Securities and Exchange Act of 1934
Release No. 41952 / September 30, 1999
Accounting and Auditing Enforcement
Release No. 1189 / September 30, 1999
File No. 3-10057
: In the Matter of : : ORDER INSTITUTING : PROCEEDINGS AND IMPOSING MICHAEL GOLDBERG, CPA, : A SANCTION PURSUANT TO : RULE 102(e) OF THE : COMMISSION'S Respondent. : RULES OF PRACTICE :
The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest that public administrative proceedings be, and hereby are, instituted against Michael Goldberg ("Goldberg") pursuant to Rule 102(e)(3)(i)(A) of the Commission's Rules of Practice.1
In anticipation of the institution of this administrative proceeding, Goldberg has submitted an Offer of Settlement ("Offer"), which the Commission, after due consideration, has determined to accept. Solely for the purpose of this proceeding and any other proceeding brought by or on behalf of the Commission or to which the Commission is a party, and prior to a hearing pursuant to the Commission's Rules of Practice, Goldberg consents to the issuance of this Order Instituting Proceedings And Imposing A Sanction Pursuant To Rule 102(e) Of The Commission's Rules Of Practice ("Order") and to the entry of the findings and imposition of the remedial sanction set forth below, provided that Goldberg neither admits nor denies the findings set forth herein, except as to jurisdiction and the findings set forth in Paragraphs III.A.2. below, which Goldberg admits.
III. Findings and Sanction
On the basis of this Order and the Offer submitted by Goldberg, the Commission finds that:2
1. Goldberg is a certified public accountant and has been licensed by the State of New York since 1988. From September 1993 until May 1996, Goldberg served as Senior Vice President and Chief Financial Officer of Happiness Express, Inc. ("Happiness Express"). As Chief Financial Officer, Goldberg: (a) was responsible for preparing quarterly and annual financial statements; (b) was responsible for preparing all reports filed with the Commission; (c) signed the quarterly and annual financial statements; and, (d) served as the primary contact with the accounting firm that served as Happiness Express's independent auditor.
2. On May 27, 1999, the Commission filed a complaint ("Complaint") against Goldberg and others (SEC v. Sutton, et al., 99 Civ. 3889) in the United States District Court for the Southern District of New York (the "Court"). On June 7, 1999, the Court entered a Final Judgment Of Permanent Injunction And Other Relief Against Defendant Michael Goldberg By Consent("Final Judgment") that, among other things, permanently enjoins Goldberg from violating Sections 10(b) and 13(b)(5) of the Exchange Act and Rules 10b-5, 13b2-1 and 13b2-2. Goldberg consented to the entry of the Final Judgment without admitting or denying the allegations in the Complaint, except as to jurisdiction.
3. By reason of the foregoing, Goldberg has been permanently enjoined from further violations of the federal securities laws.
Based on the foregoing, the Commission deems it appropriate and in the public interest to accept the sanction specified in the Offer submitted by Goldberg, and accordingly,
It is hereby ordered, effective immediately, that Goldberg is denied the privilege of appearing or practicing before the Commission as an accountant.
By the Commission.
Jonathan G. Katz
1 Paragraph (3)(i)(A) of Rule 102(e) provides, in relevant part, as follows:
(3)(i) The Commission, with due regard to the public interest and without preliminary hearing, may by order temporarily suspend from appearing or practicing before it any . . . accountant . . . who . . . has been by name (A) permanently enjoined by any court of competent jurisdiction by reason of his misconduct in an action brought by the Commission from violation . . . any provision of the Federal securities laws (15 U.S.C. §§ 77a to 80b-20) or of the rules and regulations thereunder.
2 These findings are solely for the purpose of these proceedings and are not binding on any other person.