SEC v. Frank Okunak, No. 1:22-cv-06389, Southern District of New York (July 27, 2022) — Complaint

THOMAS P. SMITH, JR.
ACTING REGIONAL DIRECTOR
Sheldon L. Pollock
Sandeep Satwalekar
Brian A. Kudon
Nicholas Karasimas
Attorneys for Plaintiff
SECURITIES AND EXCHANGE COMMISSION
New    York Regional Office
100 Pearl Street, Suite 20-100
New York, New York 10004-2616
(212) 336-0086 (Karasimas)
[email protected]
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
SECURITIES AND EXCHANGE
COMMISSION,
Plaintiff,
-against-
FRANK OKUNAK,
Defendant  .
COMPLAINT
22 Civ. 6389
JURY TRIAL DEMANDED
Plaintiff Securities and Exchange Commission (“Commission”), for its Complaint against
Defendant Frank Okunak (“Okunak” or “Defendant” ), alleges as follows:
SUMMARY
1.This action involves Okunak’s falsification of the books and records of a publicly
traded global advertising and marketing company (the “Issuer”), and Okunak’s circumvention of
the Issuer’s internal accounting controls, from approximately 2011 through approximately July
2020 (the “Relevant Period”).  Throughout the Relevant Period, Okunak was an executive of a
subsidiary of the Issuer (the “Subsidiary”).

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2. Throughout the Relevant Period, Okunak directed the creation of, and in some
cases approved for processing and payment, falsified purchase orders and invoices.  The false
purchase orders and invoices purported to be for services being performed for the Issuer but
instead, Okunak misappropriated funds for his benefit.  The misappropriated funds were paid to
entities in which Okunak had an interest, to entities performing services for entities in which he
had an interest, and to pay Okunak’s personal expenses.
3. Okunak also circumvented the Issuer’s internal controls to aid in his
misappropriation.  He routinely submitted false certifications failing to disclose, among other
things, his conflicts of interest and his knowledge of any improper payments, and circumvented
controls related to the onboarding and payment of the Issuer’s vendors.
4. Okunak’s falsification of books and records and circumvention of internal
accounting controls allowed him to misappropriate more than $16 million from the Issuer during
the Relevant Period.
VIOLATIONS
5. By virtue of the foregoing conduct and as alleged further herein, Okunak aided
and abetted violations of Section 13(b)(2)(A) of the Securities Exchange Act of 1934
(“Exchange Act”) [15 U.S.C. § 78m(b)(2)(A)], and violated Section 13(b)(5) of the Exchange
Act  [15 U.S.C. §78m(b)(5)] and Rule 13b2-1 thereunder [17 C.F.R. § 240.13b2-1].
6. Unless Okunak is restrained and enjoined, he will engage in the acts, practices,
transactions, and courses of business set forth in this Complaint or in acts, practices, transactions,
and courses of business of similar type and object.
NATURE OF THE PROCEEDINGS AND RELIEF SOUGHT
7. The Commission brings this action pursuant to the authority conferred upon it by

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Exchange Act Section 21(d) [15 U.S.C. § 78u(d)].
8. The Commission seeks a judgment: (a) permanently enjoining Okunak from
aiding and abetting violations of, or violating, the federal securities laws and rules this Complaint
alleges he has violated; (b) permanently enjoining Okunak from acting as an officer or director
of any issuer that has a class of securities registered pursuant to Section 12 of the Exchange Act
[15 U.S.C. § 78l] or that is required to file reports pursuant to Section 15(d) of the Exchange Act
[15 U.S.C. § 78o(d)] pursuant to the Court’s authority under Section 21(d)(5) of the Exchange
Act [15 U.S.C. § 78u(d)(5)]; (c) that leaves for the Court to determine, upon motion of the
Commission, whether it is appropriate to order disgorgement of ill-gotten gains, and if so, in
what amount, and if disgorgement is ordered, with Okunak to pay prejudgment interest thereon;
(d) that leaves for the Court to determine, upon motion of the Commission, whether to order
Okunak to pay a civil monetary penalty pursuant to Exchange Act Section 21(d)(3) [15 U.S.C. §
78u(d)(3)], and if so, in what amount; and (e) ordering any other further relief the Court may
deem just and proper.
JURISDICTION AND VENUE
9. This Court has jurisdiction over this action pursuant to Exchange Act Section 27
[15 U.S.C. § 78aa].
10. Defendant, directly and indirectly, has made use of the means or instrumentalities
of interstate commerce or of the mails in connection with the transactions, acts, practices, and
courses of business alleged herein.
11. Venue lies in this District under Exchange Act Section 27 [15 U.S.C. § 78aa].
Both the Issuer and Subsidiary maintain a principal place of business in New York, New York,
and Okunak was employed at the New York, New York location at all relevant times.  Okunak

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committed the acts that constitute the alleged violations in this Dist rict.
DEFENDANT
12. Okunak, age 56, is a resident of Lyndhurst, New Jersey.  Okunak was the Global
Chief Financial Officer (“CFO”) of the Subsidiary from 2009 through 2019, and its Chief
Operating Officer from 2013 until he was terminated in July 2020.
OTHER RELEVANT ENTITIES
13. The Issuer is a Delaware corporation with its principal place of business in New
York, New York.  The Issuer is a global advertising and marketing company with more than
50,000 employees.  The Issuer is a publicly traded company, listed on the New York Stock
Exchange.
14. The Subsidiary is a subsidiary of the Issuer headquartered New York, New York.
The Subsidiary is a public relations firm with more than 4,000 employees.
FACTS
I.    BACKGROUND
15.  Okunak began working at the Subsidiary in 1995 as a financial manager, left the
Subsidiary in 1999, and returned to the Subsidiary as its North American CFO in 2001.  He was
promoted to Global CFO of the Subsidiary in 2009, and promoted to Global CFO and COO in
2013.  He served as Global CFO until 2019 and as COO until his termination in July 2020.
16. During the Relevant Period, Okunak became involved with, and held financial
interests in, a number of entities outside of his employment at the Subsidiary.  Okunak arranged
for certain of these entities to become vendors of the Issuer, and directed millions of dollars in
payments from the Issuer to these entities, for services not actually provided to the Issuer.  In
other instances, Okunak directed payments to companies that were performing services for

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entities he had an interest in, rather than the Issuer.  Finally, Okunak directed the Issuer to make
payments for his personal expenses.  Okunak was able to direct these payments in this manner by
falsifying the Issuer’s books and records, and subverting its internal accounting controls, as
discussed below.
17. In total, Okunak misappropriated more than $16 million from the Issuer during
the Relevant Period.  Of that amount, Okunak misappropriated approximately $11.5 million
during the period covered by the relevant statute of limitations, as modified by tolling
agreements executed by Okunak and the Commission (the “Tolling Agreements”).
II.   OKUNAK’S FALSIFICATION OF THE ISSUER’S BOOKS AND RECORDS

18. Throughout the Relevant Period, Okunak directed the Issuer to make payments to
entities for services that did not relate to work performed for the Issuer or the Subsidiary,
pursuant to invoices and purchase orders.  These invoices and purchaser orders were false
because they did not actually relate to services provided to the Issuer or the Subsidiary.  Instead,
they facilitated payment for services and expenses related to Okunak, and entities with which he
was connected.
19. Typically, Okunak directed the creation of a purchase order by emailing
instructions containing the entity, the amount, and the description of the services being
performed to a Senior Business Analyst (“Employee A”) who reported directly to him.
1
  Invoices
were prepared by the party being paid, which in some cases was owned or controlled by Okunak,
and again referenced services that were not performed for the Issuer or the Subsidiary.
20. In total and including the specific instances discussed below, Okunak

1
 Employee A worked extensively with Okunak, and performed a number of administrative tasks for Okunak and
other executives of the Subsidiary.  With respect to the conduct alleged herein, Employee A performed purely
administrative tasks, at Okunak’s direction.

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misappropriated approximately $16 million during the Relevant Period.
21. For example, Okunak directed the Issuer, based on falsified purchase orders and
invoices, to make payments totaling $2.5 million to an e-sports and entertainment event company
that he owned and controlled (“Company A”).  Company A, however, did not provide the
services or perform any work for the Issuer or the Subsidiary as set forth on the purchase orders
or invoices.  Rather, Okunak was directing payments from the Issuer to Company A to fund
Company A’s operating expenses.
22. In some instances, Okunak took specific steps to alter vendor invoices to make it
appear as though the services being provided were related to the Issuer, obscure the true nature
of the payment, or otherwise create a level of generality that would prevent closer scrutiny.
23. For example, in November 2018, Okunak received an invoice for approximately
$77,000 from an entity (“Company B”) that had performed services for a company he had an
interest in (“Company C”).  These services provided by Company B to Company C were not for
the benefit of the Issuer or Subsidiary.  The invoice from Company B specifically referenced
Company C, for whom the work was performed.  But before submitting the invoice for internal
processing, Okunak deleted the reference to Company C, and inserted a generic description that
would be less likely to draw scrutiny.  On multiple occasions, Okunak requested that invoices be
provided in a format that would permit his further editing.
24. Okunak also falsified purchase orders and invoices to facilitate payment for
certain personal expenses.  For example, in June 2017, a large sports complex operator reached
out to Okunak concerning his outstanding suite license fee of approximately $90,000.  This was
a personal expense, unrelated to the Issuer or the Subsidiary.  Nonetheless, Okunak directed
Employee A to prepare a purchase order for the same amount, to be paid to the sports complex

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operator, and provided a false description for the purchase order.  Okunak then approved the
invoice for payment to the sports complex in the same amount.
25. As a result of Okunak’s conduct, the Issuer maintained books and records that did
not fairly and accurately reflect the nature of the transactions to which they related, or accurately
reflect the nature of the disposition of the Issuer’s assets.
III.   OKUNAK’S CIRCUMVENTION OF THE ISSUER’S INTERNAL
ACCOUNTING CONTROLS
26. During the Relevant Period, Okunak circumvented the Issuer’s internal
accounting controls in multiple ways, including by executing false certifications concerning his
conflicts of interest and knowledge of misconduct, and manipulating the Issuer’s process for
vendor procurement and payment by providing false information with respect to the expenses he
caused the Issuer to incur.
A.     Falsification of Certifications
27. As part of its internal control framework, the Issuer required its officers and
directors, including those at subsidiary companies such as the Subsidiary, to disclose any
interests in the Issuer’s or its subsidiaries’ vendors.  As part of this process, the Issuer required
Okunak to complete a yearly “Disclosure & Certification” form.
28. The Disclosure and Certification form provided the opportunity to disclose any
conflicts of interest and contained a series of “yes” or “no” questions related to potential
conflicts with vendors or clients.  For example, the Disclosure and Certification form asked
whether the employee had a substantial financial or ownership interest in any organization
(including vendors) that has been in a business relationship with the Issuer or its subsidiaries, if
the employee was in a position to award business or otherwise influence the Issuer’s business
with such organizations.  Okunak falsely responded “no” to these questions and did not disclose

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any conflicts.
29. Okunak also acknowledged on the Disclosure and Certification form that he had
the opportunity to review the Issuer’s Code of Conduct, and understood that he must seek advice
and counsel from the Issuer’s human resource, legal, or risk functions before taking actions that,
based on the Code of Conduct and other policy documents, would raise a question of impropriety
or the appearance of impropriety.
30. In addition, the Issuer relied on a certification and sub-certification process to
gather information, which formed the basis of representations made to the Issuer’s auditor by
senior management.
31. As part of this process, in addition to certifying conformity with GAAP and
certifying as to the accuracy of the financial statements, Okunak regularly falsely confirmed to
the Issuer, among other things:
(i) that he had no knowledge of any employee being involved in the making of any
payments for which no goods or services were provided, unusual billing practices, or
completing transactions that were not fully and accurately reported in the company’s
books and records;
(ii) that there were no undisclosed side agreements;
(ii  i) that he had no knowledge of fraud or suspected fraud, by Senior Management,
Management or other employees with significant responsibility in internal controls over
financial reporting; and
(iv) that he was not aware of payments which were deliberately disguised in the
accounting records or attempts to conceal transactions or payment made by or on behalf
of the Issuer or one of its affiliates.

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32. Okunak’s responses, representations, and certifications on the above-mentioned
documents were knowingly false.  Okunak knew that he had a significant interest in entities he
was causing the Issuer to pay.  Okunak knew that he had utilized falsified vendor invoices and
purchase orders to conceal transactions.  And Okunak knew that he was misappropriating the
Issuer’s funds for his own benefit.
B.  Circumvention of the Vendor Onboarding and Payment Processes
33. During the Relevant Period, Okunak also circumvented internal controls in the
vendor onboarding process by submitting false information on the Issuer’s vendor onboarding
form with respect to Company A, and circumvented the process by which expenses were
approved for payment by providing false and misleading information to other employees at the
Issuer, who relied on that information when processing payments.
34. A number of vendors or entities to which Okunak directed payments were “new”
vendors that did not previously exist within the Issuer’s database, and as a result needed to be
onboarded to ensure payment.
35. At the onboarding stage, Okunak circumvented internal controls by directing
certain vendors to be onboarded without disclosing his interest in that vendor, which would have
triggered additional scrutiny.
36. With respect to Company A, Okunak submitted false and misleading information
on a vendor information form required by the Issuer.  Specifically, Okunak listed a relative (who
has a different surname) as the owner and CEO of Company A.  Despite incorporating Company
A using his relative’s name, Okunak owned and controlled Company A at all relevant times.  On
the vendor information form, there is no indication that the relative is connected with Okunak,
and no indication that Okunak is connected with Company A.  And, as described above, Okunak

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never otherwise disclosed his interest in Company A on any form that would have required it.
37. During the Relevant Period, to remit a payment to a vendor, the Issuer required an
approved purchase order, or in some instances, an approved non-purchase order invoice.  The
preparation and approval of purchase orders and invoices for payment was subject to certain
controls. Approval typically involved Issuer employees at multiple levels of authority, and the
person that submitted or created the purchase order could not be the same person that provided
an approval.  These controls necessarily rely on the persons involved furnishing accurate
information.  Okunak circumvented the controls around the submission and approval of invoices
and purchase orders by providing false information concerning the purpose and nature of the
relevant expenses.
38.   Okunak directed Employee A to create all or nearly all of the purchase orders at
issue.  Okunak sent email instructions to Employee A regarding purchase orders to be generated,
and by doing so, falsely suggested that the purchase orders were related to the Issuer’s business
or for the Issuer’s benefit.  Okunak never indicated to Employee A or anyone at the Issuer that
these purchase orders were not, in fact, related to the Issuer’s business or otherwise for the
Issuer’s benefit.
39. Similarly, Okunak circumvented and interfered with the process by which
purchase orders or invoices were approved.  In some instances, Okunak provided a level of
approval for an invoice or purchase order, and in these cases, did so knowing that the payments
were improper and not for the benefit of the Issuer.  In other instances, he provided approvers (or
directed Employee A to provide approvers) with false and misleading information regarding the
nature of the expenses.  For example, in a number of instances, Okunak instructed Employee A
to include a description in the purchase order that seemed plausibly related to the Subsidiary’s

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business.  As a result, approvers relied on false and misleading information ultimately provided
by Okunak regarding the nature of the expenses.  Okunak was well-positioned to circumvent
controls in this manner given his status as a high-ranking, long-tenured executive of the
Subsidiary.
40. Through the conduct described above, Okunak knowingly circumvented the
Issuer’s system of internal accounting controls.
TOLLING AGREEMENTS
41. On December 8, 2021, March 2, 2022, May 16, 2022, and July 6, 2022, Okunak
entered into Tolling Agreements with the Commission.  The Tolling Agreements specify a
period of time (a “tolling period”) in which the “running of any statute of limitations applicable
to any action or proceeding against Okunak authorized, instituted, or brought by . . . the
Commission . . . arising out of the [Commission’s investigation], including any sanctions or
relief that may be imposed therein, is tolled and suspended for the period beginning on
December 7, 2021 through August 6, 2022 . . . .”  The Tolling Agreements further provide that
Okunak and any of his agents or attorneys “shall not include the tolling period in the calculation
of the running of any statute of limitations or for any other time-related defense applicable to any
proceeding, including any sanctions or relief that may be imposed therein, in asserting or relying
upon any such time-related defense.”

FIRST CLAIM FOR RELIEF
Aiding and Abetting Violations of Exchange Act Section 13(b)   (2)(A)

42. The Commission re-alleges and incorporates by reference here the allegations in
paragraphs 1 through 41.
43. At all relevant times, Exchange Act Section 13(b)(2)(A) [15 U.S.C. §

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78m(b)(2)(A)] required the Issuer, as an issuer whose securities were registered pursuant to
Section 12 of the Exchange Act [15 U.S.C. § 78l], to make and keep books, records, and
accounts, which, in reasonable detail, accurately and fairly reflected the transactions and
dispositions of the assets of the issuer.
44. By engaging in the acts and conduct alleged herein, Okunak, directly or
indirectly, singly or in concert with others, aided and abetted the Issuer in failing to make and
keep books, records, and accounts, which, in reasonable detail, accurately and fairly reflected the
transactions and dispositions of the assets of the issuer, in violation of Exchange Act Section
13(b)(2)(A) [15 U.S.C. § 78m(b)(2)(A)].
45. Among other things, Okunak aided and abetted this violation by knowingly
directing the creation and submission of false purchase orders and invoices.
46. By reason of the foregoing, Okunak has aided and abetted and, unless enjoined,
will continue to aid and abet violations of Section 13(b)(2)(A) of the Exchange Act [15 U.S.C. §
78m(b)(2)(A)].
SECOND CLAIM FOR RELIEF
Violations of Exchange Act Section 13(b)(5)

47. The Commission re-alleges and incorporates by reference here the allegations in
paragraphs 1 through 41.
48. At all relevant times, Exchange Act Section 13(b)(5) [15 U.S.C. § 78m(b)(5)]
made it unlawful for any person to knowingly circumvent or knowingly fail to implement a
system of internal accounting controls or knowingly falsify any books, records, or accounts that
are described in Exchange Act Section 13(b)(2) [15 U.S.C. § 78m(b)(2)].
49. By engaging in the acts and conduct alleged herein, Okunak knowingly
circumvented a system of internal accounting controls and knowingly falsified books, records, or

 13
accounts described in Exchange Act Section 13(b)(2)[15 U.S.C. § 78m(b)(2)], in violation of
Exchange Act Section 13(b)(5) [15 U.S.C. § 78m(b)(5)].
50. Among other things, Okunak committed this violation by knowingly directing the
creation and submission of false purchase orders and invoices, and by knowingly circumventing
internal accounting controls by submitting false certifications and otherwise evading controls
concerning the vendor onboarding and payment process.
51. By reason of the foregoing, Okunak violated, and unless enjoined will continue to
violate Exchange Act Section 13(b)(5) [15 U.S.C. § 78m(b)(5)].
THIRD CLAIM FOR RELIEF
Violations of Exchange Act Rule 13b2-1

52. The Commission re-alleges and incorporates by reference here the allegations in
paragraphs 1 through 41.
53. At all relevant times, Exchange Act Rule 13b2-1 [17 C.F.R. §§ 240.13b2-1] made
it unlawful for any person to directly or indirectly falsify or cause to be falsified any book,
record, or account subject to Exchange Act Section 13(b)(2)(A) [15 U.S.C. § 78m(b)(2)(A)].
54. By engaging in the acts and conduct alleged herein Okunak, directly or indirectly,
falsified or caused to be falsified books, records, and accounts subject to Exchange Act Section
13(b)(2)(A) [15 U.S.C. § 78m(b)(2)(A)], in violation of Exchange Act Rule 13b2-1 [17 C.F.R.
§§ 240.13b2-1].
55. Among other things, Okunak committed this violation by directly or indirectly
falsifying or causing to be falsified purchase orders and invoices.
56. By reason of the foregoing, Okunak violated, and unless enjoined will continue to
violate, Exchange Act Rule 13b2-1 [17 C.F.R. §§ 240.13b2-1].

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PRAYER FOR RELIEF

 WHEREFORE, the Commission respectfully requests that the Court enter a Judgment:
I.
Permanently enjoining Okunak from aiding and abetting violations of Section
13(b)(2)(A) of the Exchange Act [15 U.S.C. § 78m(b)(2)(A)], and from violating Sections
13(b)(5) of the Exchange Act [15 U.S.C. § 78m(b)(5)] and Rule 13b2-1 thereunder [17 C.F.R. §§
240.13b2-1].
II.
Permanently enjoining Okunak from acting as an officer or director of any issuer that has
a class of securities registered pursuant to Section 12 of the Exchange Act [15 U.S.C. § 78l] or
that is required to file reports pursuant to Section 15(d) of the Exchange Act [15 U.S.C. §
78o(d)], pursuant to the Court’s authority under Section 21(d)(5) of the Exchange Act [15 U.S.C.
§ 78u(d)(5)].
III.

Ordering Okunak, if the Court deems it appropriate upon motion of the Commission, to
disgorge all ill-gotten gains he received directly or indirectly, with prejudgment interest thereon,
and if so, with the amount to be determined by the Court upon motion by the Commission;

15
IV.
Ordering Okunak, if the Court deems it appropriate upon motion of the Commission, to
pay civil monetary penalties under Section 21(d)(3) of the Exchange Act [15 U.S.C. §
78u(d)(3)], and if so, with the amount to be determined by the Court upon motion of the
Commission; and
V.
Granting any other and further relief this Court may deem just and proper.
Dated:  New Yor
k, New York
July 27, 2022

____________________________________
THOMAS P. SMITH, JR.
ACTING REGIONAL DIRECTOR
Sheldon L. Pollock
Sandeep
 Satwalekar
Brian A. Kudon
Nicholas Karasimas
Attorneys for Plaintiff
SECURITIES AND EXCHANGE COMMISSION
New York Regional Office
100 Pearl Street, Suite 20-100
New York, New York 10004-2616
(212) 336-0086 (Karasimas
)
[email protected]
/s/ Thomas P. Smith, Jr.

THOMAS P. SMITH, JR.  
ACTING REGIONAL DIRECTOR 
Sheldon L. Pollock 
Sandeep Satwalekar 
Brian A. Kudon 
Nicholas Karasimas  
Attorneys for Plaintiff 
SECURITIES AND EXCHANGE COMMISSION 
New York Regional Office 
100 Pearl Street, Suite 20-100 
New York, New York 10004-2616 
(212) 336-0086 (Karasimas)
[email protected]

UNITED STATES DISTRICT COURT 
SOUTHERN DISTRICT OF NEW YORK 

SECURITIES AND EXCHANGE 
COMMISSION, 

Plaintiff, 

-against-

FRANK OKUNAK,   

Defendant. 

COMPLAINT 

22 Civ. 6389  

JURY TRIAL DEMANDED 

Plaintiff Securities and Exchange Commission (“Commission”), for its Complaint against 

Defendant Frank Okunak (“Okunak” or “Defendant”), alleges as follows: 

SUMMARY 

1. This action involves Okunak’s falsification of the books and records of a publicly

traded global advertising and marketing company (the “Issuer”), and Okunak’s circumvention of 

the Issuer’s internal accounting controls, from approximately 2011 through approximately July 

2020 (the “Relevant Period”).  Throughout the Relevant Period, Okunak was an executive of a 

subsidiary of the Issuer (the “Subsidiary”).   

Case 1:22-cv-06389   Document 1   Filed 07/27/22   Page 1 of 15



 2 

2. Throughout the Relevant Period, Okunak directed the creation of, and in some 

cases approved for processing and payment, falsified purchase orders and invoices.  The false 

purchase orders and invoices purported to be for services being performed for the Issuer but 

instead, Okunak misappropriated funds for his benefit.  The misappropriated funds were paid to 

entities in which Okunak had an interest, to entities performing services for entities in which he 

had an interest, and to pay Okunak’s personal expenses.   

3. Okunak also circumvented the Issuer’s internal controls to aid in his 

misappropriation.  He routinely submitted false certifications failing to disclose, among other 

things, his conflicts of interest and his knowledge of any improper payments, and circumvented 

controls related to the onboarding and payment of the Issuer’s vendors.   

4. Okunak’s falsification of books and records and circumvention of internal 

accounting controls allowed him to misappropriate more than $16 million from the Issuer during 

the Relevant Period.    

VIOLATIONS 

5. By virtue of the foregoing conduct and as alleged further herein, Okunak aided 

and abetted violations of Section 13(b)(2)(A) of the Securities Exchange Act of 1934 

(“Exchange Act”) [15 U.S.C. § 78m(b)(2)(A)], and violated Section 13(b)(5) of the Exchange 

Act  [15 U.S.C. §78m(b)(5)] and Rule 13b2-1 thereunder [17 C.F.R. § 240.13b2-1].   

6. Unless Okunak is restrained and enjoined, he will engage in the acts, practices, 

transactions, and courses of business set forth in this Complaint or in acts, practices, transactions, 

and courses of business of similar type and object.   

NATURE OF THE PROCEEDINGS AND RELIEF SOUGHT 

7. The Commission brings this action pursuant to the authority conferred upon it by 

Case 1:22-cv-06389   Document 1   Filed 07/27/22   Page 2 of 15



 3 

Exchange Act Section 21(d) [15 U.S.C. § 78u(d)].  

8. The Commission seeks a judgment: (a) permanently enjoining Okunak from 

aiding and abetting violations of, or violating, the federal securities laws and rules this Complaint 

alleges he has violated; (b) permanently enjoining Okunak from acting as an officer or director 

of any issuer that has a class of securities registered pursuant to Section 12 of the Exchange Act 

[15 U.S.C. § 78l] or that is required to file reports pursuant to Section 15(d) of the Exchange Act 

[15 U.S.C. § 78o(d)] pursuant to the Court’s authority under Section 21(d)(5) of the Exchange 

Act [15 U.S.C. § 78u(d)(5)]; (c) that leaves for the Court to determine, upon motion of the 

Commission, whether it is appropriate to order disgorgement of ill-gotten gains, and if so, in 

what amount, and if disgorgement is ordered, with Okunak to pay prejudgment interest thereon; 

(d) that leaves for the Court to determine, upon motion of the Commission, whether to order 

Okunak to pay a civil monetary penalty pursuant to Exchange Act Section 21(d)(3) [15 U.S.C. § 

78u(d)(3)], and if so, in what amount; and (e) ordering any other further relief the Court may 

deem just and proper.   

JURISDICTION AND VENUE 

9. This Court has jurisdiction over this action pursuant to Exchange Act Section 27 

[15 U.S.C. § 78aa].  

10. Defendant, directly and indirectly, has made use of the means or instrumentalities 

of interstate commerce or of the mails in connection with the transactions, acts, practices, and 

courses of business alleged herein. 

11. Venue lies in this District under Exchange Act Section 27 [15 U.S.C. § 78aa].  

Both the Issuer and Subsidiary maintain a principal place of business in New York, New York, 

and Okunak was employed at the New York, New York location at all relevant times.  Okunak 

Case 1:22-cv-06389   Document 1   Filed 07/27/22   Page 3 of 15



 4 

committed the acts that constitute the alleged violations in this District.     

DEFENDANT 

12. Okunak, age 56, is a resident of Lyndhurst, New Jersey.  Okunak was the Global 

Chief Financial Officer (“CFO”) of the Subsidiary from 2009 through 2019, and its Chief 

Operating Officer from 2013 until he was terminated in July 2020.   

OTHER RELEVANT ENTITIES 

13. The Issuer is a Delaware corporation with its principal place of business in New 

York, New York.  The Issuer is a global advertising and marketing company with more than 

50,000 employees.  The Issuer is a publicly traded company, listed on the New York Stock 

Exchange.   

14. The Subsidiary is a subsidiary of the Issuer headquartered New York, New York.  

The Subsidiary is a public relations firm with more than 4,000 employees.    

FACTS 

I. BACKGROUND 

15.  Okunak began working at the Subsidiary in 1995 as a financial manager, left the 

Subsidiary in 1999, and returned to the Subsidiary as its North American CFO in 2001.  He was 

promoted to Global CFO of the Subsidiary in 2009, and promoted to Global CFO and COO in 

2013.  He served as Global CFO until 2019 and as COO until his termination in July 2020.   

16. During the Relevant Period, Okunak became involved with, and held financial 

interests in, a number of entities outside of his employment at the Subsidiary.  Okunak arranged 

for certain of these entities to become vendors of the Issuer, and directed millions of dollars in 

payments from the Issuer to these entities, for services not actually provided to the Issuer.  In 

other instances, Okunak directed payments to companies that were performing services for 

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 5 

entities he had an interest in, rather than the Issuer.  Finally, Okunak directed the Issuer to make 

payments for his personal expenses.  Okunak was able to direct these payments in this manner by 

falsifying the Issuer’s books and records, and subverting its internal accounting controls, as 

discussed below.   

17. In total, Okunak misappropriated more than $16 million from the Issuer during 

the Relevant Period.  Of that amount, Okunak misappropriated approximately $11.5 million 

during the period covered by the relevant statute of limitations, as modified by tolling 

agreements executed by Okunak and the Commission (the “Tolling Agreements”).    

II. OKUNAK’S FALSIFICATION OF THE ISSUER’S BOOKS AND RECORDS   
  
18. Throughout the Relevant Period, Okunak directed the Issuer to make payments to 

entities for services that did not relate to work performed for the Issuer or the Subsidiary, 

pursuant to invoices and purchase orders.  These invoices and purchaser orders were false 

because they did not actually relate to services provided to the Issuer or the Subsidiary.  Instead, 

they facilitated payment for services and expenses related to Okunak, and entities with which he 

was connected.   

19. Typically, Okunak directed the creation of a purchase order by emailing 

instructions containing the entity, the amount, and the description of the services being 

performed to a Senior Business Analyst (“Employee A”) who reported directly to him.1  Invoices 

were prepared by the party being paid, which in some cases was owned or controlled by Okunak, 

and again referenced services that were not performed for the Issuer or the Subsidiary.  

20. In total and including the specific instances discussed below, Okunak 

                                                 
1 Employee A worked extensively with Okunak, and performed a number of administrative tasks for Okunak and 
other executives of the Subsidiary.  With respect to the conduct alleged herein, Employee A performed purely 
administrative tasks, at Okunak’s direction. 

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misappropriated approximately $16 million during the Relevant Period.    

21. For example, Okunak directed the Issuer, based on falsified purchase orders and 

invoices, to make payments totaling $2.5 million to an e-sports and entertainment event company 

that he owned and controlled (“Company A”).  Company A, however, did not provide the 

services or perform any work for the Issuer or the Subsidiary as set forth on the purchase orders 

or invoices.  Rather, Okunak was directing payments from the Issuer to Company A to fund 

Company A’s operating expenses.    

22. In some instances, Okunak took specific steps to alter vendor invoices to make it 

appear as though the services being provided were related to the Issuer, obscure the true nature 

of the payment, or otherwise create a level of generality that would prevent closer scrutiny.   

23. For example, in November 2018, Okunak received an invoice for approximately 

$77,000 from an entity (“Company B”) that had performed services for a company he had an 

interest in (“Company C”).  These services provided by Company B to Company C were not for 

the benefit of the Issuer or Subsidiary.  The invoice from Company B specifically referenced 

Company C, for whom the work was performed.  But before submitting the invoice for internal 

processing, Okunak deleted the reference to Company C, and inserted a generic description that 

would be less likely to draw scrutiny.  On multiple occasions, Okunak requested that invoices be 

provided in a format that would permit his further editing.   

24. Okunak also falsified purchase orders and invoices to facilitate payment for 

certain personal expenses.  For example, in June 2017, a large sports complex operator reached 

out to Okunak concerning his outstanding suite license fee of approximately $90,000.  This was 

a personal expense, unrelated to the Issuer or the Subsidiary.  Nonetheless, Okunak directed 

Employee A to prepare a purchase order for the same amount, to be paid to the sports complex 

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operator, and provided a false description for the purchase order.  Okunak then approved the 

invoice for payment to the sports complex in the same amount.   

25. As a result of Okunak’s conduct, the Issuer maintained books and records that did 

not fairly and accurately reflect the nature of the transactions to which they related, or accurately 

reflect the nature of the disposition of the Issuer’s assets.   

III. OKUNAK’S CIRCUMVENTION OF THE ISSUER’S INTERNAL 
ACCOUNTING CONTROLS  

26. During the Relevant Period, Okunak circumvented the Issuer’s internal 

accounting controls in multiple ways, including by executing false certifications concerning his 

conflicts of interest and knowledge of misconduct, and manipulating the Issuer’s process for 

vendor procurement and payment by providing false information with respect to the expenses he 

caused the Issuer to incur. 

A.  Falsification of Certifications  

27. As part of its internal control framework, the Issuer required its officers and 

directors, including those at subsidiary companies such as the Subsidiary, to disclose any 

interests in the Issuer’s or its subsidiaries’ vendors.  As part of this process, the Issuer required 

Okunak to complete a yearly “Disclosure & Certification” form.   

28. The Disclosure and Certification form provided the opportunity to disclose any 

conflicts of interest and contained a series of “yes” or “no” questions related to potential 

conflicts with vendors or clients.  For example, the Disclosure and Certification form asked 

whether the employee had a substantial financial or ownership interest in any organization 

(including vendors) that has been in a business relationship with the Issuer or its subsidiaries, if 

the employee was in a position to award business or otherwise influence the Issuer’s business 

with such organizations.  Okunak falsely responded “no” to these questions and did not disclose 

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any conflicts.   

29. Okunak also acknowledged on the Disclosure and Certification form that he had 

the opportunity to review the Issuer’s Code of Conduct, and understood that he must seek advice 

and counsel from the Issuer’s human resource, legal, or risk functions before taking actions that, 

based on the Code of Conduct and other policy documents, would raise a question of impropriety 

or the appearance of impropriety.    

30. In addition, the Issuer relied on a certification and sub-certification process to 

gather information, which formed the basis of representations made to the Issuer’s auditor by 

senior management.   

31. As part of this process, in addition to certifying conformity with GAAP and 

certifying as to the accuracy of the financial statements, Okunak regularly falsely confirmed to 

the Issuer, among other things:  

(i) that he had no knowledge of any employee being involved in the making of any 

payments for which no goods or services were provided, unusual billing practices, or 

completing transactions that were not fully and accurately reported in the company’s 

books and records; 

(ii) that there were no undisclosed side agreements;  

(iii) that he had no knowledge of fraud or suspected fraud, by Senior Management, 

Management or other employees with significant responsibility in internal controls over 

financial reporting; and 

(iv) that he was not aware of payments which were deliberately disguised in the 

accounting records or attempts to conceal transactions or payment made by or on behalf 

of the Issuer or one of its affiliates.   

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32. Okunak’s responses, representations, and certifications on the above-mentioned 

documents were knowingly false.  Okunak knew that he had a significant interest in entities he 

was causing the Issuer to pay.  Okunak knew that he had utilized falsified vendor invoices and 

purchase orders to conceal transactions.  And Okunak knew that he was misappropriating the 

Issuer’s funds for his own benefit.   

B.  Circumvention of the Vendor Onboarding and Payment Processes  

33. During the Relevant Period, Okunak also circumvented internal controls in the 

vendor onboarding process by submitting false information on the Issuer’s vendor onboarding 

form with respect to Company A, and circumvented the process by which expenses were 

approved for payment by providing false and misleading information to other employees at the 

Issuer, who relied on that information when processing payments.  

34. A number of vendors or entities to which Okunak directed payments were “new” 

vendors that did not previously exist within the Issuer’s database, and as a result needed to be 

onboarded to ensure payment.   

35. At the onboarding stage, Okunak circumvented internal controls by directing 

certain vendors to be onboarded without disclosing his interest in that vendor, which would have 

triggered additional scrutiny.     

36. With respect to Company A, Okunak submitted false and misleading information 

on a vendor information form required by the Issuer.  Specifically, Okunak listed a relative (who 

has a different surname) as the owner and CEO of Company A.  Despite incorporating Company 

A using his relative’s name, Okunak owned and controlled Company A at all relevant times.  On 

the vendor information form, there is no indication that the relative is connected with Okunak, 

and no indication that Okunak is connected with Company A.  And, as described above, Okunak 

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never otherwise disclosed his interest in Company A on any form that would have required it.   

37. During the Relevant Period, to remit a payment to a vendor, the Issuer required an 

approved purchase order, or in some instances, an approved non-purchase order invoice.  The 

preparation and approval of purchase orders and invoices for payment was subject to certain 

controls. Approval typically involved Issuer employees at multiple levels of authority, and the 

person that submitted or created the purchase order could not be the same person that provided 

an approval.  These controls necessarily rely on the persons involved furnishing accurate 

information.  Okunak circumvented the controls around the submission and approval of invoices 

and purchase orders by providing false information concerning the purpose and nature of the 

relevant expenses. 

38.   Okunak directed Employee A to create all or nearly all of the purchase orders at 

issue.  Okunak sent email instructions to Employee A regarding purchase orders to be generated, 

and by doing so, falsely suggested that the purchase orders were related to the Issuer’s business 

or for the Issuer’s benefit.  Okunak never indicated to Employee A or anyone at the Issuer that 

these purchase orders were not, in fact, related to the Issuer’s business or otherwise for the 

Issuer’s benefit.   

39. Similarly, Okunak circumvented and interfered with the process by which 

purchase orders or invoices were approved.  In some instances, Okunak provided a level of 

approval for an invoice or purchase order, and in these cases, did so knowing that the payments 

were improper and not for the benefit of the Issuer.  In other instances, he provided approvers (or 

directed Employee A to provide approvers) with false and misleading information regarding the 

nature of the expenses.  For example, in a number of instances, Okunak instructed Employee A 

to include a description in the purchase order that seemed plausibly related to the Subsidiary’s 

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business.  As a result, approvers relied on false and misleading information ultimately provided 

by Okunak regarding the nature of the expenses.  Okunak was well-positioned to circumvent 

controls in this manner given his status as a high-ranking, long-tenured executive of the 

Subsidiary.   

40. Through the conduct described above, Okunak knowingly circumvented the 

Issuer’s system of internal accounting controls.   

TOLLING AGREEMENTS  

41. On December 8, 2021, March 2, 2022, May 16, 2022, and July 6, 2022, Okunak 

entered into Tolling Agreements with the Commission.  The Tolling Agreements specify a 

period of time (a “tolling period”) in which the “running of any statute of limitations applicable 

to any action or proceeding against Okunak authorized, instituted, or brought by . . . the 

Commission . . . arising out of the [Commission’s investigation], including any sanctions or 

relief that may be imposed therein, is tolled and suspended for the period beginning on 

December 7, 2021 through August 6, 2022 . . . .”  The Tolling Agreements further provide that 

Okunak and any of his agents or attorneys “shall not include the tolling period in the calculation 

of the running of any statute of limitations or for any other time-related defense applicable to any 

proceeding, including any sanctions or relief that may be imposed therein, in asserting or relying 

upon any such time-related defense.”   

 
FIRST CLAIM FOR RELIEF 

Aiding and Abetting Violations of Exchange Act Section 13(b)(2)(A)  
 

42. The Commission re-alleges and incorporates by reference here the allegations in 

paragraphs 1 through 41.   

43. At all relevant times, Exchange Act Section 13(b)(2)(A) [15 U.S.C. § 

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78m(b)(2)(A)] required the Issuer, as an issuer whose securities were registered pursuant to 

Section 12 of the Exchange Act [15 U.S.C. § 78l], to make and keep books, records, and 

accounts, which, in reasonable detail, accurately and fairly reflected the transactions and 

dispositions of the assets of the issuer.   

44. By engaging in the acts and conduct alleged herein, Okunak, directly or 

indirectly, singly or in concert with others, aided and abetted the Issuer in failing to make and 

keep books, records, and accounts, which, in reasonable detail, accurately and fairly reflected the 

transactions and dispositions of the assets of the issuer, in violation of Exchange Act Section 

13(b)(2)(A) [15 U.S.C. § 78m(b)(2)(A)].   

45. Among other things, Okunak aided and abetted this violation by knowingly 

directing the creation and submission of false purchase orders and invoices.   

46. By reason of the foregoing, Okunak has aided and abetted and, unless enjoined, 

will continue to aid and abet violations of Section 13(b)(2)(A) of the Exchange Act [15 U.S.C. § 

78m(b)(2)(A)]. 

SECOND CLAIM FOR RELIEF 
Violations of Exchange Act Section 13(b)(5)  

 
47. The Commission re-alleges and incorporates by reference here the allegations in 

paragraphs 1 through 41. 

48. At all relevant times, Exchange Act Section 13(b)(5) [15 U.S.C. § 78m(b)(5)] 

made it unlawful for any person to knowingly circumvent or knowingly fail to implement a 

system of internal accounting controls or knowingly falsify any books, records, or accounts that 

are described in Exchange Act Section 13(b)(2) [15 U.S.C. § 78m(b)(2)].   

49. By engaging in the acts and conduct alleged herein, Okunak knowingly 

circumvented a system of internal accounting controls and knowingly falsified books, records, or 

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accounts described in Exchange Act Section 13(b)(2)[15 U.S.C. § 78m(b)(2)], in violation of 

Exchange Act Section 13(b)(5) [15 U.S.C. § 78m(b)(5)].   

50. Among other things, Okunak committed this violation by knowingly directing the 

creation and submission of false purchase orders and invoices, and by knowingly circumventing 

internal accounting controls by submitting false certifications and otherwise evading controls 

concerning the vendor onboarding and payment process.  

51. By reason of the foregoing, Okunak violated, and unless enjoined will continue to 

violate Exchange Act Section 13(b)(5) [15 U.S.C. § 78m(b)(5)]. 

THIRD CLAIM FOR RELIEF 
Violations of Exchange Act Rule 13b2-1 

 
52. The Commission re-alleges and incorporates by reference here the allegations in 

paragraphs 1 through 41.   

53. At all relevant times, Exchange Act Rule 13b2-1 [17 C.F.R. §§ 240.13b2-1] made 

it unlawful for any person to directly or indirectly falsify or cause to be falsified any book, 

record, or account subject to Exchange Act Section 13(b)(2)(A) [15 U.S.C. § 78m(b)(2)(A)].   

54. By engaging in the acts and conduct alleged herein Okunak, directly or indirectly, 

falsified or caused to be falsified books, records, and accounts subject to Exchange Act Section 

13(b)(2)(A) [15 U.S.C. § 78m(b)(2)(A)], in violation of Exchange Act Rule 13b2-1 [17 C.F.R. 

§§ 240.13b2-1].  

55. Among other things, Okunak committed this violation by directly or indirectly 

falsifying or causing to be falsified purchase orders and invoices.     

56. By reason of the foregoing, Okunak violated, and unless enjoined will continue to 

violate, Exchange Act Rule 13b2-1 [17 C.F.R. §§ 240.13b2-1]. 

  

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PRAYER FOR RELIEF 
 

 WHEREFORE, the Commission respectfully requests that the Court enter a Judgment: 

I. 

Permanently enjoining Okunak from aiding and abetting violations of Section 

13(b)(2)(A) of the Exchange Act [15 U.S.C. § 78m(b)(2)(A)], and from violating Sections 

13(b)(5) of the Exchange Act [15 U.S.C. § 78m(b)(5)] and Rule 13b2-1 thereunder [17 C.F.R. §§ 

240.13b2-1].   

II. 

Permanently enjoining Okunak from acting as an officer or director of any issuer that has 

a class of securities registered pursuant to Section 12 of the Exchange Act [15 U.S.C. § 78l] or 

that is required to file reports pursuant to Section 15(d) of the Exchange Act [15 U.S.C. § 

78o(d)], pursuant to the Court’s authority under Section 21(d)(5) of the Exchange Act [15 U.S.C. 

§ 78u(d)(5)].   

III. 
 

Ordering Okunak, if the Court deems it appropriate upon motion of the Commission, to 

disgorge all ill-gotten gains he received directly or indirectly, with prejudgment interest thereon, 

and if so, with the amount to be determined by the Court upon motion by the Commission;  

  

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15 

IV. 

Ordering Okunak, if the Court deems it appropriate upon motion of the Commission, to 

pay civil monetary penalties under Section 21(d)(3) of the Exchange Act [15 U.S.C. § 

78u(d)(3)], and if so, with the amount to be determined by the Court upon motion of the 

Commission; and 

V. 

Granting any other and further relief this Court may deem just and proper. 

Dated: New York, New York 
July 27, 2022 

  
____________________________________ 
THOMAS P. SMITH, JR.  
ACTING REGIONAL DIRECTOR  
Sheldon L. Pollock 
Sandeep Satwalekar 
Brian A. Kudon 
Nicholas Karasimas 
Attorneys for Plaintiff 
SECURITIES AND EXCHANGE COMMISSION 
New York Regional Office 
100 Pearl Street, Suite 20-100 
New York, New York 10004-2616 
(212) 336-0086 (Karasimas)
[email protected]

/s/ Thomas P. Smith, Jr. 

Case 1:22-cv-06389   Document 1   Filed 07/27/22   Page 15 of 15


	THOMAS P. SMITH, JR.
	ACTING Regional Director
	Sheldon L. Pollock
	Sandeep Satwalekar
	Brian A. Kudon
	Nicholas Karasimas
	Attorneys for Plaintiff
	SECURITIES AND EXCHANGE COMMISSION
	New York Regional Office
	100 Pearl Street, Suite 20-100
	New York, New York 10004-2616
	(212) 336-0086 (Karasimas)
	[email protected]
	Plaintiff Securities and Exchange Commission (“Commission”), for its Complaint against Defendant Frank Okunak (“Okunak” or “Defendant”), alleges as follows:
	SUMMARY
	1. This action involves Okunak’s falsification of the books and records of a publicly traded global advertising and marketing company (the “Issuer”), and Okunak’s circumvention of the Issuer’s internal accounting controls, from approximately 2011 thro...
	2. Throughout the Relevant Period, Okunak directed the creation of, and in some cases approved for processing and payment, falsified purchase orders and invoices.  The false purchase orders and invoices purported to be for services being performed for...
	3. Okunak also circumvented the Issuer’s internal controls to aid in his misappropriation.  He routinely submitted false certifications failing to disclose, among other things, his conflicts of interest and his knowledge of any improper payments, and ...
	4. Okunak’s falsification of books and records and circumvention of internal accounting controls allowed him to misappropriate more than $16 million from the Issuer during the Relevant Period.
	VIOLATIONS
	5. By virtue of the foregoing conduct and as alleged further herein, Okunak aided and abetted violations of Section 13(b)(2)(A) of the Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. § 78m(b)(2)(A)], and violated Section 13(b)(5) of the Ex...
	6. Unless Okunak is restrained and enjoined, he will engage in the acts, practices, transactions, and courses of business set forth in this Complaint or in acts, practices, transactions, and courses of business of similar type and object.
	NATURE OF THE PROCEEDINGS AND RELIEF SOUGHT
	7. The Commission brings this action pursuant to the authority conferred upon it by Exchange Act Section 21(d) [15 U.S.C. § 78u(d)].
	8. The Commission seeks a judgment: (a) permanently enjoining Okunak from aiding and abetting violations of, or violating, the federal securities laws and rules this Complaint alleges he has violated; (b) permanently enjoining Okunak from acting as an...
	JURISDICTION AND VENUE
	9. This Court has jurisdiction over this action pursuant to Exchange Act Section 27 [15 U.S.C. § 78aa].
	10. Defendant, directly and indirectly, has made use of the means or instrumentalities of interstate commerce or of the mails in connection with the transactions, acts, practices, and courses of business alleged herein.
	11. Venue lies in this District under Exchange Act Section 27 [15 U.S.C. § 78aa].  Both the Issuer and Subsidiary maintain a principal place of business in New York, New York, and Okunak was employed at the New York, New York location at all relevant ...
	DEFENDANT
	12. Okunak, age 56, is a resident of Lyndhurst, New Jersey.  Okunak was the Global Chief Financial Officer (“CFO”) of the Subsidiary from 2009 through 2019, and its Chief Operating Officer from 2013 until he was terminated in July 2020.
	OTHER RELEVANT ENTITIES
	13. The Issuer is a Delaware corporation with its principal place of business in New York, New York.  The Issuer is a global advertising and marketing company with more than 50,000 employees.  The Issuer is a publicly traded company, listed on the New...
	14. The Subsidiary is a subsidiary of the Issuer headquartered New York, New York.  The Subsidiary is a public relations firm with more than 4,000 employees.
	15.  Okunak began working at the Subsidiary in 1995 as a financial manager, left the Subsidiary in 1999, and returned to the Subsidiary as its North American CFO in 2001.  He was promoted to Global CFO of the Subsidiary in 2009, and promoted to Global...
	16. During the Relevant Period, Okunak became involved with, and held financial interests in, a number of entities outside of his employment at the Subsidiary.  Okunak arranged for certain of these entities to become vendors of the Issuer, and directe...
	17. In total, Okunak misappropriated more than $16 million from the Issuer during the Relevant Period.  Of that amount, Okunak misappropriated approximately $11.5 million during the period covered by the relevant statute of limitations, as modified by...
	II. Okunak’s falsification of THE Issuer’s Books and Records
	18. Throughout the Relevant Period, Okunak directed the Issuer to make payments to entities for services that did not relate to work performed for the Issuer or the Subsidiary, pursuant to invoices and purchase orders.  These invoices and purchaser or...
	19. Typically, Okunak directed the creation of a purchase order by emailing instructions containing the entity, the amount, and the description of the services being performed to a Senior Business Analyst (“Employee A”) who reported directly to him.0F...
	20. In total and including the specific instances discussed below, Okunak misappropriated approximately $16 million during the Relevant Period.
	21. For example, Okunak directed the Issuer, based on falsified purchase orders and invoices, to make payments totaling $2.5 million to an e-sports and entertainment event company that he owned and controlled (“Company A”).  Company A, however, did no...
	22. In some instances, Okunak took specific steps to alter vendor invoices to make it appear as though the services being provided were related to the Issuer, obscure the true nature of the payment, or otherwise create a level of generality that would...
	23. For example, in November 2018, Okunak received an invoice for approximately $77,000 from an entity (“Company B”) that had performed services for a company he had an interest in (“Company C”).  These services provided by Company B to Company C were...
	24. Okunak also falsified purchase orders and invoices to facilitate payment for certain personal expenses.  For example, in June 2017, a large sports complex operator reached out to Okunak concerning his outstanding suite license fee of approximately...
	25. As a result of Okunak’s conduct, the Issuer maintained books and records that did not fairly and accurately reflect the nature of the transactions to which they related, or accurately reflect the nature of the disposition of the Issuer’s assets.
	III. OKUNAK’S CIRCUMVENTION OF THE ISSUER’S INTERNAL ACCOUNTING CONTROLS
	26. During the Relevant Period, Okunak circumvented the Issuer’s internal accounting controls in multiple ways, including by executing false certifications concerning his conflicts of interest and knowledge of misconduct, and manipulating the Issuer’s...
	A.  Falsification of Certifications
	27. As part of its internal control framework, the Issuer required its officers and directors, including those at subsidiary companies such as the Subsidiary, to disclose any interests in the Issuer’s or its subsidiaries’ vendors.  As part of this pro...
	28. The Disclosure and Certification form provided the opportunity to disclose any conflicts of interest and contained a series of “yes” or “no” questions related to potential conflicts with vendors or clients.  For example, the Disclosure and Certifi...
	29. Okunak also acknowledged on the Disclosure and Certification form that he had the opportunity to review the Issuer’s Code of Conduct, and understood that he must seek advice and counsel from the Issuer’s human resource, legal, or risk functions be...
	30. In addition, the Issuer relied on a certification and sub-certification process to gather information, which formed the basis of representations made to the Issuer’s auditor by senior management.
	31. As part of this process, in addition to certifying conformity with GAAP and certifying as to the accuracy of the financial statements, Okunak regularly falsely confirmed to the Issuer, among other things:
	(i) that he had no knowledge of any employee being involved in the making of any payments for which no goods or services were provided, unusual billing practices, or completing transactions that were not fully and accurately reported in the company’s ...
	(ii) that there were no undisclosed side agreements;
	(iii) that he had no knowledge of fraud or suspected fraud, by Senior Management, Management or other employees with significant responsibility in internal controls over financial reporting; and
	(iv) that he was not aware of payments which were deliberately disguised in the accounting records or attempts to conceal transactions or payment made by or on behalf of the Issuer or one of its affiliates.
	32. Okunak’s responses, representations, and certifications on the above-mentioned documents were knowingly false.  Okunak knew that he had a significant interest in entities he was causing the Issuer to pay.  Okunak knew that he had utilized falsifie...
	B.  Circumvention of the Vendor Onboarding and Payment Processes
	33. During the Relevant Period, Okunak also circumvented internal controls in the vendor onboarding process by submitting false information on the Issuer’s vendor onboarding form with respect to Company A, and circumvented the process by which expense...
	34. A number of vendors or entities to which Okunak directed payments were “new” vendors that did not previously exist within the Issuer’s database, and as a result needed to be onboarded to ensure payment.
	35. At the onboarding stage, Okunak circumvented internal controls by directing certain vendors to be onboarded without disclosing his interest in that vendor, which would have triggered additional scrutiny.
	36. With respect to Company A, Okunak submitted false and misleading information on a vendor information form required by the Issuer.  Specifically, Okunak listed a relative (who has a different surname) as the owner and CEO of Company A.  Despite inc...
	37. During the Relevant Period, to remit a payment to a vendor, the Issuer required an approved purchase order, or in some instances, an approved non-purchase order invoice.  The preparation and approval of purchase orders and invoices for payment was...
	38.   Okunak directed Employee A to create all or nearly all of the purchase orders at issue.  Okunak sent email instructions to Employee A regarding purchase orders to be generated, and by doing so, falsely suggested that the purchase orders were rel...
	39. Similarly, Okunak circumvented and interfered with the process by which purchase orders or invoices were approved.  In some instances, Okunak provided a level of approval for an invoice or purchase order, and in these cases, did so knowing that th...
	40. Through the conduct described above, Okunak knowingly circumvented the Issuer’s system of internal accounting controls.
	TOLLING AGREEMENTS
	41. On December 8, 2021, March 2, 2022, May 16, 2022, and July 6, 2022, Okunak entered into Tolling Agreements with the Commission.  The Tolling Agreements specify a period of time (a “tolling period”) in which the “running of any statute of limitatio...
	Aiding and Abetting Violations of Exchange Act Section 13(b)(2)(A)
	42. The Commission re-alleges and incorporates by reference here the allegations in paragraphs 1 through 41.
	43. At all relevant times, Exchange Act Section 13(b)(2)(A) [15 U.S.C. § 78m(b)(2)(A)] required the Issuer, as an issuer whose securities were registered pursuant to Section 12 of the Exchange Act [15 U.S.C. § 78l], to make and keep books, records, an...
	44. By engaging in the acts and conduct alleged herein, Okunak, directly or indirectly, singly or in concert with others, aided and abetted the Issuer in failing to make and keep books, records, and accounts, which, in reasonable detail, accurately an...
	45. Among other things, Okunak aided and abetted this violation by knowingly directing the creation and submission of false purchase orders and invoices.
	46. By reason of the foregoing, Okunak has aided and abetted and, unless enjoined, will continue to aid and abet violations of Section 13(b)(2)(A) of the Exchange Act [15 U.S.C. § 78m(b)(2)(A)].
	Violations of Exchange Act Section 13(b)(5)
	47. The Commission re-alleges and incorporates by reference here the allegations in paragraphs 1 through 41.
	48. At all relevant times, Exchange Act Section 13(b)(5) [15 U.S.C. § 78m(b)(5)] made it unlawful for any person to knowingly circumvent or knowingly fail to implement a system of internal accounting controls or knowingly falsify any books, records, o...
	49. By engaging in the acts and conduct alleged herein, Okunak knowingly circumvented a system of internal accounting controls and knowingly falsified books, records, or accounts described in Exchange Act Section 13(b)(2)[15 U.S.C. § 78m(b)(2)], in vi...
	50. Among other things, Okunak committed this violation by knowingly directing the creation and submission of false purchase orders and invoices, and by knowingly circumventing internal accounting controls by submitting false certifications and otherw...
	51. By reason of the foregoing, Okunak violated, and unless enjoined will continue to violate Exchange Act Section 13(b)(5) [15 U.S.C. § 78m(b)(5)].
	Violations of Exchange Act Rule 13b2-1
	52. The Commission re-alleges and incorporates by reference here the allegations in paragraphs 1 through 41.
	53. At all relevant times, Exchange Act Rule 13b2-1 [17 C.F.R. §§ 240.13b2-1] made it unlawful for any person to directly or indirectly falsify or cause to be falsified any book, record, or account subject to Exchange Act Section 13(b)(2)(A) [15 U.S.C...
	54. By engaging in the acts and conduct alleged herein Okunak, directly or indirectly, falsified or caused to be falsified books, records, and accounts subject to Exchange Act Section 13(b)(2)(A) [15 U.S.C. § 78m(b)(2)(A)], in violation of Exchange Ac...
	55. Among other things, Okunak committed this violation by directly or indirectly falsifying or causing to be falsified purchase orders and invoices.
	56. By reason of the foregoing, Okunak violated, and unless enjoined will continue to violate, Exchange Act Rule 13b2-1 [17 C.F.R. §§ 240.13b2-1].
	Dated: New York, New York
	THOMAS P. SMITH, JR.
	Sheldon L. Pollock
	Sandeep Satwalekar
	Brian A. Kudon
	Nicholas Karasimas
	Attorneys for Plaintiff
	SECURITIES AND EXCHANGE COMMISSION
	New York Regional Office
	100 Pearl Street, Suite 20-100
	New York, New York 10004-2616
	(212) 336-0086 (Karasimas)
	[email protected]