I wonder why these clowns didn't issue a PR to announce their latest round of "Earnings"?
The following exerpt from the latest filing is very telling.....
The requested relief was approved by the Court on August 7, 2006.
The Complaint alleged that in September 2004, the Company violated the
antifraud provisions of the federal securities laws by issuing materially
misleading press releases and filing materially misleading reports with the
SEC concerning a purported $23 million sales contract with a defense
contractor known as Universal General Corporation ("UGC"), which, in fact,
had no revenues, no assets, and no means to satisfy any portion of its $23
million contractual obligation to the Company. According to the Complaint,
the Company performed virtually no due diligence to determine whether UGC
was legitimate and could meet its contractual obligations. The Complaint
states that Mr. Bernardich was responsible for the Company's due diligence
failures and for drafting the Company's materially misleading press
releases and SEC filings. The Complaint also alleges that during the first
three quarters of fiscal year 2000, the Company fraudulently recognized
nearly ninety percent of its reported revenues based on fictitious camera
sales by initiating consignment arrangements with numerous dealers and
recording the consignment order amounts as revenue before any cameras were
manufactured, shipped to the dealers, or sold to customers. The Complaint
alleges that during this same period, the Company also issued numerous
deceptive press releases that materially misrepresented the company's
operations and offered glowing, but unsubstantiated, revenue and earnings
forecasts. The Complaint also alleges that in April 2001, following a
management change, the Company filed with the SEC an annual report for 2000
containing a misleading restatement of revenues and other materially
misleading disclosures and accounting errors. According to the Complaint,
the principal architect of the Company's fraudulent activities during 2000
was its now-deceased former chief executive officer, Richard L. McBride.
According to the Complaint, among other things, the Company failed to
disclose in violation of applicable SEC regulations that Mr. McBride had
been convicted of fraud in 1998 and was serving a six-year probation term.
The Complaint also alleges that Mr. Cox was responsible for certain of the
Company's fraud and reporting violations and Mr. Bernardich, who had
replaced Mr. McBride as chief executive officer in February 2001, aided and
abetted the Company's reporting violations with respect to the Company's
2000 annual report.
In addition, the Company's current chief financial officer, Douglas Bauer,
has consented to the issuance of a cease-and-desist order for his role in
causing the Company's reporting violation in connection with its April 2002
restatement of a deferred tax asset. Mr. Bauer consented to the issuance of
the order without admitting or denying the findings in the Order.
