DGSE Companies, Inc. Announces Final Resolution of SEC Investigation
May 28 2014 - 5:44PM
Business Wire
DGSE Companies, Inc. (NYSE MKT: DGSE) (“DGSE” or the “Company”),
a leading wholesaler and retailer of jewelry, diamonds, fine
watches, and precious metal bullion and rare coin products, today
announced that it had reached a settlement with the United States
Securities and Exchange Commission (“SEC”), without admitting or
denying allegations of any wrongdoing, which concludes the SEC’s
investigation of accounting issues at DGSE from 2009 to 2011. This
settlement concerns the accounting systems, policies, procedures,
and controls DGSE had in place over inventory valuation and related
disclosures DGSE filed with the SEC under its previous management.
The SEC investigation, which DGSE first disclosed in June of 2012,
focused on accounting irregularities that were uncovered after the
departure of prior management, and which DGSE subsequently
self-reported to the SEC.
Under the terms of the settlement, the Company consented to the
entry of a judgment requiring it to implement corporate governance
reforms, which are substantially similar to those it already agreed
to in settling its 2013 derivative lawsuit. DGSE also agreed to the
appointment of an independent consultant to review the Company’s
accounting controls. No civil penalties were to be imposed on DGSE
as part of the SEC settlement.
Concurrent with its announcement of the DGSE settlement, the SEC
announced a settlement with DGSE’s former Chief Financial Officer,
I. John Benson. According to a press release issued by the SEC on
May 27, 2014, Benson agreed to a settlement in which he will pay a
$75,000 penalty, be permanently barred from serving as an officer
or director of a public company, and be suspended from practicing
as an accountant on behalf of any publicly traded company or other
entity regulated by the SEC.
According to the same SEC press release, Benson is charged with
violating the antifraud, reporting, recordkeeping,
lying-to-accountants and internal controls provisions of the
federal securities laws. DGSE is charged with reporting,
recordkeeping, and internal controls failures. DGSE and Benson each
consented to injunctions against future violations of these
provisions, and DGSE has already taken or agreed to take remedial
steps to correct its deficiencies.
Dusty Clem, Chairman and Chief Executive Officer, stated, “We’re
pleased that no financial penalties are expected to be imposed on
DGSE as part of this settlement, and are happy to be closing the
chapter on these legacy matters that relate to DGSE’s previous
management team. With this behind us, we can more effectively focus
on the future of the Company.”
About DGSE Companies
DGSE Companies, Inc. wholesales and retails jewelry, diamonds,
fine watches, and precious metal bullion and rare coin products
through its Bullion Express, Charleston Gold & Diamond
Exchange, and Dallas Gold & Silver Exchange operations. DGSE
also owns Fairchild International, Inc., one of the largest vintage
watch wholesalers in the country. In addition to its retail
facilities in Illinois, South Carolina, and Texas, the Company
operates internet websites which can be accessed at
www.bullionexpress.com, www.dgse.com, and www.cgdeinc.com.
Real-time price quotations and real-time order execution in
precious metals are provided on another DGSE website at
www.USBullionExchange.com. Wholesale customers can access the full
vintage watch inventory through the restricted site at
www.FairchildWatches.com. The Company is headquartered in Dallas,
Texas and its common stock trades on the NYSE MKT exchange under
the symbol "DGSE."
This press release includes statements which may constitute
"forward-looking" statements, usually containing the words
"believe," "estimate," "project," "expect" or similar expressions.
These statements are made pursuant to the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995.
Forward-looking statements inherently involve risks and
uncertainties that could cause actual results to differ materially
from the forward-looking statements. Factors that would cause or
contribute to such differences include, but are not limited to,
continued acceptance of the Company's products and services in the
marketplace, competitive factors, dependence upon third-party
vendors, and other risks detailed in the Company's periodic report
filings with the Securities and Exchange Commission. By making
these forward-looking statements, the Company undertakes no
obligation to update these statements for revisions or changes
after the date of this release.
DGSE Companies, Inc.Dusty Clem, 972-587-4021Chairman, President
and CEOinvestorrelations@dgse.comorHayden IRBrett Maas,
646-536-7331Managing Partnerbrett@haydenir.com
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