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1
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SEC ADMINISTRATIVE PROCEEDING
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EXTRACTED KEY WORDS
LAW JUDGE COMMISSION ACCOUNTANTS INTERLOCUTORY REVIEW PRACTICE EXCHANGE ACT ARMSTRONG RULING ALLEGES CERTIFICATION MOTION LICENSE OFFICER PURSUANT SECURITIES PROCEEDING DIRECTORS GRACE IMMEDIATE COMMISSION REVIEW ALLEGATIONS RELATING DOCKET DETERMINATION OIP EARNINGS CERTIFIED PUBLIC ACCOUNTANT ACCORDANCE CAUSED VIOLATIONS REQUEST |
SECURITIES AND EXCHANGE COMMISSION
SECURITIES EXCHANGE ACT OF 1934
Rel. No. 42096 / November 4, 1999
Accounting Auditing Enforcement Rel. No.1202 / November 4, 1999
Admin. Pro. File No. 3-9793
In the Matter of
JEAN-PAUL BOLDUC, ORDER DENYING
BRIAN J. SMITH, C.P.A., APPLICATION FOR
RICHARD N. SUKENIK, C.P.A., INTERLOCUTORY APPEAL,
PHILIP J. RYAN III, TAKING THE MATTER UP
CONSTANTINE L. HAMPERS, ON THE COMMISSION'S
A. MILES NOGELO, and ON THE COMMISSION'S
ROBERT W. ARMSTRONG III, C.P.A SCHEDULING BRIEFS
The Division of Enforcement and the Office of the Chief Accountant
(collectively, the "Division") seek interlocutory review of a July 2,
1999, order by an administrative law judge ("July 2 Order"). We deny
the Division's application but have determined to review the law
judge's ruling on our own motion.
The Order Instituting Proceedings ("OIP") alleges that, from 1991
through 1996, various officers, directors and employees of W.R. Grace
& Co. ("WR Grace") engaged in fraudulent conduct by filing false and
misleading reports with the Commission and making false and misleading
statements in press releases and at analyst teleconferences. As
alleged in the OIP, this fraudulent conduct included manipulating and
falsely reporting the earnings of National Medical Care Inc. ("NMC"),
a subsidiary of WR Grace. This false information was allegedly
incorporated into WR Grace's financial statements and disseminated to
the investing public.
The OIP further alleges that respondent Armstrong, a vice president
and controller of NMC during the relevant period, and a certified
public accountant, knew that NMC's earnings were not being recorded in
conformity with Generally Accepted Accounting Principles. Armstrong
also was alleged to have participated in manipulating NMC's earnings
in accordance with directives from WR Grace. The OIP alleges that
Armstrong committed or caused violations of Sections 10(b) and
13(b)(5) of the Securities Exchange Act of 1934^ and Exchange Act
Rules 10b-5 and 13b2-1; caused violations of Sections 13(a) and
13(b)(2) of the Exchange Act and Exchange Act Rules 12b-20, 13a-1 and
13a-13; and willfully violated the federal securities laws or rules
and regulations within the meaning of Rule 102(e)(1)(iii) of the
Commission's Rules of Practice, or engaged in improper professional
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