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SEC LITIGATION RELEASE
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EXTRACTED KEY WORDS
INVESTMENT COMPLAINT COMPLAINT ALLEGES REGISTRATION STATEMENT ASSETS SECURITIES DELOITTE MANAGER FELONY UNDERWRITERS FRAUD EXCHANGE COMMISSION NORMANDY DISCLOSE REPRESENTATIVES UNITED STATES OFFERING FALSE STATEMENTS ACCORDING BANK LETTERS INTERVIEW AFFILIATES CIVIL DISTRICT YORK ENGAGEMENT OFFSHORE STRUCTURES REQUESTS |
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
LITIGATION RELEASE NO. 15075 / September 26, 1996
ACCOUNTING AND AUDITING ENFORCEMENT
RELEASE NO. 825 / September 26, 1996
SECURITIES AND EXCHANGE COMMISSION v. CHRISTOPHER KENT
BAGDASARIAN AND SAM LANCE WHITE Civil Action No.
96-CV-7306 (S.D.N.Y.)
The Securities and Exchange Commission today filed a civil
fraud action against Christopher Kent Bagdasarian and Sam Lance
White in the United States District Court for the Southern
District of New York. The Commission's complaint alleges that
Bagdasarian, Normandy America Inc.'s CEO and Chairman of the
Board, and White, a tax partner in Deloitte & Touche LLP's Los
Angeles office at the time of the fraud, engaged in a fraudulent
scheme to fabricate Bagdasarian's investment track record that
was included in the registration statement for Normandy's $200
million initial public offering. Normandy was a reinsurance
company with no financial or operating history whose business
plan depended on its ability, through Bagdasarian, successfully
to invest reinsurance premiums in equity securities. Normandy's
stock commenced trading on the NASDAQ National Market System on
August 15, 1995. One day later, Normandy withdrew its offering
from the market and rescinded all trades.
The Commission's complaint alleges that the underwriters
told Bagdasarian, White and others that the offering could not be
sold without substantial disclosure concerning Bagdasarian's past
investment results. Normandy's registration statement
represented that Bagdasarian, a thirty-year old money manager,
had achieved a ten-year average annual return of 29.1%, managing
assets ranging from $250.6 million in 1990 to $731.3 million
during 1994. The registration statement also represented that
Bagdasarian's performance results were based on all of the assets
that he managed and resulted solely from his own investment
decisions. The complaint alleges that each of these statements
was materially false and misleading because Bagdasarian and White
fabricated the assets and the investment results.
According to the complaint, Bagdasarian and White told the
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