Acct Week 7 Assignment

982 Words Oct 15th, 2014 4 Pages
Access the "Litigation" section of the SEC's website at www.sec.gov/litigation.shtml. Click on "Accounting and Auditing Enforcement Releases." Click on "AAER-3234" filed January 20, 2011. Read the release and the related SEC Complaint. Summarize the release and complaint in 2-3 pages (12-point, double spaced).

U. S Securities and Exchange Commission
Litigation Release No. 21819/ January 20, 2011
Accounting and Auditing Release No. 3234/ January 20, 2011
Securities and Exchange Commission v. NutraCea et al., United States District of Arizona, Civil Action No. CV 11-0092-PHX-DGC

Summary:

This release explains how NutraCea, a company based out of Phoenix, Arizona that manufactures and sells health food products, was involved in a very
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Moreover, NutraCea also inappropriately documented revenue on a bill and hold Transaction in regards to a $1.9 million sale of product to ITV Global, Inc. in the 4th quarter of 2007. Which resulted in a misstatement of NutraCea’s operating loss of by over 89% in the 2nd quarter, 17.6% in the 3rd quarter and close to 7% in total all for the fiscal year 2007. To put the icing on the cake NutraCea misstated Form 10-K for the fiscal year 2007.

All parties involved in the accounting scheme except for Former CFO, Todd C. Crow agreed to settle out of court (subject to the approval of the U.S District court of Arizona) without confessing or refuting any fault. The parties involved included:

NutraCea who consented to:
1) a permanent order from all future violations of “Section 17(a) of the Securities Act of 1933 ("Securities Act"), Sections 10(b), 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Securities Exchange Act of 1934 ("Exchange Act"), and Rules 10b-5, 12b-20, 13a-1, and 13a-13 thereunder.”

Former CEO, Bradley D. Edison, who consented to:
1) a permanent order from all future violations of “Section 17(a) of the Securities Act, Sections 10(b) and 13(b)(5) of the Exchange Act, and Rules 10b-5, 13a-14, 13b2-1, and 13b2-2 thereunder, and for aiding and abetting violations of Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act, and Rules 12b-20, 13a-1, and 13a-13