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SEC LITIGATION RELEASE
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EXTRACTED KEY WORDS
FIRST MERCHANTS SECURITIES COMMISSION VAN EYL JUDGE NORDBERG COMPLAINT KAHN VIOLATIONS EHMANN THEREUNDER MOTION NORTHERN DISTRICT ILLINOIS SUMMARY JUDGMENT OFFICERS FIRST MERCHANTS ACCEPTANCE MERCHANTS ACCEPTANCE CORPORATION PROVISIONS FEDERAL SECURITIES LAWS ADJUDICATION DEFENDANTS THOMAS ALLEGING VIOLATIONS ALLEGATIONS COMPLAINT AROSE SUMMARY JUDGMENT SEEKING ENTRY PERMANENT INJUNCTION EQUITABLE RELIEF |
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 17547 / June 7, 2002
, Civil Action No. 99 C-6343 (Northern District of Illinois)
The Securities and Exchange Commission announced today that on May 30,
2002, Judge John A. Nordberg granted summary judgment against two
former officers of First Merchants Acceptance Corporation on six
counts of the Commission's complaint against them. Judge Nordberg
found, among other things, that First Merchants' Chief Executive
Officer, Mitchell C. Kahn, and one of the company's Vice Presidents,
Paul Van Eyl, violated the antifraud provisions of the federal
securities laws by misrepresenting First Merchants' loan account data
in First Merchants' financial statements. In addition, Judge Nordberg
found that Kahn's and Van Eyl's conduct violated several reporting
provisions of the federal securities laws.
On September 27, 1999, the Commission filed a complaint in the
Northern District of Illinois against Kahn, Van Eyl and another former
First Merchants' employee, Thomas R. Ehmann, alleging violations of
Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act)
and Rule 10b-5 thereunder; Section 13(a) of the Exchange Act and Rules
12b-20, 13a-1, and 13a-11 thereunder; Section 13(b)(2) of the Exchange
Act and Rules 13b2-1 and 13b2-2 thereunder; and Section 13(b)(5) of
the Exchange Act. The allegations of the complaint arose in part from
events that occurred at First Merchants Acceptance Corporation as
early as May 1996. The Commission subsequently filed a motion for
summary judgment seeking adjudication of its claims against defendants
Kahn and Van Eyl. Before the Commission filed its motion defendant
Ehmann consented to entry of an order of permanent injunction and
other equitable relief against him. As a result, the Commission's
motion did not seek adjudication of any claims against Ehmann.
_________________________________________________________________
Modified 06/07/2002
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