SEC v TRUSERV CORPORATION - Legal Case Documents


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SEC v TRUSERV CORPORATION

Keywords & Phrases

CaseNo: 34-47439, Defendant: Truserv Corporation, Plaintiff: SEC, UniqueCaseRef: SEC>34-47439, Truserv, Accounting, Merchandise, Report, Adjustments, Exchange Act, Inventory, Internal Controls, Internal Audit, Commission, Receiver, Stock Adjustments, Accounting Staff, Management, Accruals, Amount, Securities, Cost, Open Receiver File, Warehouses, Pursuant, Instituting, Goods Sold, Deficiencies, Loss, Books, Distribution, Returned Merchandise, Stock Adjustment Codes , ContentID: 120255849

Case Documents

2003-03-04

SEC ADMINISTRATIVE PROCEEDING
[ see first page and extracted highlights below ] ItemID: 133139

8 pages
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Total Documents: 1 document , 8 pages

Price: $ 19.95

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1 . SEC ADMINISTRATIVE PROCEEDING

EXTRACTED KEY WORDS

ACCOUNTING
MERCHANDISE
REPORT
ADJUSTMENTS
EXCHANGE ACT
INVENTORY
INTERNAL CONTROLS
INTERNAL AUDIT
COMMISSION
RECEIVER
STOCK ADJUSTMENTS
ACCOUNTING STAFF
MANAGEMENT
ACCRUALS
AMOUNT
SECURITIES
COST
OPEN RECEIVER FILE
WAREHOUSES
PURSUANT
INSTITUTING
MEMBERS
GOODS SOLD
DEFICIENCIES
LOSS
BOOKS
DISTRIBUTION
RETURNED MERCHANDISE
STOCK ADJUSTMENT CODES

UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION

SECURITIES EXCHANGE ACT OF 1934
RELEASE NO. 47439 / March 4, 2003

   ACCOUNTING AND AUDITING ENFORCEMENT
   RELEASE NO. 1727 / March 4, 2003

   ADMINISTRATIVE PROCEEDING
   FILE NO. 3-11050
     _________________________________________________________________



   Truserv Corporation,

   Respondent.


     _________________________________________________________________

   ORDER INSTITUTING CEASE-AND-DESIST PROCEEDINGS, MAKING FINDINGS AND
   IMPOSING CEASE-AND-DESIST ORDER PURSUANT TO SECTION 21C OF THE
   SECURITIES EXCHANGE ACT OF 1934

                                     I.

   The Securities and Exchange Commission ("Commission") deems it
   appropriate that public cease-and-desist proceedings be, and hereby
   are, instituted pursuant to Section 21C of the Securities Exchange Act
   of 1934 (the "Exchange Act") against TruServ Corporation ("TruServ" or
   "Respondent").

                                    II.

   In anticipation of the institution of these proceedings, TruServ has
   submitted an Offer of Settlement (the "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, and, without admitting or
   denying the findings contained herein, except as to the Commission's
   jurisdiction over it and over the subject matter of these proceedings,
   TruServ consents to entry of this Order Instituting Cease-and-Desist
   Proceedings, Making Findings and Imposing Cease-and-Desist Order
   Pursuant to Section 21C of the Securities Exchange Act of 1934
   ("Order") as set forth below.

SNIPPETS:

SECURITIES AND EXCHANGE COMMISSION

MAKING FINDINGS AND IMPOSING CEASE-AND-DESIST ORDER PURSUANT TO SECTION 21C OF THE SECURITIES

The Securities and Exchange Commission deems it appropriate that public cease-and-desist

Solely for the purpose of these proceedings and any other proceedings brought by or on behalf Exchange Act of 1934

Members of the cooperative principally operate hardware stores, principally under the True

From approximately July 1997 through the end of 1999, TruServ's accounting systems and

On March 31, 2000, TruServ reported a loss of more than $131 million for fiscal year 1999,

As a result, from 1997 through the end of 1999, TruServ filed with the Commission annual and

TruServ's predecessor company's internal audit department provided senior management with a

The year-end adjustments resulted primarily from deficiencies and weaknesses in the

7.As TruServ closed its accounting records for 1999, TruServ's accounting staff reviewed the

The Open Receiver File reflects merchandise that TruServ had ordered and received but for

When TruServ received a bill from a vendor for merchandise, the amount owed for the

However, the Open Receiver File was not accurate, because TruServ's distribution center and

If merchandise returned by the member could not be resold due to damage or some other reason,

13.In 1999, TruServ wrote off approximately $16.6 million concerning stock adjustments

The claims for returned merchandise and allowances and the other stock adjustments involved


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