U.S. Securities & Exchange Commission
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U.S. Securities and Exchange Commission

SEC Open Meeting Agenda
Monday, May 23, 2005, 10:00 a.m.

Agenda as of May 20, 2005. Note that Open Meeting agendas are subject to last-minute changes.

Item 1: Rita J. McConville
Office:  Office of the General Counsel

Item 1: Rita J. McConville

The Commission will hear oral argument on an appeal by Rita J. McConville from the decision of an administrative law judge. The administrative law judge found that McConville, formerly the chief financial officer of Akorn, Inc. ("Akorn"), had significant responsibility for the financial statements in the Form 10-K for the year ended December 31, 2000 (the "2000 Form 10-K") filed by Akorn, which materially inflated Akorn's accounts receivable, net sales, and assets; caused Akorn to maintain inaccurate books and records; and falsely assured Akorn's auditors that the financial statements in the 2000 Form 10-K complied with Generally Accepted Accounting Principles and that she did not know of any events that would materially impact those financial statements. In so doing, the law judge found, McConville violated 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 caused Akorn to violate Sections 13(a) and 13(b)(2) of the Exchange Act and Rules 12b-20 and 13a-1 thereunder. The law judge ordered McConville to cease and desist from violating and causing violations of these provisions, and to pay disgorgement in the amount of $115,858, plus prejudgment interest.

Among the issues likely to be argued are:

  1. whether McConville's involvement in the preparation and filing of the 2000 Form 10-K was sufficient to provide a basis for liability;
  2. whether McConville knew that Akorn did not have a system of internal accounting controls for its accounts receivable necessary for the preparation of accurate financial statements and knowingly failed to implement such a system;
  3. whether the Order Instituting Proceedings gave McConville adequate notice of the claims lodged against her and the grounds on which those claims allegedly rested;
  4. whether a cease-and-desist order against McConville is in the public interest; and
  5. whether disgorgement should be ordered, and if so, in what amount.

For further information, please contact the Office of the Secretary at 202 942-7070.



Modified: 05/20/2005