A federal judge has barred the former CFO of a company that sold a gadget for fixing skin wrinkles and blemishes from serving as an officer or director of a public company for five years.
U.S. District Judge Ronald R. Leighton entered a permanent injunction against Karlheinz Redekopp, the former CFO of International Commercial Television Inc., the SEC said Thursday. Leighton entered the judgment on July 26 in a Seattle federal court, which also enjoined Redekopp from violating the securities laws (see Derma Wand Marketer Accused of Phony Accounting).
The SEC filed a complaint against Redekopp last August, alleging that he turned millions of dollars of quarterly losses into profits by falsely accounting for ICTV’s sales of the Derma Wand. ICTV heavily marketed the Derma Wand on the Home Shopping Network, claiming that it would reduce wrinkles and improve skin appearance. However, redekopp improperly recognized revenue before HSN actually sold or delivered the product to its viewers.
The SEC complaint also alleged that Redekopp recorded “sales” of the Derma Wand that had not been shipped to customers or for which the customer was not obligated to pay. The fraudulent accounting resulted in ICTV adjusting net sales by more than $3.7 million over a five-quarter period in 2007 and 2008, negating all of the company’s originally reported net income for those periods while it restated the net losses.
Without admitting or denying any of the findings, Redekopp consented to the entry of an order, in separate SEC administrative proceedings suspending him from appearing or practicing as an accountant before the SEC, with the right to apply for reinstatement after three years.
Register or login for access to this item and much more
All Accounting Today content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access