U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 20025 / March 1, 2007
Accounting and Auditing Enforcement Release No. 2568 / March 1, 2007
SEC v. Leonard M. Snyder, H. Dane Reynolds, C. Burt Duren, and Carey Johnson, Civil Action No. 7:05-2471-RBH (D.S.C.)
The Securities and Exchange Commission announced that on March 1, 2007, the Honorable R. Bryan Harwell, United States District Judge for the District of South Carolina, entered a Final Judgment as to Defendant C. Burt Duren, enjoining him from future violations of Section 17(a) of the Securities Act of 1933 and Sections 10(b) and 13(b)(5) of the Securities Exchange Act of 1934 ("Exchange Act") and Rules 10b-5, 13a-14, 13b2-1 and 13b2-2 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, 13a-1 and 13a-13 thereunder. Duren consented to the entry of the judgment without admitting or denying the allegations of the Commission's Complaint. The court ordered a civil penalty against Duren in the amount of $35,000, and prohibited Duren from acting as an officer or director of any issuer that has a class of registered securities for a period of five years.
The Commission's Complaint, filed on August 25, 2005, alleged that, during the period from late 2002 through December 2003, Duren and the other defendants caused One Price Clothing Stores, Inc. ("One Price") to misrepresent in its Commission filings that it was in compliance with its credit facility, on which the company relied to provide cash for its operations. The Complaint further alleged that One Price was actually in default because the defendants caused the company to artificially inflate its inventory levels, which collateralized its debt, in weekly reports to its lender. The Complaint also alleged that One Price filed false and misleading periodic reports with the Commission because the inflated inventory levels were included in the financial statements that were filed with those reports.