U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 20446 / February 1, 2008
Accounting and Auditing Enforcement Release No. 2780 / February 1, 2008
United States Securities and Exchange Commission v. James Charles Blue, Randy Cook, and Victor Campbell, 07-cv-00095-REB-MEH (D. Colo. filed January 16, 2007)
RANDY COOK, FORMER PRESIDENT OF UNITED AGRI PRODUCTS NORTH AMERICAN OPERATIONS, SETTLES SEC LITIGATION BY CONSENTING TO A PERMANENT INJUNCTION AND AGREEING TO PAY $367,429.64 IN DISGORGEMENT AND PENALTIES
The U.S. Securities and Exchange Commission (Commission) today announced that, on February 1, 2008, the Commission filed a Consent and proposed settled Final Judgment against Randy Cook, former President of North American Operations of United Agri Products (“UAP”), in United States Securities and Exchange Commission v. James Charles Blue, Randy Cook, and Victor Campbell, 07-cv-00095-REB-MEH (D. Colo. filed Jan. 16, 2007).
The Commission’s Complaint in this case alleged that Cook and his co-defendants, former UAP executives James Charles Blue and Victor Campbell, engaged in misconduct at UAP, a former subsidiary of ConAgra Foods, Inc., which resulted in the overstatement of UAP’s operating results in 1999 and 2000. Specifically, the Complaint alleged that Cook participated in improper accounting practices at UAP, including: (1) the improper recognition of revenue from deferred delivery sales and associated rebates from UAP’s suppliers; (2) the failure to record bad debt expenses when realized; and (3) the improper recognition of revenue from advance vendor rebates. As alleged, Cook’s misconduct caused ConAgra, UAP’s parent, to file materially false and misleading financial statements with the Commission in the company’s annual reports for 1999 and 2000. According to the Complaint, Cook obtained inflated bonus and other profit-based compensation as a result of his misconduct.
Cook, without admitting or denying the allegations in the Commission’s Complaint, consented to the entry of a Final Judgment which would order Cook to pay $191,635 in disgorgement and pre-judgment interest thereon in the amount of $140,794.64, together with a civil money penalty in the amount of $35,000. The proposed Final Judgment also will permanently enjoin him from violating the internal controls and books and records provisions of the federal securities laws (Sections 13(b)(5) of the Securities Exchange Act of 1934 (Exchange Act) and Exchange Act Rule 13b2-1), and from aiding and abetting violations of the reporting, books and records, and internal controls provisions of the Exchange Act (Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Exchange Act Rules 12b-20 and 13a-1). The SEC has moved to dismiss with prejudice the charges against Cook for violating and aiding and abetting violations of Exchange Act Section 10(b) and Rule 10b-5 contingent on entry of the Final Judgment and Cook’s compliance with its terms and conditions. The settlement is subject to the Court’s approval.
Cook’s co-defendants, James Charles Blue, the former President and Chief Operating Officer of ConAgra Agri Products Companies, and Victor Campbell, UAP’s former Controller, previously agreed to settle the Commission’s action without admitting or denying the allegations in the Complaint, and final judgments were entered as to them on January 17, 2007.
See also Litigation Release No. 19969 (January 17, 2007).