Risk & Compliance

Former Auto-Parts CFO Sentenced

Motorcar Parts of America's former president and chief operating officer has also pleaded guilty.
Stephen TaubJune 3, 2004

Peter Bromberg, former chief financial officer of Motorcar Parts & Accessories Inc., was sentenced to five months in prison and five months of home detention for his role in a financial fraud, according to the Securities and Exchange Commission and the U.S. Attorney’s Office for the Central District of California.

From 1994 until his resignation in May 1999, Bromberg was the CFO of the Torrance, California-based company, now known as Motorcar Parts of America Inc., which remanufactures automotive alternators and starters. According to the SEC web site, Motorcar’s stock previously traded on Nasdaq and now trades over the counter.

In September 2002, the U.S. Attorney’s Office charged that Bromberg knowingly made false and misleading statements about Motorcar’s financial condition and performance in its 1997 and 1998 annual reports. Bromberg pled guilty to these charges.

That same month, the SEC settled civil fraud charges against Motorcar and Bromberg. The commission had alleged that the company overstated pre-tax earnings for fiscal year 1997 by nearly $3.4 million (59.8 percent) and for fiscal year 1998 by $3.6 million (49.6 percent).

Both Bromberg and Motorcar settle those charges without admitting or denying the commission’s allegations. Bromberg agreed to pay $76,275 in disgorgement plus prejudgment interest. The SEC, however, waived all but $50,000 of that amount and did not order a civil penalty, based on his sworn representations in his statement of financial condition and other documents submitted to the commission.

In December 2003, the SEC and the U.S. Attorney’s Office brought actions against Richard Marks, Motorcar’s former president and chief operating officer. He agreed to plead guilty to the criminal charges and will be sentenced on August 9.

In settling the SEC’s civil fraud action, Marks paid over $1.2 million and was permanently barred from serving as an officer or director of a public company.

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