U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 20975 / March 27, 2009
Accounting and Auditing Enforcement Release No. 2955 / March 27, 2009
Securities and Exchange Commission v. Delphi Corporation, Judith Kudla, et al., 06-CV-14891-AC-SDP (E.D. Mich.) (filed October 30, 2006)
SEC SETTLES WITH DEFENDANT IN DELPHI ACCOUNTING FRAUD CASE
The Securities and Exchange Commission today announced settlement of pending charges against Judith Kudla, the former Director of Finance in the information technology ("IT") department of Delphi Corporation. On March 26, 2009, United States District Judge Avern Cohn entered a Final Judgment by consent enjoining Kudla from future violations of Section 17(a) of the Securities Act of 1933 ("Securities Act") and Sections 10(b) and 13(b)(5) of the Securities Exchange Act of 1934 ("Exchange Act") and Rules 10b-5 and 13b2-1 thereunder, and 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 and13a-1 thereunder. Kudla was also ordered to pay a $30,000 civil money penalty. Kudla settled the Commission's claims without admitting or denying the Commission's allegations. In addition, separately, without admitting or denying the Commission's findings, Kudla consented to the institution of administrative proceedings pursuant to Rule 102(e)(3) of the Commission's Rules of Practice, suspending her from appearing or practicing before the Commission as an accountant, with a right to re-apply after three years, based on the entry of the injunction.
The Commission's complaint against Kudla alleged that as a result of her participation in a fraudulent scheme, Delphi filed materially false and misleading financial statements in the company's 2001 Form 10-K. According to the Complaint, Delphi improperly recorded a $20 million payment from an IT company in December 2001, made in connection with a new contract between the IT company and Delphi. The scheme in which Kudla participated was one of four schemes alleged in the Commission's complaint.
The litigation against six individual defendants continues.
Additional materials: Litigation Release No. 19891 (October 30, 2006); Accounting and Auditing Release Nos. 2500 (October 30, 2006), 2501 (October 30, 2006), 2502 (October 30, 2006), 2503 (October 30, 2006), 2791 (February 26, 2008), and 2792 (February 26, 2008)