UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION
SECURITIES EXCHANGE ACT OF 1934
Release No. 42934 / June 14, 2000
ACCOUNTING AND AUDITING ENFORCEMENT
Release No. 1273 / June 14, 2000
ADMINISTRATIVE PROCEEDING
File No. 3-10226
_________________________________________________________________
In the Matter of
PAUL HIZNAY,
Respondent.
_________________________________________________________________
ORDER INSTITUTING PUBLIC
ADMINISTRATIVE PROCEEDINGS
PURSUANT TO SECTION 21C OF THE
SECURITIES EXCHANGE ACT OF 1934,
MAKING FINDINGS, AND IMPOSING
A CEASE-AND-DESIST ORDER
I.
The Securities and Exchange Commission ("Commission") deems it
appropriate that public administrative proceedings be, and hereby are,
instituted pursuant to Section 21C of the Securities Exchange Act of
1934 ("Exchange Act") against Paul Hiznay ("Hiznay" or "Respondent").
II.
In anticipation of the institution of these administrative
proceedings, Hiznay has submitted an Offer of Settlement ("Offer")
which the Commission has determined to accept. Solely for the purpose
of these proceedings, and any other proceedings brought by or on
behalf of the Commission, or in which the Commission is a party,
without admitting or denying the findings set forth below, except as
to jurisdiction of the Commission over him and over the subject matter
of these proceedings, which Respondent admits, Respondent consents to
the entry of this Order Instituting Public Administrative Proceedings
Pursuant to Section 21C of the Securities Exchange Act of 1934, Making
SNIPPETS:
SECURITIES AND EXCHANGE COMMISSION
ORDER INSTITUTING PUBLIC ADMINISTRATIVE PROCEEDINGS PURSUANT TO SECTION 21C OF THE SECURITIES
The Securities and Exchange Commission deems it appropriate that public administrative
Paul Hiznay, age 37, was a mid-level Accounting Manager at the Comp-U-Card division of CUC
Cendant Corporation, a Delaware corporation with its headquarters in New York City, was
As of March 1, 2000, Cendant's common stock, Income PRIDES, and Growth PRIDES were registered
certain members of CUC's senior management implemented a scheme designed to ensure that CUC
The CUC senior managers also improperly utilized two liability accounts related to membership
By manipulating the timing of the write-offs and by improperly determining the nature of the
In early 1997, at the direction of senior management, Hiznay approved a series of entries
CUC paid commissions to certain institutions on sales of Comp-U-Card membership products sold
Furthermore, in connection with the January 31, 1997, fiscal year-end, senior management
The entries reversed the liability account directly into revenues, a treatment that, under
Because $2.85 million of the improper February 1997 commissions payable reversals had
This second schedule listed the amounts, effective back-dates, and accounts for seventy-seven
During his time at the Comp-U-Card division, Hiznay inherited, but then supervised, a
Between Hiznay's arrival at Comp-U-Card in July 1995 and the discovery of the fraudulent
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