Post by Sapphire Capital on Sept 5, 2008 21:24:57 GMT 4
U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 20702 / September 4, 2008
Accounting and Auditing Enforcement Release No. 2872 / September 4, 2008
Securities and Exchange Commission v. Mark D. Woodburn and Terry LaCore, Civil Action No. 3:08-cv-1555-G/Northern District of Texas (Dallas Division)
On September 3, 2008, the Commission filed a civil action in the United States District Court for the Northern District of Texas charging two former officers of Natural Health Trends Corp. ("NHT") of Dallas, Texas, with securities fraud and other violations arising from undisclosed related party transactions from 2001 through 2005. The defendants are Mark D. Woodburn, of Southlake, Texas, NHT's former president, director and CFO, and Terry LaCore, of Flower Mound, Texas, the former president of NHT's chief subsidiary and an NHT director.
According to the complaint, from 2001 through August 2005, NHT's top distributor paid Woodburn and LaCore, directly and indirectly, approximately $2.5 million in undisclosed payments. The complaint also alleges that, in February 2004, Woodburn caused NHT to loan $256,200 to a Woodburn family-controlled company, and later took steps to conceal related party nature of the loan when it was discovered by NHT's new accounting management in the fall of 2004. As a result of Woodburn and LaCore's activities, the complaint continues, NHT failed to disclose, or inadequately disclosed, the related party transactions in periodic filings, registration statements, and proxy statements.
Woodburn and LaCore agreed to settle the SEC's charges without admitting or denying the allegations of the complaint. Woodburn agreed to settle charges that he violated Section 17(a) of the Securities Act of 1933 ("Securities Act") and Sections 10(b) and 14(a) of the Securities Exchange Act of 1934 ("Exchange Act") and Rules 10b-5, 13a-14, 13b2-2, 14a-3, and 14a-9, and aided and abetted NHT's violations of Section 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Rules 12b-20, 13a-1, and 13a-13. LaCore agreed to settle charges that he violated Section 17(a) of the Securities Act and Sections 10(b) and 14(a) of the Exchange Act and Rules 10b-5, 13b2-2, 14a-3, and 14a-9 and aided and abetted Woodburn's violations of Sections 10(b) and 14(a) of the Exchange Act and Rules 10b-5, 14a-3 and 14a-9. Each agreed to be permanently enjoined from violations of the specified statutes and to a five-year officer and director bar. Woodburn agreed to pay a $60,000 civil penalty, and LaCore agreed to pay a $50,000 civil penalty.
www.sec.gov/litigation/complaints/2008/comp20702.pdf
Litigation Release No. 20702 / September 4, 2008
Accounting and Auditing Enforcement Release No. 2872 / September 4, 2008
Securities and Exchange Commission v. Mark D. Woodburn and Terry LaCore, Civil Action No. 3:08-cv-1555-G/Northern District of Texas (Dallas Division)
On September 3, 2008, the Commission filed a civil action in the United States District Court for the Northern District of Texas charging two former officers of Natural Health Trends Corp. ("NHT") of Dallas, Texas, with securities fraud and other violations arising from undisclosed related party transactions from 2001 through 2005. The defendants are Mark D. Woodburn, of Southlake, Texas, NHT's former president, director and CFO, and Terry LaCore, of Flower Mound, Texas, the former president of NHT's chief subsidiary and an NHT director.
According to the complaint, from 2001 through August 2005, NHT's top distributor paid Woodburn and LaCore, directly and indirectly, approximately $2.5 million in undisclosed payments. The complaint also alleges that, in February 2004, Woodburn caused NHT to loan $256,200 to a Woodburn family-controlled company, and later took steps to conceal related party nature of the loan when it was discovered by NHT's new accounting management in the fall of 2004. As a result of Woodburn and LaCore's activities, the complaint continues, NHT failed to disclose, or inadequately disclosed, the related party transactions in periodic filings, registration statements, and proxy statements.
Woodburn and LaCore agreed to settle the SEC's charges without admitting or denying the allegations of the complaint. Woodburn agreed to settle charges that he violated Section 17(a) of the Securities Act of 1933 ("Securities Act") and Sections 10(b) and 14(a) of the Securities Exchange Act of 1934 ("Exchange Act") and Rules 10b-5, 13a-14, 13b2-2, 14a-3, and 14a-9, and aided and abetted NHT's violations of Section 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Rules 12b-20, 13a-1, and 13a-13. LaCore agreed to settle charges that he violated Section 17(a) of the Securities Act and Sections 10(b) and 14(a) of the Exchange Act and Rules 10b-5, 13b2-2, 14a-3, and 14a-9 and aided and abetted Woodburn's violations of Sections 10(b) and 14(a) of the Exchange Act and Rules 10b-5, 14a-3 and 14a-9. Each agreed to be permanently enjoined from violations of the specified statutes and to a five-year officer and director bar. Woodburn agreed to pay a $60,000 civil penalty, and LaCore agreed to pay a $50,000 civil penalty.
www.sec.gov/litigation/complaints/2008/comp20702.pdf