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U.S. Securities and Exchange Commission

Litigation Release No. 18242 / July 22, 2003

Accounting And Auditing Enforcement Release No. 1818 / July 22, 2003

Securities and Exchange Commission v. Jay Gilbertson, Albert Bergonzi and Dominick Derosa, Case No. 00-3570 MJJ (N.D. Cal.)

Court Accepts Settlements of Commission's Financial Fraud Claims Against Former HBO and Company Officers

The Securities and Exchange Commission announced that Judge Martin J. Jenkins in San Francisco entered judgments against Jay Gilbertson and Dominick DeRosa on July 1 and July 3, 2003, respectively. The court enjoined both Gilbertson, a former Co-President and Chief Financial Officer of HBO and Company ("HBOC"), and DeRosa, a former HBOC Executive Vice President for Enterprise Sales, from future violations of the federal securities laws noted below and from serving as a director or officer of any public reporting company. The court also ordered Gilbertson to disgorge $733,360, plus prejudgment interest, and to pay a civil penalty of $1,000,000. The court ordered DeRosa to disgorge $325,312, plus prejudgment interest, and to pay a civil penalty of $50,000.

Both judgments were the result of settlements in which Gilbertson and DeRosa, without admitting or denying the allegations in the Commission's complaint, consented to the entry of judgments against them. The Commission had alleged that Gilbertson, DeRosa and other officers of HBOC misrepresented HBOC's sales revenue, expenses and income by making false entries in the company's accounting records and hiding the terms of sales contracts in side letters to make the sales appear eligible for revenue recognition. The action is still pending against Albert Bergonzi, Co-President of HBOC and subsequently President of the HBOC division of McKesson Corporation.

The judgments enjoined Gilbertson and DeRosa from future violations of Section 17(a) of the Securities Act of 1933 and Sections 10(b), 13(b)(5) of the Securities Exchange Act of 1934, Rule 13b2-1 and, as to Gilbertson, Rule 13b2-2.



Modified: 07/24/2003