SEC Investigates Medifast, $200,000 Penalty & Cease-and-Desist Order

Posted by Juliette Gibson on Tue, Oct 01, 2013 @ 09:41 AM

This is a great article looking at the outcome of a recent SEC investigation into Medifast's financial reporting from 2006 through 2009.  Medifast disclosed, without admitting or denying the SEC's findings, that under the terms of the settlement it has consented to a Cease-and-Desist Order and agreed to pay a $200,000 civil penalty.

According to the Cease-and-Desist Order, Medifast materially overstated its income and understated its expenses in reports from 2006 through 2009.  The investigation revealed that Medifast's own internal income tax calculations did not match up to the numbers reported.  

In addition, two separate Cease-and-Desist Orders were entered against Medifast's former CFO, Brendan Conners, and audit engagement partner, Marc Nochisom; again without admitting or denying the findings.  Both orders stated "improper conduct" and as a part of his settlement, Brendan Conners agreed to pay a $40,000 civil penalty. 

To read the entire article, click here

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Tags: Internal Controls, audit, 10k, White Collar Fraud, disclosure, SEC, SEC fines, audit deficiency, Internal Control Deficiency