SECURITIES AND EXCHANGE COMMISSION
LITIGATION RELEASE NO. 16562 / May 23, 2000
SECURITIES AND EXCHANGE COMMISSION v. C. WILLIAM COX
On May 23, 2000,the Commission filed a civil fraud suit against C. William Cox (Cox), the former president and chief executive officer of Intile Designs, Inc., for causing Intile, a publicly traded company, to misstate its accrued expenses and liabilities by as much as 55% and its net income by as much as 46% over a five year period. Cox, age 61, is a resident of Houston, Texas. Intile was an importer and distributor of brick, stone and ceramic building products, and its common stock was quoted on the OTC Bulletin Board under the symbol "IDSN" during the relevant period.
The complaint alleges that Cox single-handedly carried out a scheme to underpay Intile's local property taxes, by underreporting the value of its inventory by 85% - 90% in local tax filings. As a result, Intile underpaid its inventory property taxes by approximately $1,069,000 over the five year period. The complaint further alleges that this underpayment of property taxes caused Intile to understate its accrued expenses and liabilities by as much as 55%, and to overstate its net income by as much as 46%, in periodic reports filed with the Commission during fiscal years 1994 through 1997. Cox signed, and was the company officer responsible for, these misleading periodic reports. Also, as a result of its underpayment of taxes, Intile failed to make and keep books, records and accounts which accurately and fairly reflected the transactions and disposition of its assets.
Simultaneously with the filing of its action, the Commission accepted Cox's offer of settlement in which he agreed, without admitting or denying the allegations in the Commission's complaint, to an injunction prohibiting him from future violations of the antifraud, reporting and books and records provisions of the federal securities laws, and from acting as an officer or director of any public company. Specifically, Cox is permanently enjoined from (i) future violations of 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; (ii) aiding and abetting future violations of Sections 13(a) and 13(b)(2)(A) of the Exchange Act and Rules 12b-20, 13a-1 and 13a-13 thereunder, and (iii) acting as an officer or director of any issuer required to file reports pursuant to Sections 12(b), 12(g) or 15(d) of the Exchange Act. A financial civil penalty was not assessed, based on Cox's demonstrated financial inability to pay.
On May 23, 2000, the Commission also instituted cease-and-desist proceedings against Intile and simultaneously accepted Intile's offer of settlement in which it agreed, without admitting or denying the findings in the Commission's order, to cease and desist from future violations of the federal securities laws.http://www.sec.gov/litigation/litreleases/lr16562.htm