Risk & Compliance

SEC Settles with Former Alcore Execs

Activities in question took place several years before the company's 2002 acquisition by General Dynamics.
Helen ShawJanuary 23, 2007

Two former executives of Alcore, once a subsidiary of aerospace equipment manufacturer Advanced Technical Products (ATP), have agreed to settle Securities and Exchange Commission charges of securities fraud and falsification of books and records.

The commission alleged that former chief executive officer Edward Kiley and former chief financial officer Richard Orzechowski “directed and actively participated in a financial fraud at Alcore” during fiscal years 1998 and 1999. In May 2000, “as a direct result of the fraud,” Alcore restated its net income downward by a total of more than $6.8 million for 1998 and the first three quarters of 1999.

The SEC charged Kiley and Orzechowski in July 2001 for their roles in misleading auditors, knowingly falsifying Alcore’s books and records, and Kiley’s sales of ATP stock during the fraud.

Under the deal, in which they neither admitted nor denied the SEC’s allegations, both men agreed to be enjoined from further violations of the securities laws and to accept an officer-and-director bar.

In addition, the judgment against Kiley orders him to pay $25,531 of stock-trading profits and $12,903.73 in prejudgment interest. However, payment in excess of $25,000 was waived, and no civil penalty was imposed, based on Kiley’s financial condition. Orzechowski will pay a civil penalty of $20,000.

ATP was acquired by General Dynamics in 2002 and incorporated into the defense giant’s Armament Systems division.

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