U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 20454 / February 11, 2008
Securities and Exchange Commission v. Bartholomew F. Palmisano, Jr., Civil Action File No. 08-905-B1 (E.D.La February 7, 2008)
The Securities and Exchange Commission ("Commission") announced that on February 7, 2008, it filed a Complaint in the United States District Court for the Eastern District of Louisiana against Bartholomew F. Palmisano, Jr., a resident of Metairie, Lousiana, and former Chief Financial Officer of OCA, Inc. ("OCA").
The Commission's Complaint alleges that during twelve different quarters during 1998 through 2001, Palmisano recorded eighteen fraudulent journal entries on OCA's general ledger that had the cumulative effect of creating approximately $71 million of fictitious revenue. The fictitious revenue created by these journal entries was always at least the amount OCA needed to meet that quarter's Wall Street analysts' consensus earnings per share expectations. The false financial information resulting from Palmisano's misconduct was included in at least twelve Forms 10-Q and four Forms 10K for each of the years ended December 31, 1998 through 2001. In May 2005, Palmisano tried to cover-up his fraud and provided false information and documents in response to an inquiry by OCA's independent auditors concerning a fixed asset balance related to one of the fraudulent journal entries.
Palmisano, without admitting or denying the allegations of the Commission's Complaint, consented to the entry of a proposed Final Judgment, which will permanently enjoin 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, 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, 13a-11 and 13a-13 thereunder. The proposed final judgment will also order Palmisano to pay a civil penalty in the amount of $100,000 plus post-judgment interest, and will bar him from acting as an officer or director of a public company for ten years. The settlement is subject to the Court's approval.