Law Announcements – Jury Clears Former Auto Parts CEO of Securities Fraud

(Detroit, MI) LawFuel – A federal jury rejected claims of intentional misconduct brought by the Securities and Exchange Commission against Ranko “Ron” Cucuz, the former CEO of Hayes Lemmerz International.

The SEC had alleged {Civil Action No. 2:06-CV-11935 (E.D Mich.)} that in 2001 Cucuz violated securities laws relating to the company’s year 2000 financial statements. The government further alleged that Cucuz had made misstatements to Hayes’ auditors, falsified Hayes’ books and records and aided and abetted the company in violating the securities laws.

Contrary to several earlier media reports, the jury did not agree and in fact found in favor of Cucuz on each of these claim. They did find Cucuz to have been negligent in his handling of accounting issues, essentially saying they believed as CEO, Cucuz should have been aware of the actions of other employees in the company. U.S. District Judge Arthur J. Tarnow previously had thrown out additional claims brought against Cucuz by the SEC.

“I always believed that the SEC overreached in pursuing me in this matter,” Cucuz said following the verdict. “I always knew I did nothing intentionally wrong and I am pleased the jury has agreed.”

Cucuz, 64, stepped down as CEO of Hayes in August 2001 but remained on the company’s board of directors until 2003. In September 2001, new management announced it would be restating its financial reports for 2000 and the first quarter of 2001.

The SEC brought the civil case against Cucuz in 2006, alleging he had knowingly withheld information about the company’s financial condition from its auditors and the public. A 10-person jury rejected those charges on Wednesday.

Hayes Lemmerz of Northville Michigan is one of the country’s largest suppliers of wheels and other automotive parts.

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