Litigation Release No. 17309 / January 14, 2002
Accounting and Auditing Enforcement Release No. 1493 / January 14, 2002
[United States Securities and Exchange Commission v. Michael A. Porter, Case No. 1:02CV00061 (RCL) (D.C.D.C.)].
SEC Sues Texas Businessman For Forgery Of Arthur Andersen Audit Opinion
The Securities and Exchange Commission today filed a Complaint in the United States District Court for the District of Columbia alleging that Michael Porter, the founder and majority shareholder of St2ep LLC, forged an audit opinion and related cover letter of Arthur Andersen LLP in an unsuccessful attempt to consummate a merger between privately-held St2ep and a publicly-traded company, MPM Technologies, Inc.
The Complaint alleges that St2ep of Houston Texas, MPM of Spokane, Washington, and certain other related entities and individuals entered into a written merger agreement pursuant to which MPM was to acquire all of the assets of St2ep. The Complaint alleges that the merger was partly contingent upon St2ep's providing MPM with certified audited statements for calendar year 1999. The Complaint further alleges that in an attempt to consummate the merger between MPM and St2ep, Porter prepared St2ep's 1999 financial statements and then drafted and attached to the financial statements an unqualified audit opinion and cover letter on Arthur Andersen letterhead. According to the Complaint, the financial statements, together with the audit opinion and forged cover letter were then provided to MPM, and MPM's independent auditor contacted Arthur Andersen, which denied having prepared or audited St2ep's financial statements.
Porter, without admitting or denying the allegations of the Complaint, simultaneously consented to the entry of a permanent injunction against violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and agreed to pay a $25,000 civil penalty
 | SEC Complaint in this matter. |