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Msg  2908 of 2916  at  1/24/2014 2:07:59 PM  by

JimCooper


SEC Order Issued This Morning

As some of may recall, Dal Bagley and ClearOne filed a law suit in February 2004 against National Union after National Union revoked the Directors and Officers insurance policies claiming that National Unions year-long investigation showed that Dal Bagley and the other directors were involved in the 2001-2001 accounting fraud the same claim that former CEO Frances M. Flood and Assistant US Attorney Stewart Walz made to Judge Benson at Floods sentencing hearing. A few days later, COO Greg Rand unexpectedly resigned for personal reasons, followed a few weeks later in April 2004 by the unexpected resignation of CFO George E. Claffey with no reason given, and then the resignation of CEO Mike Keough in June 2004 after the delinquent financial reports (more than three years) were not released as Keough had insisted in his 6 May 2004 CEO conference call. At that time, I started to claim on the message boards (to the ridicule of many) that Dal Bagley and KPMG were conspiring to withhold from National Unions lawyers the delinquent financials, which if done honestly by an INDEPENDENT auditor, would confirm the accounting fraud (which Dal Bagley, Flood and former CFO Susie Strohm had fraudulently concealed from National Union in their insurance applications in the Fall of 2002, just weeks before the SEC intervened). On 9 August 2005, Judge Nuffer issued his COURT Order compelling Dal Bagley and ClearOne to release the relevant delinquent financials. Judge Nuffers order revealed that KPMG and ClearOne had repeatedly lied to and had mislead Judge Nuffer and National Unions lawyers with false claims that KPMG was having difficulty getting the reports ready. Late on 18 August 2005, Dal Bagley and KPMG released all those reports just beating Judge Nuffers 10-day deadline, which if missed, would have required Dal Bagley to give up all of his personal email for several years. Yowee!!!!! KPMG was clearly NOT an INDEPNDENT auditor and was illegally cooperating with Dal Bagley to conceal the accounting fraud from National Unions lawyers, Judge Nuffer, and Judge Campbell, who shortly thereafter, based upon those accounting reports, issued a Summary Judgment against Dal Bagley and ClearOne. Subsequent SEC filings revealed that, during that time, ClearOne was paying KPMG huge, extraordinary accounting fees.

Shortly after the 18 August 2005 release, I asked Zee to issue a press release announcing milestones, when the remaining delinquent financial reports would be released. She refused; so I filled a lawsuit to allow me and an accountant to inspect ClearOnes accounting records. I sent CFO Don Frederick a list of questions I wanted to ask him about the delinquent accounting records, KPMG, and Dal Bagley. I was told that, the night before the hearing with Judge Quinn, Don Frederick suddenly walked out of ClearOnes offices and left no forwarding address. ClearOne and ClearOnes lawyers did not know how to reach their missing CFO. I guess ClearOnes CFO didnt like the questions I wanted to ask him. I didnt mean to drive off ClearOnes CFO. I just wanted some answers about the delinquent financial reports and the role Dal Bagley and KPMG were playing. The next morning, ClearOnes lawyers appeared before Judge Quinn and produced a new press release that announced the very milestones, which I had originally requested from Zee and which Zee had previously refused to issue. Judge Quinn held the case open until all those milestones were complete and all the financial reporting was brought current.

That experience and several others I had heard about in the news media indicated to me that KPMG was crooked, was NOT an INDEPENDENT auditor, and was in bed with the clients, whom KPMG was auditing.

Well, this morning the SEC issued a 9-page Report of Investigation, which can be accessed at the following link:

http://www.sec.gov/litigation/investreport/34-71390.pdf

That report established that KPMG was NOT and INDEPENDENT and was colluding with its clients, whom KPMG was supposed to be auditing to protect the investing public. Based on that Report of Investigation, the SEC issued a 10-page Order, which can be accessed at the following link:

http://www.sec.gov/litigation/admin/2014/34-71389.pdf

The SEC also issued this morning a press released about KPMG. That press release can be accessed at the following link:

http://www.sec.gov/News/PressRelease/Detail/PressRelease/1370540667080



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