U.S. Securities and Exchange Commission , Civ. Action No. 00CV00475

   Litigation Release No. 16466 / March 8, 2000

Accounting and Auditing Enforcement Release No. 1234 / March 8, 2000

SEC Files Settled Financial Fraud Case Against Inamed Corporation's
Former CEO Donald McGhan

   The Securities and Exchange Commission filed today a settled civil
   injunctive action against Donald K. McGhan, Inamed Corporation's
   former Chairman and Chief Executive Officer. The complaint alleges
   that in 1996 and 1997, Inamed Corporation, a publicly owned breast
   implant manufacturer, made materially false and misleading statements
   and omissions in its financial statements and periodic reports filed
   with the Commission and in press releases distributed to the investing
   public. As Inamed's former Chairman and Chief Executive Officer,
   McGhan was responsible for the company's public financial disclosures
   and either knew or was reckless in not knowing of the company's
   materially false and misleading statements and omissions during this
   period. Without admitting or denying the allegations of the complaint,
   McGhan consented to the entry of a final judgment permanently
   enjoining him from violating the antifraud, record-keeping and
   internal controls provisions of the federal securities laws (Sections
   10(b) and 13(b)(5) of the Securities Exchange Act of 1934 and Rules
   10b-5 and 13b2-1, thereunder), and ordering him to pay a $50,000 civil
   penalty.

   The complaint alleges that Inamed failed to record a $1.4 million
   interest expense relating to a waiver of an indenture default and thus
   materially overstated income and shareholder equity for the quarter
   ended June 30, 1996. McGhan signed the Form 10-Q and knew or was
   reckless in not knowing that it contained false and misleading
   financial statements. For the quarter ended September 30, 1996, the
   complaint alleges that McGhan knowingly or recklessly caused Inamed to
   improperly reduce the allowance for product returns by nearly $1.9
   million from the prior quarter, which resulted in material
   overstatements in Inamed's pre-tax income and shareholder equity.

   The complaint also alleges that between May and September 1997, McGhan
   was unable to resolve Inamed's several outstanding issues with its
   auditors. On September 9, 1997, over five months after the required
   filing date, McGhan reviewed and authorized Inamed's filing of its
   Annual Report on Form 10-K with unaudited financial statements. Where
   the auditor's report should have been located in the Form 10-K, Inamed
   simply inserted the notation "To Come." McGhan caused Inamed to make
   the filing without informing its auditors, whose work on the audit
   continued, and without a chief financial officer to review the