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1
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SEC ADMINISTRATIVE PROCEEDING
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EXTRACTED KEY WORDS
ACCOUNTING PICARDI FINANCIAL STATEMENTS REVIEW PRACTICE RESPONSIBILITY PREPARATION SULCUS REINSTATEMENT SECURITIES SUSPENSION PURSUANT RECORDING AUDIT COMMITTEE INDEPENDENT AUDIT COMMITTEE STAFF EXCHANGE ACT JOHN PICARDI DECREASE CONNECTION ACQUISITIONS CHIEF FINANCIAL OFFICER SHG PURCHASE IMPROPER NET INCOME HOSPITALITY PARTICIPATION BUSINESS |
UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION
SECURITIES EXCHANGE ACT OF 1934
Release No. 41945 / September 29, 1999
ACCOUNTING AND AUDITING ENFORCEMENT
RELEASE NO. 1188 / September 29, 1999
ADMINISTRATIVE PROCEEDING FILE NO. 3-8996
In the Matter of
John Picardi
Order Granting Application for Reinstatement To Practice as an
Accountant Responsible for the Preparation or Review of Financial
Statements Required To Be Filed With the Commission
On May 2, 1996, John Picardi ("Picardi") was suspended by the
Commission from practicing as an accountant before the Commission as a
result of an agreement reached with Picardi in settlement of public
administrative proceedings instituted by the Commission against
Picardi pursuant to Section 8A of the Securities Act, Section 21C of
the Exchange Act and Rule 102(e) of the Commission's Rules of
Practice. This order is issued in response to his application for
reinstatement to practice before the Commission as an accountant
responsible for the preparation or review of financial statements
required to be filed with the Commission.
During both 1991 and 1992, Sulcus Computer Corporation ("Sulcus")
filed with the Commission periodic reports which contained financial
statements that were materially false and misleading and not presented
in conformity with generally accepted accounting principles, and that
failed to disclose that certain increases in revenue and decreases in
expenses were non-recurring and not representative of Sulcus' ongoing
operations. The misstatements resulted from improper accounting
employed in connection with a series of acquisitions Sulcus completed
in 1991 and 1992. On May 17, 1994, Sulcus restated its financial
statements for 1991 and 1992, which resulted in a decrease in net
income to $1,692,338 from $1,937,090 for 1991, and a decrease in net
income to $3,221,786 from $5,180,292 for 1992.
Picardi was at all relevant times the chief financial officer of
Sulcus Hospitality Group ("SHG"), the largest component of Sulcus'
operations, and was responsible for all accounting performed at the
SHG level, including the purchase accounting utilized in connection
with numerous acquisitions. Picardi was also primarily responsible for
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