NEW YORK — Candie’s Inc. and several of its current and former key executives consented to cease-and-desist orders to be entered against them after the Securities and Exchange Commission on Wednesday filed lawsuits in Manhattan federal...
NEW YORK — Candie’s Inc. and several of its current and former key executives consented to cease-and-desist orders to be entered against them after the Securities and Exchange Commission on Wednesday filed lawsuits in Manhattan federal court alleging improper revenue recognition that inflated the company’s apparel sales.
Named as defendants were Candie’s chairman and chief executive officer Neil Cole, a former director, four former financial executives and an individual at a bartering firm that did business with Candie’s. With the exception of one former vice president of finance, all of the defendants agreed to the entry of injunctions and cease-and-desist orders against them, without admitting or denying guilt.
A Manhattan federal court must approve the settlements.
Cole agreed to pay a civil penalty of $75,000. He was charged with ignoring red flags concerning the firm’s accounting procedures and also with failing to prevent the company from recognizing revenue from the alleged improper practices.
Some of the other defendants also agreed to pay civil penalties ranging from $25,000 up to $100,000.
The agreements by the defendants have the effect of a settlement of the SEC investigation and actions against them. If approved, no other actions could be taken against the company or individuals involved. The investigation, ongoing since 1997, involved improper recognition of more than $3.1 million in revenue.
A hearing has not been scheduled since the court will likely render its approval based on the legal documents filed, according to Mark Schonfeld, associate regional director for the SEC in New York.
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