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U.S. Securities and Exchange Commission


Litigation Release No. 17586 / June 25, 2002

Accounting and Auditing Enforcement Release No. 1583

SECURITIES AND EXCHANGE COMMISSION V. JOHN N. BRINCAT, Sr. and BRADLEY VALLEM, U.S. District Court for the Northern District of Illinois, Civil Action No. 01 C 2670 (N.D. Ill. January 29, 2002)

The Securities and Exchange Commission announced that an Order of Permanent Injunction And Other Relief (Order) was entered against Bradley Vallem (Vallem), the former Treasurer of Mercury Finance Co. (Mercury), in Securities and Exhange Commission v. John N. Brincat, Sr. and Bradley Vallem, Civil Action No. 01 C 2670 (Northern District of Illinois, Eastern Division). Vallem consented to entry of the Order without admitting or denying any of the allegations made against him in the complaint filed by the Commission. That complaint, filed in April 2001, alleged that in 1996, Vallem signed fraudulent quarterly filings, which overstated Mercury's earnings by millions of dollars. Also named in the suit was John N. Brincat, Sr., former CEO of Mercury.

Specifically, the Commission's complaint alleges that in early 1996, Vallem learned that Mercury employees falsified a bank statement to cover up a sham transaction that affected Mercury's reported commercial paper balance. Despite his knowledge of this and other wrongdoing, Vallem signed fraudulent quarterly filings in May, August and October of 1996.

The Honorable James B. Zagel of the United States District Court for the Northern District of Illinois entered the Order enjoining Vallem from further violations of Sections 17(a)(1) and (a)(3) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder. The Order against Vallem also imposed a civil penalty of $50,000.


Modified: 06/26/2002