Agency sues former exec
The Securities and Exchange Commission late Monday filed a lawsuit accusing Chester "Chet" Howard of Las Vegas, former chief executive officer and acting chief financial officer of AXM Pharma, of falsely reporting company sales and profits.
Attempts to reach Howard for comment failed.
AXM Pharma of Diamond Bar, Calif., is a publicly traded drug company that sold products to Hong Kong, other cities in China, and Taiwan.
The commission's lawsuit said AXM reported $3.2 million in revenue for the quarter ending June 30, 2005, but said most of the sum was for Sunkist-licensed vitamins and vitamin supplements before payment was assured and before some products were delivered.
Actual revenues were $329,000, according to the SEC. The company falsely reported $179,000 in profit but later restated results and recorded a $1.5 million loss.
The SEC made six claims against Howard including fraud, record-keeping violations, false statement to an accountant and aiding and abetting.
AXM Pharma shares, which trade on the Pink Sheets, fell 1 cent, or 15.4 percent, Tuesday to close at 8 cents.
Contact reporter John G. Edwards at jedwards@reviewjournal.com or (702) 383-0420.
