U.S. Securities and Exchange Commission
LITIGATION RELEASE NO. 22060 / August 4, 2011
ACCOUNTING AND AUDITING ENFORCEMENT RELEASE NO. 3311 / August 4, 2011
JUDGMENT OF PERMANENT INJUNCTION AND OTHER RELIEF ENTERED AGAINST DEFENDANT KARLHEINZ REDEKOPP AND ORDER INSTITUTING ADMINISTRATIVE PROCEEDINGS, MAKING FINDINGS AND IMPOSING SANCTIONS
Securities and Exchange Commission v. Karlheinz Redekopp, Civil Action No. 3:10-cv-05557-RBL (W.D. Wash.)
The United States Securities and Exchange Commission ("Commission") announced that on July 26, 2011, the Honorable Ronald B. Leighton, United States District Court Judge for the Western District of Washington, entered a judgment of permanent injunction against Defendant Karlheinz Redekopp.
The final judgment enjoins Redekopp from violating 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 and 13b2-1 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. Additionally, the final judgment bars Redekopp from serving as an officer or director of a public company for five years pursuant to Section 21(d)(2) of the Exchange Act.
On August 9, 2010, the Commission filed its complaint against Redekopp, who lives in Vancouver, B.C. The complaint alleges that Redekopp, the former CFO of International Commercial Television Inc. ("ICTV"), turned millions of dollars of quarterly losses into profits by falsely accounting for ICTV's sales of the Derma Wand, a skin care appliance that purports to reduce wrinkles and improve skin appearance. Redekopp improperly recognized revenue before the Home Shopping Network had actually sold or delivered the product to viewers. The complaint also alleges that Redekopp recorded "sales" of products that had not been shipped or that the customer was not obligated to pay for. Redekopp's fraudulent accounting resulted in ICTV adjusting net sales by more than $3.7 million over a five-quarter period in 2007 and 2008, negating all originally reported net income for those periods to restated net losses.
In addition to the relief described above, Redekopp consented to the entry of an order, without admitting or denying any of the findings in the Order, in a separate Commission administrative proceedings suspending him, pursuant to Rule 102(e) of the Commission's Rules of Practice, from appearing or practicing as an accountant before the Commission with the right to apply for reinstatement after three years.
For more information on earlier actions in this case, see LR-21622 (August 9, 2010)