Sport-Haley, Inc. announced that the United States District Court for the District of Colorado has entered a Final Judgment, pursuant to a settlement reached with the SEC to resolve the pending claims in the civil action brought by the SEC against Sport-Haley and its former Controller. The settlement was approved by the Commission in Washington, D.C. on December 8, 2005. Judge Nottingham signed the Final Judgment as to Sport-Haley, Inc. today. The settlement did not call for Sport-Haley to pay any fine, civil penalty or disgorgement.
Pursuant to a written Consent entered into by Sport-Haley as part of the settlement, Sport-Haley consented, without admitting or denying the allegations of the Complaint or Amended Complaint, to the entry of an injunction enjoining it from violating §17(a)(2) and §17(a)(3) of the Securities Act of 1933 (the “Securities Act”), which do not require proof of scienter (an intent to deceive, manipulate or defraud), but may be based upon a showing of negligence, §13(b)(2) and §15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”), and Rules 12b-20, 15d-1 and 15d-13 promulgated thereunder. The settlement resulted in no injunction or adjudication against Sport-Haley with respect to the claims alleging violations of §17(a)(1) of the Securities Act, §10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder, which each require proof of scienter.
Pursuant to a separate settlement with the SEC, the Court also entered a Final Judgment with respect to Mr. Auger, in which Mr. Auger consented, without admitting or denying the allegations of the complaint or amended complaint, to the entry of an injunction enjoining him from violating various provisions of the federal securities laws and regulations and other relief.
