SEC Press press_release 8 KB 4,883 chars

Press Release: SEC Files Settled Charges Against Eight Former Officers and Directors of Spiegel, Inc.; 2006-184; Nov. 2, 2006

Release
2006-184
Caption
Securities and Exchange Commission v. Against Eight Former Officers and Directors of Spiegel, Inc., et al.
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summary

Eight former Spiegel, Inc. officers and directors were charged by the SEC for overstating credit card receivables performance via inflated inter-company fees and withholding required financial filings to avoid a 'going concern' auditor opinion, resulting in combined civil penalties of $850,000 and permanent injunctions.

paragraph

The SEC alleged that former Co-Presidents Michael Moran and James Sievers, CEO Martin Zaepfel, CFO James Cannataro, and Treasurer John Steele artificially inflated inter-company fees between Spiegel’s retail and bank subsidiaries to mask the deterioration of its credit card receivables portfolio, enabling improper securitization. Simultaneously, former Chairman Michael Otto, directors Michael Crusemann and Horst Hansen, along with Zaepfel, deliberately withheld the filing of Spiegel’s 2001 Form 10-K and Q1 2002 Form 10-Q to avoid an auditor’s 'going concern' opinion. Without admitting or denying guilt, Moran, Sievers, Cannataro, and Steele each paid $120,000 in civil penalties; Otto and Crusemann paid $100,000 each; Zaepfel paid $170,000; and Hansen agreed to a cease-and-desist order, with all eight consenting to permanent injunctions.

narrative

The SEC filed settled enforcement actions against eight former officers and directors of Spiegel, Inc., accusing them of securities fraud related to financial misstatements and deliberate reporting failures. Former Co-Presidents Michael Moran and James Sievers, CEO Martin Zaepfel, CFO James Cannataro, and Treasurer John Steele manipulated inter-company fees between Spiegel’s retail subsidiaries and its bank subsidiary to artificially inflate the performance of its credit card receivables portfolio, allowing the company to improperly securitize deteriorating assets. Meanwhile, former Chairman Michael Otto, directors Michael Crusemann and Horst Hansen, and Zaepfel conspired to withhold the filing of Spiegel’s 2001 Form 10-K and first quarter 2002 Form 10-Q after the company’s outside auditor warned that a 'going concern' opinion would be issued if the financial problems were disclosed. By avoiding these filings, the defendants concealed the company’s true financial distress from investors. Without admitting or denying the allegations, Moran, Sievers, Cannataro, and Steele each paid a $120,000 civil penalty; Otto and Crusemann paid $100,000 each; Zaepfel paid $170,000; and Hansen agreed to a cease-and-desist order. All eight individuals consented to permanent injunctions barring future violations of federal securities laws. The SEC emphasized that this case underscored its commitment to holding senior corporate leaders accountable for misleading investors and evading regulatory transparency.

Enriched metadata

Scheme
financial-fraud (100%)
Outcome
settled
Civil penalty
$170,000
Classified financial-fraud(confidence 100%). EDGAR detection: forms 10-K/10-Q/8-K/NT 10-K· recall 67% / precision 23%. detection rule →
Statutes
Sections 17(a)(2) and 17(a)(3) of the Securities ActSections 17(a)(2) and 17(a)(3) of the Securities ActSections 17(a)(2) and 17(a)(3) of the Securities Act
Parties
against eight former officers and directors of spiegel, inc.former officerslinda chatman thomsenmerri jo gilletteSecurities and Exchange Commissionsettled charges against eight former officers and directors of spiegel, inc.the securities and exchange commission
Keywords
formerdirectorsspiegelspiegel'sformer officerscommissionzaepfelfinancialsettled againstagainst eighteight formerofficers directorsdirectors spiegelmoran sieverscannataro steele

Exhibits & Attached Documents (1)

Extracted insights

Dollar amounts 3
  • $170K $170,000 $100K–$1M
  • $120K $120,000 $100K–$1M
  • $100K $100,000 $100K–$1M
Entities 7
  • company against eight former officers and directors of spiegel, inc.
  • person former officers
  • person linda chatman thomsen
  • person merri jo gillette
  • agency Securities and Exchange Commission
  • company settled charges against eight former officers and directors of spiegel, inc.
  • agency the securities and exchange commission
Triples 14
  • Sec Files Settled Charges Against Eight Former Officers and Directors of Spiegel, Inc.
  • Former Officers Charged With Overstating Performance of Credit Card Receivables Portfolio
  • Former Chairman, Directors and CEO Charged for Decision Withhold Filing of Spiegel's Required Financial Reports
  • The Securities and Exchange Commission Filed Settled Enforcement Actions Against Eight Former Officers and Directors of Spiegel, Inc.
  • The Commission Settled With Former Chairman of Spiegel's Board of Directors, Michael Otto, Two Former Directors, Michael Crusemann and Horst Hansen, and Former CEO Martin Zaepfel
  • Linda Chatman Thomsen Said The Commission's action against the Spiegel directors demonstrates that the Commission will hold those at the highest corporate ranks accountable for their conduct.
  • Merri Jo Gillette Said This enforcement action demonstrates the Commission's continuing resolve to hold individuals responsible when they contribute to a company's misstatement of financial information to the investing public.
  • The Commission Alleges Moran, Sievers, Zaepfel, Cannataro and Steele improperly increased inter-company fees between Spiegel's retail subsidiaries and Spiegel's bank subsidiary
  • The Commission Alleged Former Directors Otto, Crusemann and Hansen and former CEO Zaepfel all participated in the decision to not file Spiegel's 2001 Form 10-K and first quarter 2002 Form 10-Q on a timely basis
  • Spiegel's outside auditor Informed The company that a 'going concern' opinion would accompany the filing unless Spiegel was able to resolve its underlying financial problems
  • The Commission Alleged Moran, Sievers, Zaepfel, Cannataro and Steele violated Sections 17(a)(2) and 17(a)(3) of the Securities Act of 1933 and violated and aided and abetted violations of various books and records and financial reporting provisions of the Securities Exchange Act of 1934
  • The Commission Alleged Otto, Crusemann and Zaepfel aided and abetted Spiegel's violations of the financial reporting provisions of the Exchange Act
  • The Commission Alleged Hansen was a cause of Spiegel's violations of these reporting provisions
  • Moran, Sievers, Cannataro, Steele, Otto, Crusemann and Zaepfel Consented to The Court's issuance of an order of permanent injunction enjoining them from future violations of the federal securities laws
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SEC Files Settled Charges Against Eight Former Officers and Directors of Spiegel, Inc. Former Officers Charged With Overstating Performance of Credit Card Receivables Portfolio; Former Chairman, Directors and CEO Charged for Decision to Withhold Filing of Spiegel's Required Financial Reports FOR IMMEDIATE RELEASE 2006-184 Washington, D.C., Nov. 2, 2006 - The Securities and Exchange Commission today filed settled enforcement actions against eight former officers and directors of Spiegel, Inc., an Illinois-based public company. During the relevant period, Spiegel owned and operated catalogue retailers Spiegel, Eddie Bauer and Newport News. The Commission filed settled charges against the former Co-Presidents of Spiegel, Michael Moran and James Sievers, former CEO Martin Zaepfel, former CFO James Cannataro, and former Treasurer John Steele, in connection with the overstatement of the performance of Spiegel's credit card receivables portfolio. In addition, the Commission settled with the former Chairman of Spiegel's Board of Directors, Michael Otto, two former directors, Michael Crusemann and Horst Hansen, and former CEO Martin Zaepfel in connection with the decision to withhold Spiegel's required financial reports to avoid issuance by its outside auditor of a "going concern" opinion. Linda Chatman Thomsen, Director of the Commission's Division of Enforcement, said, "The Commission's action against the Spiegel directors demonstrates that the Commission will hold those at the highest corporate ranks accountable for their conduct. Directors who keep important financial information from the investing public by purposely failing to file required financial reports will be sanctioned. Shareholders and investors deserve to know the unadulterated truth." Merri Jo Gillette, Director of the Commission's Midwest Regional Office, said, "This enforcement action demonstrates the Commission's continuing resolve to hold individuals responsible when they contribute to a company's misstatement of financial information to the investing public." The Commission alleges in its complaints that Moran, Sievers, Zaepfel, Cannataro and Steele improperly increased inter-company fees between Spiegel's retail subsidiaries and Spiegel's bank subsidiary, which had the effect of hiding the deteriorating performance of the company's credit card receivables portfolio. Spiegel was thus able to benefit improperly from the securitization of that portfolio. The Commission also alleged that former Directors Otto, Crusemann and Hansen and former CEO Zaepfel all participated in the decision to not file Spiegel's 2001 Form 10-K and first quarter 2002 Form 10-Q on a timely basis. Prior to the deadline for the filing of the Form 10-K, Spiegel's outside auditor informed the company that a "going concern" opinion would accompany the filing unless Spiegel was able to resolve its underlying financial problems. When it failed to resolve those problems by the April 15, 2002 deadline, the company improperly elected to withhold its filing rather than make the required disclosures to the investing public. In light of the above, the Commission alleged that Moran, Sievers, Zaepfel, Cannataro and Steele violated Sections 17(a)(2) and 17(a)(3) of the Securities Act of 1933 and violated and aided and abetted violations of various books and records and financial reporting provisions of the Securities Exchange Act of 1934. The Commission also alleged that Otto, Crusemann and Zaepfel aided and abetted Spiegel's violations of the financial reporting provisions of the Exchange Act. Finally, the Commission alleged that Hansen was a cause of Spiegel's violations of these reporting provisions. Without admitting or denying the Commission's allegations, Moran, Sievers, Cannataro, Steele, Otto, Crusemann and Zaepfel have consented to the Court's issuance of an order of permanent injunction enjoining them from future violations of the federal securities laws. In addition, Moran, Sievers, Cannataro and Steele have consented to each pay a civil penalty of $120,000. Otto and Crusemann have consented to each pay a civil penalty of $100,000. Zaepfel has consented to pay a civil penalty of $170,000. Finally, without admitting or denying the Commission's findings, Hansen has consented to the Commission's entry of an order ordering him to cease and desist from committing or causing future violations of the reporting provisions of the federal securities laws. # # # For further information, contact: Peter K.M. Chan (312) 353-7410 Additional materials: Litigation Release 19897 Complaint: Michael Crusemann and Michael Otto Complaint: John R. Steele Complaint: Martin Zaepfel Complaint: James R. Cannataro Complaint: Michael R. Moran and James W. Sievers Administrative Proceeding No. 34-54689 http://www.sec.gov/news/press/2006/2006-184.htm Home | Previous Page Modified: 11/02/2006
OCR text (4,883c · plain-text · 99% conf) 
SEC Files Settled Charges Against Eight Former Officers and Directors of Spiegel, Inc. Former Officers Charged With Overstating Performance of Credit Card Receivables Portfolio; Former Chairman, Directors and CEO Charged for Decision to Withhold Filing of Spiegel's Required Financial Reports FOR IMMEDIATE RELEASE 2006-184 Washington, D.C., Nov. 2, 2006 - The Securities and Exchange Commission today filed settled enforcement actions against eight former officers and directors of Spiegel, Inc., an Illinois-based public company. During the relevant period, Spiegel owned and operated catalogue retailers Spiegel, Eddie Bauer and Newport News. The Commission filed settled charges against the former Co-Presidents of Spiegel, Michael Moran and James Sievers, former CEO Martin Zaepfel, former CFO James Cannataro, and former Treasurer John Steele, in connection with the overstatement of the performance of Spiegel's credit card receivables portfolio. In addition, the Commission settled with the former Chairman of Spiegel's Board of Directors, Michael Otto, two former directors, Michael Crusemann and Horst Hansen, and former CEO Martin Zaepfel in connection with the decision to withhold Spiegel's required financial reports to avoid issuance by its outside auditor of a "going concern" opinion. Linda Chatman Thomsen, Director of the Commission's Division of Enforcement, said, "The Commission's action against the Spiegel directors demonstrates that the Commission will hold those at the highest corporate ranks accountable for their conduct. Directors who keep important financial information from the investing public by purposely failing to file required financial reports will be sanctioned. Shareholders and investors deserve to know the unadulterated truth." Merri Jo Gillette, Director of the Commission's Midwest Regional Office, said, "This enforcement action demonstrates the Commission's continuing resolve to hold individuals responsible when they contribute to a company's misstatement of financial information to the investing public." The Commission alleges in its complaints that Moran, Sievers, Zaepfel, Cannataro and Steele improperly increased inter-company fees between Spiegel's retail subsidiaries and Spiegel's bank subsidiary, which had the effect of hiding the deteriorating performance of the company's credit card receivables portfolio. Spiegel was thus able to benefit improperly from the securitization of that portfolio. The Commission also alleged that former Directors Otto, Crusemann and Hansen and former CEO Zaepfel all participated in the decision to not file Spiegel's 2001 Form 10-K and first quarter 2002 Form 10-Q on a timely basis. Prior to the deadline for the filing of the Form 10-K, Spiegel's outside auditor informed the company that a "going concern" opinion would accompany the filing unless Spiegel was able to resolve its underlying financial problems. When it failed to resolve those problems by the April 15, 2002 deadline, the company improperly elected to withhold its filing rather than make the required disclosures to the investing public. In light of the above, the Commission alleged that Moran, Sievers, Zaepfel, Cannataro and Steele violated Sections 17(a)(2) and 17(a)(3) of the Securities Act of 1933 and violated and aided and abetted violations of various books and records and financial reporting provisions of the Securities Exchange Act of 1934. The Commission also alleged that Otto, Crusemann and Zaepfel aided and abetted Spiegel's violations of the financial reporting provisions of the Exchange Act. Finally, the Commission alleged that Hansen was a cause of Spiegel's violations of these reporting provisions. Without admitting or denying the Commission's allegations, Moran, Sievers, Cannataro, Steele, Otto, Crusemann and Zaepfel have consented to the Court's issuance of an order of permanent injunction enjoining them from future violations of the federal securities laws. In addition, Moran, Sievers, Cannataro and Steele have consented to each pay a civil penalty of $120,000. Otto and Crusemann have consented to each pay a civil penalty of $100,000. Zaepfel has consented to pay a civil penalty of $170,000. Finally, without admitting or denying the Commission's findings, Hansen has consented to the Commission's entry of an order ordering him to cease and desist from committing or causing future violations of the reporting provisions of the federal securities laws. # # # For further information, contact: Peter K.M. Chan (312) 353-7410 Additional materials: Litigation Release 19897 Complaint: Michael Crusemann and Michael Otto Complaint: John R. Steele Complaint: Martin Zaepfel Complaint: James R. Cannataro Complaint: Michael R. Moran and James W. Sievers Administrative Proceeding No. 34-54689 http://www.sec.gov/news/press/2006/2006-184.htm Home | Previous Page Modified: 11/02/2006

Related documents (1)