The SEC announced that its case against a CEO of a public company, who allegedly misled investors, had successfully concluded, while new charges were filed in a $10Mn investment fraud. 

    Former Kmart CEO to Pay $5.5 Million.   On 11/15, a federal judge in the Eastern District of Michigan entered an Amended Final Judgment against Charles Conaway, former CEO of Kmart Corporation, ordering him to pay disgorgement of $3mn, and a civil penalty of $2.5mn.

  In 2005, the SEC charged Conaway with misleading investors about Kmart's financial condition in the months preceding the company's bankruptcy.  A jury verdict was returned on 6/1/09, and on 3/3/10, the court initially ordered Conaway to pay a over $10 million in disgorgement, prejudgment interest and fines.  The amended judgment represents a compromise.  SEC staff credits:  Cheryl Scarboro, Alan Lieberman, Reid Muoio.  [Lit. Rel. 21745, 11/17] 

    Charges in Investment Fraud Scheme.   The SEC announced that the U.S. Attorney's Office for the Northern District of Illinois criminally charged Scott Ross with 3 counts of mail fraud in connection with his role in an investment fraud scheme.  Ross is accused of misusing money he raised from investors for his own benefit - including paying himself a $319,000 salary and purchasing a $70,000-per-year sky box at the stadium of the Indianapolis Colts - and also to make Ponzi-type payments to certain investors.  Back on 2/3/09, the SEC filed a civil injunctive complaint against Ross, alleging that, after he raised at least $10 million from 300 investors, Ross misappropriated investors' money, took undisclosed commissions, and used investors' money from one fund to pay returns to investors in another fund. [Lit. Rel. 21744, 11/16]