CSK Auto Corporation (CAO)

[Renee]

CSK Auto:

http://www.sec.gov/litigation/litreleases/2012/lr22338.htm

U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 22338 / April 18, 2012
Accounting and Auditing Enforcement Release No. 3382 / April 18, 2012

Securities and Exchange Commission v. Don W. Watson, Edward W. O’Brien, and Gary M. Opper, Case No. 2:09-cv-00442-LOA (D. Ariz.)

SEC ANNOUNCES SETTLEMENT OF ACCOUNTING FRAUD CHARGES AGAINST FORMER CSK AUTO CORPORATION MANAGEMENT

On April 18, 2012, the Securities and Exchange Commission announced that final judgments have been entered in the United States District Court in Phoenix, Arizona against three former officers and managers of Phoenix-based CSK Auto Corporation (CSK). The Commission’s complaint, filed in 2009, alleged that from 2002 to 2004, Don W. Watson, CSK’s former chief financial officer, senior vice president, and treasurer, Edward W. O’Brien, CSK’s former controller, and Gary M. Opper, CSK’s former director of credit and receivables, engaged in a scheme to materially overstate CSK’s income by aggressively recognizing vendor allowances and failing to write off vendor allowance receivables when management knew the receivables were uncollectible. Because of the scheme, CSK filed false financial statements overstating pre-tax income for fiscal year 2002 by 48.6%, or $11.2 million, fiscal year 2003 by at least $37.4 million, thereby reporting pre-tax income instead of a pre-tax loss, and fiscal year 2004 by at least 67.2%, or $21.4 million. At the time of the fraud, CSK was one of the nation’s largest auto parts retailers with over 1000 stores located throughout the western United States. In July 2008, CSK became a wholly owned subsidiary of O’Reilly Automotive, Inc.

Pursuant to his final judgment, Watson consented to a permanent injunction, a permanent officer and director bar, and agreed to reimburse O’Reilly Automotive, Inc. (“O’Reilly”), which acquired CSK, $646,404.17 in bonuses and stock profits pursuant to Section 304 of the Sarbanes-Oxley Act of 2002, (“SOX”), 15 U.S.C. § 7243. In a related criminal action brought by the U.S. Department of Justice, on September 21, 2011, Watson was sentenced to two years’ imprisonment, to be followed by three years’ supervised release, and ordered to pay restitution in the amount of $1,016.13, based on his guilty plea to a to a one-count superseding felony information, charging him with conspiracy to commit securities fraud and mail fraud, in violation of 18 U.S.C. § 371.

Pursuant to his final judgment, O’Brien consented, without admitting or denying the allegations in the Commission’s complaint, to a permanent injunction, a permanent officer and director bar, and agreed to pay $33,386 in disgorgement and prejudgment interest. Pursuant to his final judgment, Opper consented, without admitting or denying the allegations in the Commission’s complaint, to full injunctive relief and agreed to pay $10,906 in disgorgement and prejudgment interest. In the related DOJ criminal action, both O’Brien and Opper pled guilty to obstruction of justice in connection with the Commission’s investigation by providing false information to CSK’s counsel, knowing that the results of CSK’s internal investigation would be disclosed to the Commission staff, in violation of 18 U.S.C. § 1505. On November 10, 2011, both O’Brien and Opper were sentenced to three years’ probation, and ordered to pay a $10,000 and $2,500 fine, respectively.

[ChartGirl]

CSK Auto Selects Datavantage Xstore Java POS

CLEVELAND, Jan. 17 /PRNewswire-FirstCall/ -- Datavantage, a subsidiary of MICROS Systems, Inc. (Nasdaq: MCRS - News), and CSK Auto Corp. (NYSE: CAO - News), parent company of CSK Auto Inc., one of the largest automotive parts and accessories retailers in the United States, announced today an agreement to deploy Datavantage's Xstore(TM) Java-based Point-of-Sale system.

link to full article:
http://biz.yahoo.com/prnews/060117/dctu048.html?.v=39