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U.S. Securities and Exchange Commission

Before the

Release No. 50134 / August 2, 2004

Release No. 2070 / August 2, 2004

Admin. Proc. File No. 3-11571

In the Matter of






The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest that public administrative proceedings be, and hereby are, instituted against William F. Buettner ("Respondent" or "Buettner") pursuant to Rule 102(e)(3)(i) of the Commission's Rules of Practice.1


In anticipation of the institution of these proceedings, Respondent has submitted an Offer of Settlement (the "Offer") that the Commission has determined to accept. Solely for the purpose of these proceedings and any other proceedings brought by or on behalf of the Commission, or to which the Commission is a party, and without admitting or denying the findings herein, except as to the Commission's jurisdiction over him and the subject matter of these proceedings, and the entry of the injunction set forth in Section III.E. below, which are admitted, Respondent consents to the entry of this Order Instituting Administrative Proceedings Pursuant to Rule 102(e) of the Commission's Rules of Practice, Making Findings, and Imposing Remedial Sanctions ("Order"), as set forth below.


On the basis of this Order and Respondent's Offer, the Commission finds that:

A. Buettner, age 53, is an inactive certified public accountant licensed in the Commonwealth of Pennsylvania. Buettner was an engagement partner on Coopers & Lybrand, L.L.P.'s ("Coopers") independent audits of Allegheny Health, Education and Research Foundation ("AHERF") for fiscal years 1989 through 1992 and sole engagement partner from 1992 through 1997. Buettner retired from Coopers, now PricewaterhouseCoopers, L.L.P. in 2000.

B. AHERF was a Pennsylvania non-profit healthcare organization formed in 1983. Through, at least, July 1998, AHERF was the parent holding company and sole member or owner of numerous subsidiaries.2 On July 21, 1998, AHERF instituted bankruptcy proceedings under Chapter 11 of the United States Bankruptcy Code on behalf of itself and four of these subsidiaries in the U.S. District Court for the Western District of Pennsylvania.

C. As an umbrella holding company, AHERF managed and provided centralized corporate support services for subsidiaries that it acquired, but did not assume liability for their pre-existing debt. The obligation to repay debt within AHERF was the responsibility of one or more of its non-profit subsidiaries known as "obligated groups." By 1997, AHERF had five obligated groups. By the time of the bankruptcy in July 1998, AHERF's obligated groups were responsible for, at least, thirteen bond issues, with outstanding debt of more than $900 million.

D. On November 5, 2002, the Commission filed a Second Amended Complaint (the "Complaint") against Buettner and others in the United States District Court for the Eastern District of Pennsylvania. SEC v. William F. Buettner, et al., Civil Action No. 01-CV-3898 (E.D. Pa.). The Commission's Complaint alleges that, during 1997, AHERF had engaged in a scheme to conceal its deteriorating financial condition by fraudulently transferring $99.6 million of reserves from the books of one AHERF-related entity to the books of a group of AHERF-related entities collectively known as the Delaware Valley Obligated Group. The Complaint also alleges that Buettner knew or should have known that AHERF had improperly created and/or transferred certain reserves and that he knowingly or recklessly failed to conclude that 1997 income was overstated on both the 1997 AHERF consolidated financial statements and the 1997 Delaware Valley consolidating schedules. The Complaint alleges that Buettner participated in the creation and issuance of, and failed to correct the unqualified audit report on AHERF's 1997 consolidated financial statements and the report on AHERF's 1997 supplementary consolidating and combining financial information. The Complaint alleges that these reports materially misstated that the 1997 audit was conducted in accordance with Generally Accepted Auditing Standards ("GAAS") and that the financial statements fairly presented AHERF's financial condition in conformity with Generally Accepted Accounting Principles ("GAAP"). The Complaint also alleges that the reports misrepresented that the supplementary consolidating and combining financial information was fairly stated in all material respects in relation to the consolidated financial statements taken as a whole. The Complaint further alleges that, for its fiscal year 1997, AHERF reported net income when, in reality, it was operating at a substantial net loss.

E. On July 28, 2004, the United States District Court for the Eastern District of Pennsylvania entered a final judgment permanently enjoining Buettner from violating Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. Buettner consented to the entry of the final judgment without admitting or denying the allegations in the Commission's Second Amended Complaint.


In view of the foregoing, the Commission deems it appropriate and in the public interest to impose the sanction agreed to in Respondent Buettner's Offer.

Accordingly, it is hereby ORDERED, effective immediately, that:

A. Buettner is suspended from appearing or practicing before the Commission as an accountant.

B. After four (4) years from the date of this Order, Respondent may request that the Commission consider his reinstatement by submitting an application (attention: Office of the Chief Accountant) to resume appearing or practicing before the Commission as:

1. a preparer or reviewer, or a person responsible for the preparation or review, of any public company's financial statements that are filed with the Commission. Such an application must satisfy the Commission that Respondent's work in his practice before the Commission will be reviewed either by the independent audit committee of the public company for which he works or in some other acceptable manner, as long as he practices before the Commission in this capacity; and/or

2. an independent accountant. Such an application must satisfy the Commission that:

  1. Respondent, or the public accounting firm with which he is associated, is registered with the Public Company Accounting Oversight Board ("Board") in accordance with the Sarbanes-Oxley Act of 2002, and such registration continues to be effective;
  2. Respondent, or the registered public accounting firm with which he is associated, has been inspected by the Board and that inspection did not identify any criticisms of or potential defects in the Respondent's or the firm's quality control system that would indicate that the Respondent will not receive appropriate supervision or, if the Board has not conducted an inspection, has received an unqualified report relating to his, or the firm's, most recent peer review conducted in accordance with the guidelines adopted by the former SEC Practice Section of the American Institute of Certified Public Accountants Division for CPA Firms or an organization providing equivalent oversight and quality control functions;
  3. Respondent has resolved all disciplinary issues with the Board, and has complied with all terms and conditions of any sanctions imposed by the Board (other than reinstatement by the Commission); and
  4. Respondent acknowledges his responsibility, as long as Respondent appears or practices before the Commission as an independent accountant, to comply with all requirements of the Commission and the Board, including, but not limited to, all requirements relating to registration, inspections, concurring partner reviews and quality control standards.

C. The Commission will consider an application by Respondent to resume appearing or practicing before the Commission provided that his state CPA license is current and he has resolved all other disciplinary issues with the applicable state boards of accountancy. However, if state licensure is dependant on reinstatement by the Commission, the Commission will consider an application on its other merits. The Commission's review may include consideration of, in addition to the matters referenced above, any other matters relating to Respondent's character, integrity, professional conduct, or qualifications to appear or practice before the Commission.

By the Commission.

Jonathan G. Katz


The Commission, with due regard to the public interest and without preliminary hearing, may, by order, . . . suspend from appearing or 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 or aiding and abetting the violation of any provision of the Federal securities laws or of the rules and regulations thereunder.


Modified: 08/02/2004