SEC Sues Executives for $2.6 Billion (January 10, 2006)
January 10, 2006
The Securities and Exchange Commission has filed suit against four former executives of National Century Financial Enterprises Inc., including former CEO Lance Poulsen, former COO Donald S. Ayers, former CFO Randolph H. Speer and former director of Accounts Recivables Rebecca S. Parrett. The suit alleges that the executives made advances of at least $1.2 billion of subsidiaries’ funds without acquiring eligible receivables in return which allegedly violated numerous agreements with its subsidiaries to maintain certain balances in reserve accounts and to secure the notes.
Additionally, the SEC alleges that the executives transferred funds among subsidiaries’ bank accounts in an effort to conceal cash shortfalls of up to $350 million and recorded about $1 billion in fraudulent medical accounts receivable in subsidiaries’ financial records. They misrepresented the status of cash accounts and the collateral base by falsifying monthly reports, accounting records and offering documents.