Accounting Case Study

This paper involves a case of court order approving the designation of a Distribution Agent by the US District Judge Paul L. Friedman of Columbia to make payment to claimants out of a distribution fund, due to an alleged fraudulent scheme to promote, distribute, and sell stock of Pay Pop, Inc. , a now-defunct British Columbia-based telecommunications company. This will show how companies, which committed fraudulent scheme about the promotion, distribution, or sale of stock of another company, become liable to those who became victims or the fraud.

Thus, on May 1, 2006, Judge Friedman entered an order approving Richard Weissman as the Distribution Agent to distribute funds as paid by defendants CIBC Mellon Trust Co. , Desjardins, Nevett, and Soloski that were all subject to United States Securities and Exchange Commission (SEC) enforcement actions in relation to the fraudulent scheme. The court order also specifies the process for the distribution of funds paid to the Court in actions involving the said defendants on the bases of allegations of fraudulent scheme to promote, distribute, and sell stock of Pay Pop, Inc.

The same order limits the eligible claimants for filing claims with the Distribution Agent to purchasers of Pay Pop shares for the period covering July 1998 to September 1999. Eligible claimants should review the memorandum from Richard Weissman as Distribution agent, which contain an explanation of Claim Procedure as ordered by court and the Notice of Last Day to File Proof of Claim. It is clear that due process is being observed in the claim since failure to obey the contents of the order could mean denial of the claim.

In the order of November 2007, approved claims to be paid were limited to those received and approved by the Distribution Agent as of approximately September 30, 2007 where a distribution to these approved claimants materialized in February 2008. However, order authorized the filing of additional late claims with the Distribution Agent under certain conditions, which include limiting the only late claims to delivered to the Distribution Agent that with a postmark of not later than March 31, 2008 which must be sent to the Distribution Agent by March 31, 2008.

Part of the process of claim requires the printing out of the online Proof of Claim Form, immediately filling it out, attaching all the investment financial information required and mailing the claim package to the Distribution Agent. It can be concluded that those commit fraud in securities cannot escape the necessary penalties that may be imposed by the law through the enforcement power of the SEC.

It is clear in this case that the court has appointed a distribution agent who will make the distribution payment through a legal process that must be followed with a given deadline within which to file. To temper a seeming strictness of the process or order earlier made by the court, late claimants were also given a certain time allowance to file their claims under again certain conditions.

While victims can have the chance to recover losses from the those which caused the fraud, the law has provided for a process for the claim and those who may not be able to do so within the deadlines and conditions set by the court, would suffer the consequences of not having asserted their right properly and on time. Works Cited United States Securities and Exchange Commission, Pay Pop, Inc. , 2008 {www document} URL http://www. sec. gov/divisions/enforce/claims/paypop. htm, Accessed March 21, 2009 Fischer, L. et, al, Teachers and the Law: A Guide for Educators, Longman, 1981