UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION

Securities Exchange Act of 1934
Release No. 51057 / January 19, 2005

Accounting and Auditing Enforcement
Release No. 2170 / January 19, 2005

Admin. Proc. File No. 3-11797

I.

The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest that public administrative proceedings be, and hereby are, instituted against Martin Julien Marks ("Marks" or "Respondent") pursuant to Rule 102(e)(3)(i) of the Commission's Rules of Practice.¹

II.

In anticipation of the institution of these proceedings, Respondent has submitted an Offer of Settlement (the "Offer") which the Commission has determined to accept. Solely for the purpose of these proceedings and any other proceedings brought by or on behalf of the Commission, or to which the Commission is a party, and without admitting or denying the findings herein, except as to the Commission's jurisdiction over him and the subject matter of these proceedings, and the findings contained in Section III.3 below, which are admitted, Respondent consents to the entry of this Order Instituting Administrative Proceedings Pursuant to Rule 102(e) of the Commission's Rules of Practice, Making Findings, and Imposing Remedial Sanctions ("Order"), as set forth below.

III.

On the basis of this Order and Respondent's Offer, the Commission finds that:

1. Marks, age 55, was a certified public accountant licensed to practice in the State of Oregon before his license lapsed in 1985. He served as Chief Financial Officer of Cutter & Buck Inc. ("Cutter" or the "Company") from 1991 until approximately 1997. From 1997 through April 2002, Marks served as President and Chief Operating Officer of Cutter.

2. Cutter is a Washington corporation headquartered in Seattle, Washington. The Company designs and distributes upscale sportswear. The Company's common stock is registered with the Commission pursuant to Section 12(g) of the Securities Exchange Act of 1934 ("Exchange Act"), and has been quoted on the Nasdaq Stock Market since the Company's 1995 initial public offering.

3. On December 16, 2004, the Commission filed a complaint against Marks in SEC v. Martin Julien Marks (Civil Action No. 04-CV-2481 Z). On January 10, 2005, the court entered an order permanently enjoining Marks, by consent, from 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 against aiding and abetting violations of Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act and Rules 12b-20 and 13a-1 thereunder. Marks was also ordered to pay $45,777 in disgorgement and prejudgment interest, and prohibited from serving as an officer or director of a public company.

4. The Commission's complaint alleged, among other things, that Marks engaged in actions that resulted in Cutter filing materially false financial statements for the fiscal years ended April 30, 2000, and April 30, 2001. The Complaint alleged that, at the end of the 2000 fiscal year, Cutter shipped $5.7 million in products to three distributors who had no obligation to pay for the goods unless Cutter found customers for the goods, improperly recognizing revenue in violation of Generally Accepted Accounting Principles. According to the Complaint, Marks knew or was reckless in not knowing that the distributors did not have the financial ability to pay for the products. The Complaint further alleged that, when the distributors subsequently returned the products to Cutter, Marks asked the Company's Chief Financial Officer to record the returns in a manner that would conceal them from the Company's independent auditors. The Complaint also alleged that Marks signed management representation letters to Cutter's independent auditors in calendar years 2000 and 2001. According to the Complaint, these letters falsely stated, among other things, that all material transactions in fiscal years 2000 and 2001 were properly recorded in Cutter's accounting records, and that no goods had been shipped on consignment.

5. In a parallel proceeding brought by the United States Attorney's Office for the Western District of Washington, Marks agreed to pay a $65,000 penalty in order to settle criminal charges against him. Under the plea agreement, Marks would not be subject to further criminal sanctions.

IV.

In view of the foregoing, the Commission deems it appropriate and in the public interest to impose the sanction agreed to in Respondent Marks's Offer.

Accordingly, it is hereby ORDERED, effective immediately, that:

Marks is suspended from appearing or practicing before the Commission as an accountant.

By the Commission.

Endnotes

---

¹ Rule 102(e)(3)(i) provides, in relevant part, that:

The Commission, with due regard to the public interest and without preliminary hearing, may, by order, . . . suspend from appearing or practicing before it any . . . accountant . . . who has been by name . . . permanently enjoined by any court of competent jurisdiction, by reason of his or her misconduct in an action brought by the Commission, from violating or aiding and abetting the violation of any provision of the Federal securities laws or of the rules and regulations thereunder.

http://www.sec.gov/litigation/admin/34-51057.htm