Rita J. McConville and Kevin M. Harris

Securities Exchange Act of 1934
Release No. 48770 / November 12, 2003

Accounting and Auditing Enforcement
Release No. 1910 / November 12, 2003

Administrative Proceeding
Release No. 3-11330

In the Matter of Rita J. McConville and Kevin M. Harris

The Commission today instituted cease-and-desist proceedings against Rita J. McConville, the former chief financial officer ("CFO") of Akorn, Inc., and cease-and-desist proceedings and administrative proceedings pursuant to Rule 102(e) of the Commission's Rules of Practice against Kevin M. Harris, another former Akorn CFO (collectively, "Respondents"). McConville is a resident of Hawthorn Woods, Illinois. Harris is a resident of Rolling Meadows, Illinois.

The Division of Enforcement alleges that McConville and Harris made false statements concerning Akorn's financial condition and caused Akorn to carry on its books at least $7 million in accounts receivable which were, at best, significantly impaired or, at worst, completely uncollectable. Had Akorn appropriately recorded a reserve for these receivables, it would have posted a $2 million loss for its fiscal year ended December 31, 2000, rather than the $2 million profit it claimed in its 2000 Form 10-K. The Division alleges that McConville engaged in accounting fraud by drafting or reviewing statements regarding accounts receivable in Akorn's Form 10-K for the fiscal year ended December 31, 2000 that McConville had no reasonable basis to believe were accurate or in accordance with generally accepted accounting principles. Moreover, the Division alleges that McConville knowingly failed to implement a system of internal controls, caused Akorn's books and records to be false, lied to auditors, and caused Akorn's reporting violations with regards to the company's 2000 Form 10-K. The Division also alleges that Harris lied to auditors and caused and willfully aided and abetted Akorn's reporting violations in regard to the status of Akorn's accounts receivable as represented in both the 2000 Form 10-K and first quarter 2001 Form 10-Q.

The Commission instituted these proceedings against Respondents to determine whether: (a) the allegations against Respondents are true and to afford Respondents an opportunity to establish any defense to such allegations; (b) pursuant to Section 21C of the Securities Exchange Act of 1934 ("Exchange Act"), McConville should be ordered to cease and desist from committing or causing any violations and any future violations of Sections 10(b) and 13(b)(5) of the Exchange Act and Rules 10b-5, 13b2-1, and 13b2-2 thereunder and from causing any violations or any future violations of Sections 13(a) and 13(b)(2) of the Exchange Act and Rules 12b-20 and 13a-1 thereunder; (c) pursuant to Section 21C of the Exchange Act, Harris should be ordered to cease and desist from committing or causing any violations and any future violations of Rule 13b2-2 under the Exchange Act and causing any violations and any future violations of Section 13(a) of the Exchange Act and Rules 12b-20, 13a-1, and 13a-13 thereunder; (d) pursuant to Section 21C(e) of the Exchange Act, Respondents should be ordered to pay disgorgement; and (e) pursuant to Rule 102(e)(1)(iii) of the Commission's Rules of Practice, Harris should be censured or denied, temporarily or permanently, the privilege of appearing or practicing before the Commission.

A hearing will be scheduled before an administrative law judge to determine whether the allegations contained in the Order Instituting Cease-and-Desist Proceedings Pursuant to Section 21C of the Securities Exchange Act of 1934 and Rule 102(e)(1)(iii) of the Commission's Rules of Practice ("Order") are true, to provide the Respondents an opportunity to dispute these allegations, and to determine what sanctions, if any, are appropriate in the public interest. The Commission directed that an administrative law judge shall issue an initial decision in this matter within 300 days from the date of service of the Order. (Rel. No. 34-48770, AAE Rel. No. 1910)