U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 18536 / January 9, 2004
Accounting and Auditing Enforcement
Release No. 1939 / January 9, 2004
Securities and Exchange Commission v. Dorothy L. Mahler, John W. Bracewell, III, and Patricia L. Jones Civil Action No. 3:03-CV-1202 (MDTN)
On December 23, 2003, the Honorable John T. Nixon, U. S. District Judge for the Middle District of Tennessee, entered Final Judgments as to defendants Dorothy L. Mahler (Mahler) and Patricia L. Jones (Jones), restraining and enjoining them from further 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. Mahler and Jones consented to the entries of the judgments without admitting or denying any of the allegations of the Commission's complaint. Further, the court ordered disgorgement and prejudgment interest against Mahler in the respective amounts of $17,675 and $2,300, ordered Mahler to pay a civil penalty of $25,000, and barred Mahler from serving as an officer or director of a public company for ten years.
The complaint alleges 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. Mahler, President of Genesco's Johnston & Murphy division, Bracewell, a division vice president, and 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)