SEC Settles Aiding and Abetting Charges Against Joseph Apuzzo
On September 8, 2015, Judge Alvin Thompson of the U.S. District Court for the District of Connecticut entered a judgment against Joseph Apuzzo, former Chief Financial Officer of Terex Corporation. Apuzzo consented, without admitting or denying the allegations in the SEC’s complaint, to be permanently enjoined from violation of Sections 10(b) and 13(b)(5) of the Securities and Exchange Act of 1934 (“Exchange Act”) and Rules 10b-5 and 13b2-1 thereunder, and from aiding and abetting violation of Sections 13(a) and 13(b)(2)(A) of the Exchange Act and Rule 13a-1 thereunder, and to pay a penalty of $100,000.
Upon motion by the SEC, Judge Thompson will determine whether to impose an officer and director bar against Apuzzo. Apuzzo, who was a Certified Public Accountant at the time of the alleged fraudulent conduct, has further agreed to the entry of an SEC order suspending him from appearing as an accountant before the SEC, with a right to apply for reinstatement after five years. The SEC issued such an Order on September 16, 2015.
The SEC’s complaint, filed on December 27, 2007, charged Apuzzo with aiding and abetting a fraudulent accounting scheme involving two sale-leaseback transactions, carried out between 2000 and 2002 by United Rentals, Inc. (“URI”) and Michael Nolan (“Nolan”), a former CFO of URI. The transactions were made to improve URI’s 2000 and 2001 financial results by allowing URI to recognize revenue prematurely and to inflate the profit earned from the sales. The complaint also claims that Apuzzo substantially assisted URI and Nolan in implementing the fraudulent scheme by, among other things, signing agreements with URI that he knew or was reckless in not knowing were designed to hide URI’s continuing risks and financial obligations relating to the sale-leaseback transactions, and directing or approving the issuance of inflated invoices that he knew or was reckless in not knowing URI, through Nolan and others, would use to inflate URI’s gain on the transactions. As a result of the fraudulent transactions, URI materially overstated its financial results in its Forms 10-K for fiscal years 2000 and 2001, as well as in other filings and public releases.
For further information about this securities law blog post, please contact Brenda Hamilton, Securities Attorney at 101 Plaza Real S, Suite 202 N, Boca Raton, Florida, (561) 416-8956, by email at [email protected] or visit www.securitieslawyer101.com. This securities law blog post is provided as a general informational service to clients and friends of Hamilton & Associates Law Group and should not be construed as, and does not constitute, legal and compliance advice on any specific matter, nor does this message create an attorney-client relationship. Please note that the prior results discussed herein do not guarantee similar outcomes.
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