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U.S. Securities and Exchange Commission

Litigation Release No. 18908 / September 28, 2004

Accounting and Auditing Enforcement Release No. 2113 / September 28, 2004

Securities and Exchange Commission v. Don-Allen Ruttenberg, United States District Court for the Northern District of Alabama, Civil Action No. CV-04-P-0371-S (NDAL)

On September 24, 2004, the Honorable R. David Proctor, U. S. District Judge for the Northern District of Alabama, entered a Final Judgment as to defendant Don-Allen Ruttenberg, a former Executive Vice-President of Just for Feet, Inc., a large shoe and sports apparel retailer formerly headquartered in Birmingham, Alabama. The judgment enjoined Ruttenberg from further violations of Section 17(a) of the Securities Act of 1933, Sections 10(b) and 13(b)(5) of the Securities Exchange Act of 1934 and Rules 10b-5, 13b2-1 and 13b2-2 thereunder and his aiding and abetting violations of Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Rules 12b-20, 13a-1 and 13a-13 thereunder. Ruttenberg consented to the entry of the judgment without admitting or denying any of the allegations of the Commission's Complaint. The court also ordered Ruttenberg to pay disgorgement of $40,000, together with prejudgment interest of $17,294.97. Ruttenberg was furthered ordered to pay a civil penalty of $50,000 and was prohibited from acting as an officer or director of any issuer that has a class of registered securities.

The Complaint alleged that, in connection with the audit of Just for Feet, Inc.'s fiscal 1998 financial statements in the spring of 1999, Ruttenberg caused vendors to provide fraudulent confirmations used to confirm the validity of unearned receivables Just for Feet had recognized from its vendors. The complaint also alleged that Ruttenberg caused vendors to provide other confirmations that were fraudulently used to confirm the validity of income Just for Feet had improperly recognized through the acquisition of merchandise display booths from its vendors. The overstatement of income and assets resulting from this misconduct was reflected on Just for Feet's financial statements included in its Form 10-K filed for fiscal year 1998, Forms 10-Q filed for the first and second quarters of fiscal year 1999, and in its registration statements on Forms S-8 and S-4 filed in May and June of 1999, respectively.

See also: L.R. 18139 / May 15, 2003; L.R. 18571 / February 6, 2004; L.R. 18575 / February 13, 2004; L.R. 18595 / February 25, 2004; and AAER No. 1964 / February 25, 2004



Modified: 09/29/2004