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1
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SEC LITIGATION RELEASE
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EXTRACTED KEY WORDS
COMPLAINT CONTRACTS EXCHANGE OFFICER REVENUE CHIEF FINANCIAL OFFICER CUSTOMERS SECURITIES INDIVIDUAL DEFENDANTS GENERAL COUNSEL EXCHANGE COMMISSION ACCOUNTING PRACTICES REPORTING CONTROLLING VIOLATIONS EXCHANGE ACT NEGOTIATIONS POLICY MANAGEMENT SYSTEMS GEORGE LARRY WILSON GRESHAM BROWN BAILEY MAZON CIVIL ACCORDING EXECUTIVE VICE PRESIDENT REVENUE RECOGNITION POLICIES AUDITORS |
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 15417 / July 23, 1997
Accounting and Auditing Enforcement
Release No. 939 / July 23, 1997
Securities and Exchange Commission vs. Policy Management Systems
Corporation, George Larry Wilson, Robert L. Gresham, James P. Brown,
David
T. Bailey and Bernard C. Mazon, Civil Action No. 3:97-2193-10 (D.S.C.
July
22, 1997)
The Securities and Exchange Commission announced today that it had
sued
Policy Management Systems Corporation of Columbia, South Carolina
("PMSC")
and five of its current and former officers. PMSC is engaged in the
business of developing and licensing software used by insurance
companies
and its securities are listed and trade on the New York Stock Exchange.
The SEC alleged in its complaint that from January 1991 through March
1993
PMSC and various of its employees engaged in a number of improper
accounting practices which materially misstated PMSC s results of
operations. These practices included the use of side letters to modify
the
terms of contracts, an undisclosed billing arrangement with one
customer,
undisclosed prebilling arrangements with other customers, and various
practices which had the effect of holding the books open beyond the end
of
several reporting periods. The SEC also alleged that at the end of
several
reporting periods PMSC and certain of its employees recorded revenue
from
contracts which had not yet been finalized with customers. According
to
the SEC complaint, these practices, which did not comply with
generally
accepted accounting principles or PMSC's own publicly stated
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