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UNITED STATES OF AMERICA
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In the Matter of JONATHAN B. ORLICK, ESQ., Respondent. |
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ORDER INSTITUTING ADMINISTRATIVE PROCEEDINGS PURSUANT TO RULE 102(e) OF THE COMMISSION'S RULES OF PRACTICE, MAKING FINDINGS, AND IMPOSING REMEDIAL SANCTIONS |
The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest that public administrative proceedings be, and hereby are, instituted against Jonathan B. Orlick ("Orlick") pursuant to Rule 102(e)(3)(i) of the Commission's Rules of Practice.
In anticipation of the institution of these proceedings, Orlick 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.2 below, which are admitted, Orlick 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.
On the basis of this Order and Orlick's Offer, the Commission finds that:
1. Orlick is a resident of Chatsworth, California. Orlick was employed at Gemstar-TV Guide International, Inc. and its predecessors ("Gemstar") from 1997 through 2003. From 1997 to March 2002, Orlick served as Gemstar's Deputy General Counsel and Senior Vice President, Intellectual Property and Licensing. Beginning in March 2001, Orlick served as a Director of Gemstar. In March 2002, Orlick was appointed Executive Vice President, General Counsel, and Secretary of Gemstar. From November 2002 to June 2003, Orlick served as Gemstar's President of Intellectual Property. In June 2003, Gemstar terminated Orlick.
2. On July 13, 2004, the Commission filed a third amended complaint ("complaint") against Orlick in SEC v. Henry C. Yuen, et al. (Case No. CV 03-4376 MRP (PLAx)). On January 20, 2005, the court entered a judgment permanently enjoining Orlick, by consent, from future violations or aiding and abetting violations of Sections 10(b), 13(a), 13(b)(2)(A), and 13(b)(5) of the Securities Exchange Act of 1934 ("Exchange Act") and Rules 10b-5, 12b-20, 13a-1, 13a-13, 13b2-1, and 13b2-2 thereunder. Orlick was also ordered to pay $150,000 in disgorgement, $5,510.62 in prejudgment interest, and a $150,000 penalty.
3. The Commission's complaint alleged, among other things, that from March 2000 through March 2002, Orlick was involved in the recording and reporting of fraudulent revenue and made misrepresentations to Gemstar's auditors for the sole purpose of providing a basis for recording the revenue. The complaint alleged that, based on his direct participation, Orlick knew at the time that Gemstar was improperly recording and reporting material amounts of revenue in the face of undisclosed, non-existent contracts and based on an undisclosed advertising transaction derived from a settlement agreement, all of which violated Generally Accepted Accounting Principles ("GAAP"). The complaint further alleged that Orlick's conduct resulted in Gemstar's filing materially false and misleading financial statements in its Forms 10-K for the fiscal years ended 2000 and 2001 as well as in its Forms 10-Q for the quarters ended June 30, 2001 and September 30, 2001.
In view of the foregoing, the Commission deems it appropriate and in the public interest to impose the sanction agreed to in Orlick's Offer.
Accordingly, it is hereby ORDERED, effective immediately, that Orlick is suspended from appearing or practicing before the Commission as an attorney.
By the Commission.
Jonathan G. Katz
Secretary
The Commission, with due regard to the public interest and without preliminary hearing, may, by order, . . . suspend from appearing or practicing before it any attorney . . . 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/34-51081.htm
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