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SEC charges former Panasonic executives

Paul A. Margis
America   Paul A. Margis

The Securities and Exchange Commission charged two former senior executives of the U.S. subsidiary of Panasonic Corp. with knowingly violating the books and records and internal accounting controls provisions of the federal securities laws and causing similar violations by the parent company.


According to the SEC’s order against Paul A. Margis, then-CEO and president of Panasonic Avionics Corp., Margis used a third party to pay over $1.76 million to several consultants, including a government official who was offered a lucrative consulting position to assist Panasonic Avionics in obtaining and retaining business from a state-owned airline.

Panasonic Avionics falsely recorded these payments, and Margis circumvented company procedures for engaging the consultants, who provided few, if any services. Margis also made materially false or misleading statements to Panasonic Avionics’ auditor regarding the adequacy of Panasonic Avionics’ internal accounting controls and accuracy of the company’s books and records.

According to the SEC’s order against Takeshi “Tyrone” Uonaga, then-CFO of Panasonic Avionics, Uonaga caused Panasonic Corp. to improperly record $82 million in revenue based on a backdated contract and made false representations to Panasonic Avionics’ auditor regarding financial statements, internal accounting controls, and books and records.

The SEC’s orders require Margis and Uonaga to pay penalties of $75,000 and $50,000, respectively.

The order against Uonaga also suspends him from appearing or practicing before the Commission as an accountant, which includes not participating in the financial reporting or audits of public companies.

The order permits Uonaga to apply for reinstatement after five years. Margis and Uonaga consented to the entry of their orders without admitting or denying the findings.

In April of this year, the Commission instituted a related settled cease-and-desist proceeding against Panasonic Corp. finding that it violated the anti-bribery, anti-fraud, books and records, internal accounting controls, and reporting provisions of the federal securities laws.

 

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