SECURITIES EXCHANGE ACT OF 1934
RELEASE NO. 41934 / September 28, 1999
ACCOUNTING AND AUDITING ENFORCEMENT
RELEASE NO. 1183 / September 28, 1999
File No. 3-10045 PROCEEDINGS INSTITUTED AGAINST PAUL THOMAS FINK, C.P.A,
On September 28, 1999, the Securities and Exchange Commission instituted public administrative proceedings against Paul T. Fink, the former CFO and later, CEO, of Photran Corp., a manufacturer of high-performance, film-coated glass located in Lakeville, Minnesota. Photran ceased operations in April, 1999 and filed for Chapter 7 bankruptcy protection on May 3, 1999.
In the Order Instituting Proceedings, the Division of Enforcement (the "Division") and the Office of Chief Accountant ("OCA") allege that Fink violated the antifraud and books and records provisions of the federal securities laws by preparing Photran's financial statements and signing the company's registration statement and periodic reports filed with the Commission when he knew or was reckless in not knowing that they contained materially false and misleading financial information. The Division and OCA further allege that Fink knowingly falsified and directly caused false entries to be made in Photran's books and records when he directed a Photran employee to backdate various documents to report a false shipment date that resulted in premature revenue recognition. In addition, the Division and OCA allege that Fink circumvented existing internal accounting controls at Photran by allowing fictitious and premature revenue to be recorded without proper documentation. As a result of this conduct, the Division and OCA allege that Fink violated Section 17(a) of the Securities Act, Sections 10(b) and 13(b)(5) of the Exchange Act and Rules 10b-5, 13b2-1 and 13b2-2 thereunder.
A hearing will be held before an administrative law judge to determine whether the staff's allegations against Fink are true, and if so, what remedial sanctions are appropriate and in the public interest.