Washington, D.C., March 29, 2007 – LawFuel.com – The Securities and …

Washington, D.C., March 29, 2007 – LawFuel.com – The Securities and Exchange Commission today announced that Nicor, Inc., a major Chicago-area natural gas distributor, and Jeffrey Metz, its former Assistant Vice President and Controller, will pay more than $10 million to settle charges that they engaged in improper transactions, made material misrepresentations, and failed to disclose material information regarding Nicor’s gas inventory in order to meet earnings targets and increase the company’s revenues under a performance-based rate plan administered by the Illinois Commerce Commission.

The SEC filed a settled civil injunctive action against Nicor and Metz, alleging financial fraud lasting from 1999 to 2002. The funds Nicor and Metz agreed to pay in disgorgement and civil penalties will be placed in a Fair Fund for distribution to affected shareholders. Nicor also agreed to be permanently enjoined from violating the antifraud and reporting provisions of the federal securities laws. Metz settled the civil action filed against him by consenting to a permanent injunction, a five-year officer-and-director bar, and a payment of more than $60,000, which includes the surrender of bonuses and a civil penalty.

Merri Jo Gillette, Director of the Commission’s Midwest Regional Office, said, “Nicor manipulated its financial performance by engaging in sham transactions and attempting to disguise these transactions as legitimate in a complex fraudulent scheme.”

Linda Thomsen, Director of the Commission’s Division of Enforcement, said, “The Commission’s action underscores its continued resolve to impose tough sanctions and hold corporations and individual wrongdoers accountable for their conduct.”

The complaint alleges that Nicor, acting through Metz and other senior officers, devised a method by which it could enter into a series of improper transactions to shift inventory off of its books and profit by accessing a substantial portion of its low-cost, last-in-first-out (LIFO) layers of inventory. These transactions allowed Nicor to ensure that it met its earnings targets by inflating its income for 2000 and 2001, and for each of the quarters within those years, as reported in its financial statements for those periods.

Additionally, Nicor failed to disclose, in either its Management’s Discussion & Analysis section of its periodic reports, or its financial statements filed with those reports, that it had recorded material non-recurring income resulting from LIFO liquidations.

The Commission’s investigation is continuing.

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