Securities and Exchange Commission v. Court
raw: Lr20508 Wfm Pi
Lr20508 Wfm Pi, No. 3:06-CV-06384-MHP (Mar. 24, 2008)
summary
William F. McFarland consented to a permanent injunction without admitting or denying allegations, agreeing to pay a $40,000 civil penalty to the SEC for violating Sections 10(b) and 13(b)(5) of the Securities Exchange Act by engaging in securities fraud, falsifying books and records, interfering with auditors, and aiding and abetting reporting failures.
paragraph
William F. McFarland was permanently enjoined by court order from violating Sections 10(b) and 13(b)(5) of the Securities Exchange Act of 1934, along with related rules, for engaging in fraudulent schemes, making materially false or misleading statements, falsifying accounting records, and interfering with auditors. He also aided and abetted violations of reporting and internal control requirements by an issuer, as alleged by the SEC. As part of the resolution, McFarland agreed to pay a $40,000 civil penalty to the U.S. Treasury within 60 business days, with the court retaining jurisdiction to enforce compliance and imposing post-judgment interest on delinquent payments.
narrative
William F. McFarland consented to a permanent injunction without admitting or denying the allegations in the SEC’s complaint, resolving claims of securities fraud and accounting misconduct. The SEC alleged that McFarland violated Section 10(b) and Rule 10b-5 by employing devices to defraud, making untrue or misleading statements, and engaging in deceptive practices in connection with securities transactions. He was also found to have violated Section 13(b)(5) and Rules 13b2-1 and 13b2-2 by falsifying books and records, circumventing internal controls, and making materially false statements to accountants. Additionally, McFarland aided and abetted failures by an issuer to file required reports and maintain accurate financial disclosures under Sections 13(a) and 13(b)(2). As part of the settlement, he was ordered to pay a $40,000 civil penalty to the U.S. Treasury within 60 business days via certified check, cashier’s check, or postal money order, with copies submitted to the SEC’s Office of Financial Management and the case attorney. The court retained jurisdiction to enforce the injunction, imposed post-judgment interest under 28 U.S.C. § 1961 on any late payments, and directed immediate entry of final judgment under Rule 54(b).
Classified accounting-fraud(confidence 97%). EDGAR detection: forms 10-K/10-Q/8-K/NT 10-K· recall 80% / precision 48%. detection rule →
Statutes
15 U.S.C. § 78j(b)15 U.S.C. § 78m(b)15 U.S.C. §78u(d)28 U.S.C. § 196117 C.F.R. § 240.10b-5Section 10(b) of the Securities Exchange ActRule 10b-5
Parties
CourtSecurities and Exchange Commission
Keywords
wfm
Extracted insights
Entities 3
- organization Court
- agency Securities and Exchange Commission
- organization Securities and Exchange Commission
Triples 5
- Securities and Exchange Commission filed a Complaint and First Amended Complaint against William F. McFarland and other defendants
- William F. McFarland consented to the Court's jurisdiction over him personally and over the subject matter of this action
- William F. McFarland entered a general appearance in the case
- Court ordered permanent injunction against William F. McFarland for violating Section 10(b) and Rule 10b-5
- Court ordered permanent injunction against William F. McFarland for violating Section 13(b)(5) and Rules 13b2-1 and 13b2-2
PDF
Text layers
Extracted body text (140c)
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OCR text (10,169c · tika · 95% conf)
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__________________________________________
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Case 3:06-cv-06384-CRB Document 92-5 Filed 03/24/2008 Page 1 of 5
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
SAN FRANCISCO DIVISION
SECURITIES AND EXCHANGE Case No. C 06-6384 CRB
COMMISSION,
Plaintiff,
v.
ROMULUS S. PEREIRA,
ROBERT B. STANTON,
L. JOHN KERN,
ANDREW D. FELDMAN,
WILLIAM F. McFARLAND,
LORI H. CORNMESSER,
Defendants.
ORDER OF PERMANENT INJUNCTION
AND OTHER RELIEF AGAINST WILLIAM F. MCFARLAND
The Court finds that Plaintiff, Securities and Exchange Commission (“Commission”), has
filed a Complaint and First Amended Complaint; and Defendant William F. McFarland has
entered a general appearance, consented to the Court’s jurisdiction over him personally and over
the subject matter of this action, consented to the entry of this Order of Permanent Injunction and
Other Relief against William F. McFarland (referred to as “Order of Permanent Injunction”)
without admitting or denying the allegations of the Complaint and First Amended Complaint
(except as to jurisdiction), waived findings of fact and conclusions of law, and waived any right
to appeal from this Order of Permanent Injunction.
I.
IT IS ORDERED, ADJUDGED AND DECREED, that William F. McFarland and his
agents, servants, employees, attorneys, and all persons in active concert or participation with
them who receive actual notice of this Order of Permanent Injunction by personal service or
McFarland Permanent Injunction Case No. C 06-6384
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Case 3:06-cv-06384-CRB Document 92-5 Filed 03/24/2008 Page 2 of 5
otherwise are permanently restrained and enjoined from violating, directly or indirectly, Section
10(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) [15 U.S.C. § 78j(b)] and
Rule 10b-5 promulgated thereunder [17 C.F.R. § 240.10b-5], by using any means or
instrumentality of interstate commerce, or of the mails, or of any facility of any national
securities exchange, in connection with the purchase or sale of any security:
(a) to employ any device, scheme, or artifice to defraud;
(b) to make any untrue statement of a material fact or to omit to state a material fact
necessary in order to make the statements made, in the light of the circumstances
under which they were made, not misleading; or
(c) to engage in any act, practice, or course of business which operates or would
operate as a fraud or deceit upon any person.
II.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that William F. McFarland
and his agents, servants, employees, attorneys, and all persons in active concert or participation
with them who receive actual notice of this Order of Permanent Injunction by personal service or
otherwise are permanently restrained and enjoined from violating, directly or indirectly, Section
13(b)(5) of the Exchange Act [15 U.S.C. § 78m(b)(5)] and Rules 13b2-1 and 13b2-2
promulgated thereunder [17 C.F.R. §§ 240.13b2-1 and 240.13b2-2] by:
(a) knowingly circumventing or knowingly failing to implement a system of internal
accounting controls, or knowingly falsifying any book, record or account
described in Section 13(b)(2) of the Exchange Act [15 U.S.C. § 78m(b)(2)]; or
(b) directly or indirectly falsifying or causing to be falsified any book, record or
account subject to Section 13(b)(2)(A) of the Exchange Act [15 U.S.C. §
78m(b)(2)(A)]; or
(c) directly or indirectly making or causing to be made a materially false or
misleading statement, or omitting to state or causing another person to omit to
state any material fact, to an accountant in connection with any audit, review or
examination of the financial statements of an issuer or company, or the
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Case 3:06-cv-06384-CRB Document 92-5 Filed 03/24/2008 Page 3 of 5
preparation or filing of any document or report required to be filed with the
Commission; or
(d) directly or indirectly taking any action to coerce, manipulate, mislead, or
fraudulently influence any independent public or certified public accountant
engaged in the performance of an audit or review of financial statements of an
issuer that are required to be filed with the Commission where that person knew
or should have known that such action, if successful, could result in rendering the
issuer’s financial statements materially misleading.
III.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that William F. McFarland
and his agents, servants, employees, attorneys, and all persons in active concert or participation
with them who receive actual notice of this Order of Permanent Injunction by personal service or
otherwise are permanently restrained and enjoined from aiding and abetting any violation of
Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B)(ii) of the Exchange Act [15 U.S.C. §§ 78m(a),
78m(b)(2)(A), and 78m(b)(2)(B)(ii)] and Rules 12b-20, 13a-1, and 13a-13 thereunder [17 C.F.R.
§§ 240.12b-20, 240.13a-1, and 240.13a-13], by knowingly providing substantial assistance to an
issuer that:
(a) fails to file with the Commission such information, documents, or annual,
quarterly or periodic reports that the Commission may require or prescribe
pursuant to Section 13(a) of the Exchange Act or any of the rules, regulations or
forms promulgated thereunder; or
(b) files with the Commission any information, document, or report, that contains any
untrue statement of a material fact, omits any material information, or otherwise
fails to comply with the provisions of Section 13(a) of the Exchange Act or any of
the rules, regulations or forms thereunder; or
(c) fails to add or include, in addition to the information expressly required to be
included in a statement or report, such further material information as may be
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Case 3:06-cv-06384-CRB Document 92-5 Filed 03/24/2008 Page 4 of 5
necessary to make the required statements, in the light of the circumstances under
which they were made, not misleading; or
(d) fails to make and keep books, records, and accounts, which, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the
issuer; or
(e) fails to devise and maintain a system of internal accounting controls sufficient to
provide reasonable assurances that transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally accepted
accounting principles or any other criteria applicable to such statements and to
maintain accountability of assets.
IV.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that William F. McFarland
is liable for a civil penalty in the amount of $40,000 (forty thousand dollars) pursuant to Section
21(d)(3) of the Exchange Act [15 U.S.C. §78u(d)(3)]. William F. McFarland shall satisfy this
obligation by paying a total of $40,000 (forty thousand dollars) within sixty (60) business days
after the date of entry of this Order of Permanent Injunction by certified check, bank cashier’s
check, or United States postal money order payable to the Securities and Exchange Commission.
The payment shall be delivered or mailed to the Office of Financial Management, Securities and
Exchange Commission, Operations Center, 6432 General Green Way, Mail Stop 0-3, Alexandria,
Virginia 22312, together with a cover letter identifying William F. McFarland as a defendant in
this action, setting forth the title and civil action number of this action and the name of this
Court, and specifying that payment is made pursuant to this Order of Permanent Injunction.
William F. McFarland shall simultaneously transmit photocopies of such payment and the
transmittal letter to the Securities and Exchange Commission’s attorney in this action. The
Securities and Exchange Commission shall remit the funds paid pursuant to this paragraph to the
United States Treasury.
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Case 3:06-cv-06384-CRB Document 92-5 Filed 03/24/2008 Page 5 of 5
V.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that William F. McFarland
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shall pay post-judgment interest on any delinquent amounts pursuant to 28 U.S.C. § 1961.
VI.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that the Consent of
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IT IS SO ORDERED
Judge Charles R. Breyer
William F. McFarland is incorporated herein with the same force and effect as if fully set forth
herein, and that William F. McFarland shall comply with all of the undertakings and agreements
set forth therein.
VII.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that this Court shall retain
jurisdiction of this matter for the purposes of enforcing the terms of this Order for Permanent
Injunction and Other Relief.
VIII
There being no just reason for delay, pursuant to Rule 54(b) of the Federal Rules of Civil
Procedure, the Clerk is ordered to enter a final judgment forth with and without further notice.
Dated: ____________________, 2008
Charles R. Breyer
UNITED STATES DISTRICT JUDGE
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McFarland Permanent Injunction Case No. C 06-6384