By Jessica Rush w/Plano Star
Just days after Plano City Council hopeful Cathy Fang launched her kick off campaign for Place 3, information surfaced about her involvement with a company being sued by the United States Securities and Exchange Commission.
The information came from an article posted in June on the SEC’s website (www.sec.gov/litigation/litreleases/2010/lr21550.htm), charging the former CFO of Texas-based Advanced Materials Group, Inc., William G. Mortensen, with securities fraud and misappropriation of hundred of thousands of dollars.
Fang, a certified public accountant with extensive corporate experience, worked as an independent auditor for AMG. Last June, she responded to the litigation release by voluntarily removing her registration with the SEC. The article says she “consented to a permanent bar from appearing or practicing before the commission as an accountant.”
The wording “permanent bar” does not mean Fang can never work with the SEC in the future. According to the SEC’s Rules of Practice, any person who is disqualified or permanently suspended from practicing before the commission may submit an application for reinstatement at any time. The commission can then choose to hold a hearing and reinstate that individual if shown good cause.
Her campaign put out a press release on Wednesday, responding to questions about the SEC investigation of AMG.
They said Fang was provided with fraudulent and incorrect information from AMG during the audit process. She certified the audit, using the false profit information, and filed necessary paperwork on behalf of AMG to the SEC.
“Fang immediatelyworked with the SEC regarding the AMG investigation … Fang does have the right to register with the SEC in the future,” the release said.
Fang could only comment briefly about the matter since it is still under investigation.
“It is terrible that in this world there are people that are dedicated to commit crimes regardless of the safe guards and controls in place, which is what appears to have happened at AMG,” Fang said in the release. “This incident with AMG was unfortunate, but those that would cheat the public will not deter me to do what is right in business or politics.”
A member of Fang’s campaign said her agreement with the SEC does not affect her ability or licensing to practice as a CPA.
The SEC has sued Mortensen charging that he “committed securities fraud, lied to accountants, falsified records and circumvented internal controls, and aided and abetted reporting, record-keeping and internal control violations.”
The commission also alleged that Mortensen misappropriated AMG funds to pay for personal expenses: a country club membership, extensive home remodeling, property taxes and family vacations using private jets.
AMG is a manufacturing company headquartered in Garland.
