchange Act and Rules 10b-5, 13b2-1 and 13b2-2 promulgated thereunder and from aiding and abetting violations of Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Rules 12b-20 and 13a-13 thereunder. D.The Commission's complaint filed in SEC v. Charles T. Young and Selig Adler alleges, among other things, that during Woolworth's fiscal year ended January 29, 1994 ("fiscal 1993"), Young participated in a scheme to fraudulently manage the company's reported earnings. The complaint alleges that certain executives at two of Woolworth's major subsidiaries, Kinney Shoe Corporation U.S. and Woolworth Canada, Inc., acting at Young's direction or with his knowledge, improperly inflated Woolworth's profits in certain quarters by understating cost of sales and deferring operating expenses in order to help the company report positive results. According to the complaint, these individuals also made additional improper adjustments to the company's financial statements in subsequent quarters so that the company's results would be accurate by year-end, when it was subject to an audit. The complaint further alleges that Young and these other executives failed to use the best available financial data for quarterly reporting during fiscal 1993. According to the complaint, Young knew, or was reckless in not knowing, that the financial statements contained in Woolworth's Forms 10-Q filed with the Commission during fiscal 1993 were materially false and misleading as a result of this conduct. The complaint further alleges that Young, as an officer of Woolworth, made material misrepresentations or omitted to state certain material information to the company in order to conceal the improper and irregular accounting practices at the company. IV. ORDER IMPOSING SANCTIONS Based on the foregoing, the Commission deems it appropriate and in the public interest to accept the Offer of Settlement submitted by Young and accordingly, IT IS HEREBY ORDERED, effective immediately, that: 1.Young is denied the privilege of appearing or practicing before the Commission. 2.Five years after the effective date of the Commission's Order, Young may apply to resume appearing or practicing before the Commission as: a.a preparer or reviewer of financial statements required to be filed with the Commission or a person responsible for the preparation or review of financial statements required to be filed with the Commission provided that, in Young's practice before the Commission, his work will be reviewed by the independent audit committee of the company or in some other manner acceptable to the staff of the Commission; b.an independent public accountant upon submission of an application to the Office of the Chief Accountant of the Commission containing a showing satisfactory to the Commission that: i.Young, or any firm with which he is or becomes associated with in any capacity, is and will remain a member of the SEC Practice Section of the American Institute of Certified Public Accountants Division for CPA Firms ("SEC Practice Section") as long as Young appears or practices before the Commission as an independent accountant; ii.Young, or any firm with which he is or becomes associated, has received an unqualified report relating to his or its most recent peer review conducted in accordance with the guidelines adopted by the SEC Practice Section; and iii.Young will comply with all applicable SEC Practice Section requirements, including all requirements for periodic peer review, concurring partner reviews, and continuing professional education, as long as he appears or practices before the Commission as an independent accountant. c.The Commission's review of any request or application by Young to resume appearing or practicing before it may include consideration of any other matters relating to Young's character, integrity, professional conduct, or qualifications to appear or practice before the Commission. By the Commission. Jonathan G. Katz Secretary **FOOTNOTES** [1]:Paragraph (3) of Rule 102(e) provides, in pertinent part: The Commission, with due regard to the public interest . . . may . . . suspend from practicing before it any . . . accountant . . . who has been by name . . . permanently enjoined by any court of competent jurisdiction, by reason of his or her misconduct in an action brought by the Commission, from violating . . .any provision of the Federal securities laws or of the rules and regulations thereunder. [2]:The findings herein are made pursuant to Young's Offer of Settlement and are not binding on any other person or entity named as a respondent in this or any other proceeding. [3]:On June 12, 1998, Woolworth changed its name to Venator Group, Inc.