Litigation Release No. 19940 / December 11, 2006

SEC v. Dorothy L. Mahler, John W. Bracewell, III, and Patricia L. Jones, Civil Action No. 3:03-CV-1202 (MDTN)

On December 1, 2006, the Honorable John T. Nixon, U. S. District Judge for the Middle District of Tennessee, entered a Final Judgment as to defendant John W. Bracewell III (Bracewell), restraining and enjoining him from future violations of Sections 10(b) and 13(b)(5) of the Securities Exchange Act of 1934 (Exchange Act), and from aiding and abetting violations of Sections 13(a) and 13(b)(2)(A) of the Exchange Act and Rules 10b-5, 12b-20, 13a-1 and 13b2-1 thereunder. Bracewell consented to the entry of the judgment without admitting or denying any of the allegations of the Commission's complaint. Further, the court ordered disgorgement and prejudgment interest against Bracewell in the respective amounts of $4,000 and $830.90.

The complaint alleged that the defendants perpetrated a financial reporting fraud involving the financial statements of Genesco, Inc. (Genesco), a footwear and accessories company headquartered in Nashville, Tennessee. Dorothy L. Mahler, President of Genesco's Johnston & Murphy division, Bracewell, a division vice president, and Patricia L. Jones, the division's Director of Customer Care, caused Genesco to improperly recognize $2.8 million of sales revenue prior to the end of a quarter and in advance of a customer's requested shipping date. The defendants improperly recorded revenue in the quarter to meet sales targets for the quarter. This overstatement of sales and earnings was reflected on Genesco's financial statements included in its Form 10-K for fiscal year 2001.

See also: L.R. 18508 (December 17, 2003); and L.R. 18536 (January 9, 2004).