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RAPAPORT... DGSE Companies Inc. reached a settlement with the U.S. Securities & Exchange Commission (SEC), without admitting or denying allegations of wrongdoing and it concludes an investigation into the company's accounting issues that were brought forward for the fiscal years 2009 to 2011. DGSE addressed irregularities over its accounting systems, policies, procedures and controls that valued inventory and related disclosures under its previous management. Dusty Clem, the recently appointed CEO, said, “We’re pleased that no financial penalties are expected to be imposed on DGSE as part of this settlement and are happy to be closing the chapter on these legacy matters that related to DGSE’s previous management team. With this behind us, we can more effectively focus on the future of the company.” Under the terms of the settlement, DGSE consented to implement corporate governance reforms, which are substantially similar to those enacted during the 2013 derivative lawsuit settlement. DGSE also agreed to appoint an independent consultant to review its accounting controls. Concurrently, the SEC settled with DGSE’s former chief financial officer, I. John Benson, whereas he agreed to pay a $75,000 penalty, will be permanently barred from serving as an officer or director of a public company and he was suspended from practicing as an accountant on behalf of any publicly traded company or other entity regulated by the SEC. DGSE noted that Benson is charged with violating the antifraud, reporting, record keeping, lying-to-accountants and internal controls provisions of the federal securities laws. DGSE and Benson each consented to injunctions against future violations of these provisions and DGSE has already taken or agreed to take remedial steps to correct its deficiencies, according to the firm.
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