Blinding performance

Michael Hiebert, the former chief financial officer of Premier Laser Systems, a maker of medical lasers and fibre optic equipment in Orange County, California, has been sued for causing the firm to overstate quarterly sales by more than 33 per cent in the last three months of 1997. This was accounted for by a fictitious US$2.4 million sale of dental lasers to a buyer who had simply entered into a non-binding agreement to promote the devices. If the sale had been genuine it would have enabled the company to record its first quarterly profit. The SEC claims that Hiebert was negligent in his inspection of the paperwork relating to the non-existent sale, which permitted the company’s since deceased executive vice president to execute the fraud. Hiebert has been charged with securities fraud, falsifying Premier’s books and records, with aiding and abetting the company’s breaches of the periodic reporting, recordkeeping and internal controls provisions of the federal securities laws. He settled by accepting a permanent injunction, without admitting or denying the charges, and payment of a US$10,000 fine.