Penthouse's airbrushed numbers

Penthouse's airbrushed numbers
Some stories are just too good to ignore.

The former owner of Penthouse magazine's publisher has agreed to settle civil accounting fraud charges with the Securities and Exchange Commission, accorSEC announcement

The settlement is with Charles Samel, a former director and executive vice-president of Penthouse, and Jason Galanis, an ex-shareholder. In addition, Samel and Galanis were each ordered to pay civil penalties of $60,000 and have been barred for a period of five years from serving as officers or directors of public companies.

The case goes back to a January 2005 lawsuit where the SEC accused Penthouse International and Samel and Galanis of accounting fraud and financial reporting violations in connection with the company's financial statement for the first quarter of 2003. The SEC alleged that Penthouse improperly accounted for a $1 million payment it received from a company owned by Galanis in connection with an agreement to manage a Web site. It said the company's regulatory filing for the quarter bore the electronic signature of founder and former CEO Bob Guccione even though he didn't review it.

Of course, the magazine was heading into trouble at the time. Guccione, who was at his peak considered to be one of the riches people in the US, resigned in 2003 when the magazine ran into financial trouble. In 2003, General Media, the parent company filed for Chapter 11 bankruptcy protection.

So a bit of airbrushing of the numbers back then would not have gone astray.


Posted by: leon    Source