The Securities and Exchange Commission has settled charges that the former chief financial officer and chief executive officer of Sight Resource Corp. violated of the reporting, record keeping, and internal-controls provisions of the federal securities laws.
In addition to those charges, against former CFO Duane Kimble and former CEO Carene Kunkler, the SEC also alleged that Kimble committed securities fraud.
The Cincinnati-based distributor and retailer of eyewear filed for bankruptcy last year, according to a report in the Cincinnati Business Courier. The company then operated about 120 eye-care stores across the country, employing about 800 people, the newspaper added. In April, the company completed the sale of its assets, reported Dow Jones, and has no remaining operations.
According to the SEC, during the company’s 2002 fiscal year, Kimble made journal entries with inadequate documentation, and directed other accounting personnel to do likewise, improperly improving the appearance of the company’s financial condition. Those entries and other accounting errors also permitted Sight Resource to satisfy loan covenants with its bank on at least two occasions.
The commission’s order also found that company filings reviewed by Kimble and Kunkler — though apparently signed only by Kimble — gave false and misleading explanations of why Sight Resource was unable to file its 2002 annual report on time. In addition, according to the SEC, Kimble and Kunkler failed to establish adequate internal controls at Sight Resource, and they filed false and misleading Sarbanes-Oxley certifications of the company’s disclosure controls.
In the settlement, filed in U.S. District Court for the Southern District of Ohio, Kimble and Kunkler neither admitted nor denied wrongdoing. Both individuals agreed to cease and desist from committing or causing violations of the federal securities laws; they also agreed to monetary penalties to be determined by the court. In addition, Kimble has agreed not to practice as an accountant before the commission for three years, after which he may apply for reinstatement.