UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION
Securities Act of 1933
Release No. 8284 / September 11, 2003
Securities Exchange Act of 1934
Release No. 48474 / September 11, 2003
Accounting and Auditing Enforcement
Release No. 1854 / September 11, 2003
Administrative Proceeding
File No. 3-11251
_________________________________________________________________
In the Matter of
BRIGHTPOINT, INC.,
Respondent
_________________________________________________________________
ORDER INSTITUTING CEASE-AND-DESIST PROCEEDINGS, MAKING FINDINGS, AND
IMPOSING A CEASE-AND-DESIST ORDER PURSUANT TO SECTION 8A OF THE
SECURITIES ACT OF 1933 AND SECTION 21C OF THE SECURITIES EXCHANGE ACT
OF 1934 AS TO EXCHANGE ACT OF 1934 AS TO BRIGHTPOINT, INC.
I.
The Securities and Exchange Commission ("Commission") deems it
appropriate that public administrative proceedings be, and hereby are,
instituted against Brightpoint, Inc. ("Brightpoint" or "the Company")
pursuant to Section 8A of the Securities Act of 1933 ("Securities
Act") and Section 21C of the Securities Exchange Act of 1934 (the
"Exchange Act").
II.
In anticipation of the institution of these administrative
proceedings, Brightpoint 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 to which the Commission is a party,
SNIPPETS:
ORDER INSTITUTING CEASE-AND-DESIST PROCEEDINGS, MAKING FINDINGS, AND IMPOSING A
The Securities and Exchange Commission deems it appropriate that public administrative
In anticipation of the institution of these administrative proceedings, Brightpoint has
This case involves Brightpoint's improper use of a purported insurance policy to reduce a $29
As a result of this deception, Brightpoint's 1998 financial statements, as reported in the
On October 2, 1998, Brightpoint publicly announced that in the fourth quarter ending December
In December 1998, Delaney and Harcharik turned to the Loss Mitigation Unit of American
The AIG Policy, finalized in January 1999, enabled Brightpoint to record in 1998 an insurance
In drafting the AIG Policy, Delaney and Harcharik took pains to ensure that the "policy"
Moreover, once the AIG Policy was finalized, Delaney and Harcharik worked with AIG to devise
Auditors decided at the very least that the policy provided retroactive coverage and,
On the day before Brightpoint announced the first restatement, Brightpoint and AIG canceled
Delaney served as Brightpoint's corporate controller and chief accounting officer from June
At all relevant times, Harcharik was the president of World Wide Risk Management, a risk
AIG is a holding company that, through its subsidiaries, is engaged in a broad range of
Brightpoint's Board of Directors approved the closure on October 1, 1998, and the Company
After October 2, 1998, Harcharik continued to investigate the UK losses, and he gathered
In the transaction eventually consummated, AIG bore no insurance risk for retroactive losses
Brightpoint publicly reported the material misrepresentations about its 1998 operating
An issuer may violate the antifraud provisions if it makes misstatements or omissions of
In light of the fact that these accounting improprieties were committed by Brightpoint's then
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