United States of America
Before the
Securities and Exchange Commission

Securities Exchange Act of 1934
Release No. 45615 / March 21, 2002

Accounting and Auditing Enforcement
Release No. 1530 / March 21, 2002

Administrative Proceeding
File No. 3-10735

I.

The Securities and Exchange Commission ("Commission") deems it appropriate that public administrative proceedings be, and hereby are, instituted pursuant to Section 21C of the Securities Exchange Act of 1934 ("Exchange Act") against Uri Evan ("Evan"), Joseph S. Cohen ("Cohen"), and Frederick J. Horowitz ("Horowitz") (collectively "Respondents").

II.

In anticipation of the institution of these administrative proceedings, Evan, Cohen, and Horowitz have submitted Offers of Settlement ("Offers") 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 in which the Commission is a party, without admitting or denying the findings set forth below, except as to jurisdiction of the Commission over them and over the subject matter of these proceedings, which Respondents admit, Respondents consent to the entry of this Order Instituting Public Administrative Proceedings Pursuant to Section 21C of the Securities Exchange Act of 1934, Making Findings, and Imposing a Cease-and-Desist Order ("Order") set forth below.

Accordingly, it is ordered that proceedings pursuant to Section 21C of the Exchange Act be, and hereby are, instituted.

III.
Facts

The Commission makes the following findings:¹

A. Respondents

1. Uri Evan, age 66, was Chief Executive Officer of USA Detergents, Inc. from 1993, its Chairman from 1989, and its interim President at various times beginning in 1997. He resides in New York, New York.
    
2. Joseph S. Cohen, age 51, was the Vice Chairman of the Board of Directors of USA Detergents from 1988 until he resigned in 1997. He resides in Brooklyn, New York.
    
3. Frederick J. Horowitz, age 37, was the Executive Vice President and Chief Administrative Officer of USA Detergents from June 1995 and a director from 1989, until he resigned in September 1997. He resides in Englewood, New Jersey.

B. Other Relevant Entity

USA Detergents, at all times relevant, was a Delaware corporation with its principal executive offices in North Brunswick, New Jersey. The company was a manufacturer and marketer of laundry and household cleaning products. Its common stock was registered with the Commission pursuant to Section 12(g) of the Exchange Act and traded on the NASDAQ National Market System. On May 21, 2001, Church & Dwight Co., Inc. announced that its wholly owned subsidiary, US Acquisition Corp., had completed a $7.00 per share cash tender offer for the outstanding shares of USA Detergents common stock. As a result of that acquisition, USA Detergents is no longer a Section 12 registrant.

C. Respondents' Violative Conduct

During the last half of 1996, in anticipation that the company could not otherwise achieve its budget or meet analysts' expectations for the company's financial results, certain officers and managers at USA Detergents resorted to improper methods to increase the company's net income and earnings, including misclassifying and amortizing marketing expenses and improperly recognizing revenue from certain transactions. Evan was the Chairman and CEO of USA Detergents at the time this conduct occurred. Cohen was the company's Vice Chairman at the time. Horowitz was Chief Administrative Officer, an Executive Vice President, and a director.

Evan was present at meetings in 1996 during which managers discussed the fact that marketing expenses far exceeded their budgeted amounts and the company's costs for placing its products on merchants' shelves (so-called "slotting fees," which could be amortized) were lower than expected. At those meetings, Evan remarked that marketing expenses were too high and slotting fees were too low. Thereafter, other members of USA Detergents' management improperly reclassified millions of dollars of marketing expenses as slotting fees and then amortized those fees. Consequently, the company understated expenses in its 1996 financial statements and included those financial statements in its 1996 annual report on Form 10-K. Evan learned that 1996 marketing expenses had been lowered and amortized costs had been increased. He did not inquire as to how or why the changes were made, but instead simply signed the annual report on Form 10-K, which he knew or should have known included financial statements that misrepresented the company's income for 1996.

Together with Cohen, Evan also took part in meetings at which management discussed ways to meet the company's 1996 sales targets. Horowitz participated in at least one of these discussions. As a result of the discussions, other members of USA Detergents' management caused goods to be shipped in 1996 for which no orders had yet been entered and caused revenue from these shipments to be recognized at the time of shipment. The company also stayed open on January 1, 1997, to ship goods and recognize the resulting revenue in 1996. Cohen and Horowitz were present at the company on New Year's Day. Evan, Cohen, and Horowitz thereafter signed the company's 1996 annual report on Form 10-K, which they knew or should have known included financial statements that misrepresented the company's sales and income for 1996.

D. False Filing

In March of 1997, USA Detergents filed with the Commission its annual report on Form 10-K for 1996. The filing was false and misleading because, as a result of the improper practices described herein, it included financial statements that misrepresented the company's financial condition and results of operations, overstating its income and its earnings.

IV.
Violation of the Exchange Act Reporting Provisions

Section 13(a) of the Exchange Act and the regulations promulgated thereunder require issuers with securities registered under Section 12 of the Exchange Act to file certain periodic reports with the Commission. The obligation to file such reports embodies the requirement that they be true and correct. See, e.g., SEC v. Savoy Indus., Inc., 587 F.2d 1149, 1165 (D.C. Cir. 1978), cert. denied, 440 U.S. 913 (1979). USA Detergents' 1996 annual report on Form 10-K was false and misleading inasmuch as it included financial statements that misrepresented the company's financial condition and results of operations.

V.

Based on the foregoing, the Commission finds that each of Evan, Cohen, and Horowitz was a cause of USA Detergents' violation of Section 13(a) of the Exchange Act.

VI.

In view of the foregoing, the Commission deems it appropriate to accept Evan's Offer, Cohen's Offer, and Horowitz' Offer.

Accordingly, IT IS HEREBY ORDERED that

Pursuant to Section 21C of the Exchange Act, each of Evan, Cohen, and Horowitz cease and desist from causing any violation and any future violation of Section 13(a) of the Exchange Act.

By the Commission.

Jonathan G. Katz
Secretary

Endnote

¹ The findings herein are made pursuant to Evan's Offer, Cohen's Offer, and Horowitz' Offer and are not binding on any other persons or entities in these or any other proceedings.

http://www.sec.gov/litigation/admin/34-45615.htm