SECURITIES AND EXCHANGE COMMISSION
LITIGATION RELEASE NO. 16431 / February 10, 2000
ACCOUNTING AND AUDITING
ENFORCEMENT RELEASE NO. 1226 / February 10, 2000
SECURITIES AND EXCHANGE COMMISSION v. FABRI-CENTERS OF AMERICA, INC., ROBERT L. NORTON and JOSEPH E. WILLIAMS, Civil Action No. 5:97CV1216 (N.D. Ohio) (filed February 18, 1997)
On February 10, 2000, the Commission issued an Order pursuant to Sections 8A of the Securities Act of 1933 (Securities Act) and 21C of the Securities Exchange Act of 1934 (Exchange Act) against Joseph E. Williams, requiring him to cease and desist from committing or causing violations of, or future violations of Sections 17(a)(2) and (3) of the Securities Act, Section 13(a) of the Exchange Act and Rules 12b-20, 13a-1, 13a-13, and 13b2-1 thereunder. Williams is the former senior vice president and Controller of Fabri-Centers of America, Inc. (Fabri-Centers), now known as Jo-Ann Stores, Inc.
This matter stems from Fabri-Centers' application of the "gross profit method" of accounting during periods immediately before and after a $74.75 million debt offering in March 1992. Williams, without admitting or denying the allegations in the Commission's Order, consented to the entry of the Order finding that he: (1) violated Sections 17(a)(2) and 17(a)(3) of the Securities Act in connection with Fabri-Centers' 1992 year-end Form 10-K and the S-3 Registration Statement for the debt offering; (2) violated Rule 13b2-1 of the Exchange Act by permitting the company's gross profit reserve and earnings to be recorded without properly increasing the gross profit reserve in the first quarter of Fiscal 1993; and (3) caused the company to violate Section 13(a) of the Exchange Act and Rules 13a-1, 13a-13 and 12b-20 thereunder when he reviewed and approved the financial statements for the company's Form 10-K for Fiscal 1992 and for the company's Form 10-Q for the first quarter of Fiscal 1993.
As part of the settlement, Williams has consented to the entry of a court order requiring him to pay a $25,000 civil penalty, $23,640.00 in disgorgement and $20,976.33 in prejudgment interest thereon.