The saga continues.
The U.S. Securities and Exchange Commission (SEC) announced Dec. 8 that it will review a decision ordering former Assisted Living Concepts CEO Laurie Bebo to pay $4.2 million in civil penalties and prohibiting her from serving in director and officer positions.
“[T]he commission will determine what sanctions, if any, are appropriate in this matter,” the SEC stated in a Dec. 8 order granting the petition for review.
Administrative Law Judge Cameron Elliot handed down the initial penalty in October, following allegations that, while acting as CEO, Bebo and former CFO of Assisted Living Concepts John Buono conducted a scheme to meet lease requirements by falsifying documents with fake occupants. As part of the scheme, the executives supposedly misrepresented their occupancies at multiple properties by listing family members, friends, and past and current employees as residents, when they did not actually reside in the communities.
Bebo filed for review of the judge’s decision, and on Tuesday, the SEC instructed her to file the opening brief of her administrative appeal by Jan. 7. The agency’s enforcement division will then have until Feb. 8 to file a brief in response, with Bebo’s reply due Feb. 22.
The administrative appeal comes after Bebo lost her Seventh Circuit appeal attacking the constitutionality of the SEC’s internal forum. In September, Bebo also filed a lawsuit against Assisted Living Concepts for $900,000 in attorney fees and additional expenses she incurred as a result of defending herself in the federal civil case and a lawsuit against the SEC.
In January, Buono settled with the SEC in the case against him for $100,000. That settlement also prohibits Buono from serving as an director or officer of a public company.
Written by Mary Kate Nelson