A month after the Securities and Exchange Commission brought charges against former Assisted Living Concepts CEO Laurie Bebo, the exec is fighting back with her own charges against government regulators.
Bebo has filed a lawsuit against the SEC, saying the regulator is violating her right to a jury trial, according to a complaint filed on Friday, Jan. 2. In her complaint, Bebo alleges that the SEC, by filing charges against her in its in-house court instead of a federal court, chose a legal venue that disadvantages her defense and gives her little time to review 1.5 million pages of investigative files.
“The Commission has stripped her entirely of the ability to secure the testimony at the hearing, much less at a deposition, of key witnesses in the case, including the ALC’s chairman and vice chairman of the board, the chair of ALC’s audit committee, and two other members of the audit committee,” according to Bebo’s complaint.
In sum, the SEC has “chosen a forum that allows it to investigate, prosecute, adjudicate and, if successful in supporting the charges before an administrative law judge, provide appellate review of a case for which the very same Commissioners approved the filing of charges in the first place,” the complaint states.
In early December, Bebo and former Assisted Living Concepts CFO John Buono were sued by the SEC over allegations that the executives listed fake occupants at some of its senior living communities in order to meet lease requirements.
The charges alleged that Bebo and Buono conducted a scheme under which they manipulated internal books and records when it appeared they would default on lease covenants under an agreement with Ventas, Inc.
Under the scheme, the executives allegedly misrepresented their occupancies at several properties by listing friends, family members, and existing and past employees as residents, when they did not in fact reside in the communities.
According to the SEC’s findings, the alleged fraud began in 2009 and continued through 2012, at which point Assisted Living Concepts, now named Enlivant, operated more than 200 senior living communities including more than 9,000 units.
Written by Emily Study