David C. Guenthner and Jay M. Samuelson

Litigation Release No. 17297 / January 8, 2002

Accounting and Auditing Enforcement Release No. 1489 / January 8, 2002

SEC v. David C. Guenthner and Jay M. Samuelson, Civ. Action No. 8:02CV10 (District of Nebraska)

Today, the Securities and Exchange Commission filed suit in the United States District Court for the District of Nebraska against David C. Guenthner, of Omaha, Nebraska, the former chief financial officer of InaCom Corp., and Jay M. Samuelson, of Gretna, Nebraska, InaCom's assistant controller, for violations of the antifraud, periodic reporting, record keeping, internal controls, and lying to auditors provisions of the federal securities laws. InaCom, a Delaware corporation headquartered in Omaha, Nebraska, was primarily a value-added computer reseller that filed for Chapter 11 bankruptcy protection on June 16, 2000.

According to the Complaint, Guenthner and Samuelson engaged in a scheme to manage earnings in InaCom's Form 10-Qs filed with the Commission on or about May 11, 1999, August 10, 1999, and November 9, 1999. During the first three quarters of 1999, the Commission claims that Guenthner and Samuelson improperly accrued unallocated, general reserves, then reversed $7.1 million of these reserves into income in the third quarter of 1999. The Complaint states these unjustified reversal of reserves in the third quarter of 1999 lacked any credible basis. Also, according to the Complaint, in the third quarter of 1999, Guenthner and Samuelson knowingly posted $10.8 million of inventory cost reductions that related to prior quarters, thereby further artificially inflating income in the third quarter of 1999. The Commission alleges that because of these inappropriate accounting practices in the third quarter of 1999, the company reported a profit when in reality the company had suffered a loss. In addition, the Complaint states that throughout the first three quarters of 1999, that Guenthner caused InaCom to recognize manufacturer rebates to which it was not entitled, thereby understating its cost of goods sold and overstating net income. According to the Complaint, this inclusion of improper manufacturer rebates overstated InaCom's income by more than $13 million in its 1999 Form 10-Qs.

The complaint alleges that Guenthner and Samuelson violated Sections 10(b) and 13(b)(5) of the Securities Exchange Act of 1934 ("Exchange Act") and Rules 10b-5, 13b2-1, and 13b2-2 thereunder, and aided and abetted InaCom's violations of Sections 13(a) and 13(b)(2) of the Exchange Act and Rules 12b-20 and 13a-13 thereunder.

SEC Complaint in this matter.