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The sound is up now for this week's show, which featured a report on a new civil action law suit filed by investors against AP's Redevelopment Attorney, James G. Aaron, and a public company, Medi-Hut, which the Securities and Exchange Commission determined issued false and misleading financial information.
The SEC claimed, among other things, that the fraud caused revenues for the second quarter of 2002 to be overstated by approx. $2,026,000. The Asbury Park Press reported losses to the investing public of $96 million.
The SEC investigation, which only sought criminal charges against the top three officers of the company, therefore, not accusing Mr. Aaron and others, sent the company's top officers, CEO Joseph A. Sanpietro, CFO Laurence M. Simon, and VP of Sales, Lawrence P. Marasco, to prison in November.
Combined civil suits, folded into an earlier class action suit, which did name James G. Aaron and other defendants, were settled for fines and stock. One case, filed by DePalma Greenberg & Rivas, LLC, charged that, "The facts alleged herein compel a strong inference that the Individual Defendants made materially false and misleading statements to the investing public with scienter (knowingly). The Individual Defendants knew that the public statements issued or disseminated in the name of the Company were materially false and misleading; knew or recklessly disregarded that such statements would be issued or disseminated to the investing public...caused Medi-Hut to engage in irregular accounting practices, and in turn, caused Medi-Hut to report artificially inflated financial results."
Specifically, the DePalma case states, "...Aaron was a member of the Board of Directors of Medi-Hut at all times relevant hereto. Aaron signed the Company's Form 10-K for fiscal year 2001, filed with the SEC during the Class Period."
The plaintiffs in the latest complaint opted out of the earlier suit. The current suit, filed on Dec. 27th, speaks directly to Mr. Aaron's role. Mr. Aaron was the company's general counsel and sat on the three-person audit committee, with his fellow shareholder from Monmouth Community Bank James S. Vacarro, and signed off on financial filings. The suit, filed by attorney Michael Kasanoff, of Red Bank, asks: (1) "Where was the auditing committee?; (2) How could the audit committee not know what was going on?; and (3) If the audit committee knew what was going on, why did the audit committee not do anything about it?"
Kasanoff also quotes the Assist. US Atty, Robert Kirsch, saying of the SEC case
against Medi-Hut, "It was, in the end, a financial house of cards."
Mr. Aaron was on vacation prior to this show. An invitation was left at his office for him to respond on the air or in writing when he returns.
Also on this show, a review of past shows, guest Bob Patterson on returning to Asbury after 15 years, and how to help to provide Tsunami Relief.
Thanks for listening -
Maureen
Speak up - It's America!!
Maureen Nevin Restore Radio 88.1FM - 4 Years on the Radio!! Asbury Park's Own Live Talk Show 601 Bangs Avenue Listen 8 - 10 PM Thursdays on 88.1FM or Listen Live or Later on the Web http://www.restoreradio.com/ Call the show 732-775-0821 Call me 732-774-0779 fax 502-0463 Yahoo! Groups Links
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