Israel - Pinksheets

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Proposed settlement of three-year case involves delisting Lumenis

08.3.06 | 10:20 By Shirley Yom-Tov

The U.S. Securities and Exchange Commission investigation into Lumenis (Nasdaq: LUME.PK) is apparently nearing an end, after three years. Lumenis, which develops and sells lasers for surgical and cosmetic applications, said this morning that an agreement in principle has been reached. If approved by the requisite authorities, Lumenis will be delisted from trade and will have to relist again from scratch.

At present, in any case, Lumenis has been relegated to the pink sheets.

The probe centered on recognition of certain transactions in the company's 2002 and 2003 financial statements. Lumenis had even admitted in the past that it inflated revenues in those years.

On February 21, 2005, Lumenis announced notification from the SEC, that civil charges would be pressed regarding its reporting of certain transactions in those years.

The agreement in principle remains to be officially approved at the SEC and by the court, where the SEC filed its complaint. There is no certainty, Lumenis stresses, that either will approve it.

Under the settlement, Lumenis would not admit to any wrong-doing or deny the allegations. But it would consent to the entry of a permanent civil injunction against future violations of the antifraud, reporting, books and records, and internal control provisions of the federal securities laws and related SEC rules, it said.

No fines would be imposed under the proposed settlement, it says, and it would continue to cooperate with the SEC's ongoing investigation of others.

As for its delisting, Lumenis says it hopes to relist for trade during the second quarter of 2007.

Lumenis also says it realizes the SEC means to press charges against one present and one former employee. "?the former employee has agreed to settle the charges at the same time as the company and that the current employee does not intend to settle the charges," it added.

The company also said it is working with BDO Ziv Haft to produce audited financial statements. To help in preparing its financial statements, the company says it is working with a team of accountants from Alix Partners

And if approved, the agreement would end the three-year investigation.

http://www.haaretz.com/hasen/spages/691751.html

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