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Case 2:09-cv-01510-GMS Document 78 Filed 11/12/10 Page 1 of 6


DONALD W. SEARLES, California Bar No. 135705
E-mail: [email protected]
C. DABNEY O’RIORDAN, California Bar No. 205158
E-mail: [email protected]

Attorneys for Plaintiff
Securities and Exchange Commission
Rosalind R. Tyson, Regional Director
Michele Wein Layne, Associate Regional Director
John M. McCoy III, Associate Regional Director
5670 Wilshire Boulevard, 11th Floor
Los Angeles, California 90036-3648
Telephone:
Facsimile:



(323) 965-3998
(323) 965-3908

UNITED STATES DISTRICT COURT

DISTRICT OF ARIZONA

Plaintiff,

SECURITIES AND EXCHANGE
COMMISSION,




MAYNARD L. JENKINS,




Defendant.


vs.



Case No. CV-09-01510-PHX-GMS

PLAINTIFF SECURITIES AND
EXCHANGE COMMISSION’S
SUPPLEMENTAL SEPARATE
STATEMENT OF MATERIAL FACTS IN
SUPPORT OF MOTION FOR PARTIAL
SUMMARY JUDGMENT AGAINST
DEFENDANT MAYNARD L. JENKINS

Date:
Time:
Place:



December 10, 2010
9:00 a.m.
Courtroom 602
(Hon. G. Murray Snow)

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Case 2:09-cv-01510-GMS Document 78 Filed 11/12/10 Page 2 of 6



Plaintiff Securities and Exchange Commission (“Commission”) files this

Supplemental Statement of Material Facts in support of its Motion for Partial Summary
Judgment against Maynard L. Jenkins (“Jenkins”), pursuant to Fed. R. Civ. P. 56 and
Local Rule 56.1.

As argued in its reply to Jenkins’ opposition to the Commission’s motion for

partial summary judgment, it is the Commission’s position that the Declaration of Peter
A. Solomon in Support of Opposition of Defendant Maynard L. Jenkins to the SEC’s
Motion for Partial Summary Judgment should be ignored and ruled inadmissible, in part,
because is it based on an incomplete and highly selective review of portions of certain
testimonies taken by the Commission. See Commission’s Reply to Jenkins’ Opposition
to Plaintiff’s Motion for Partial Summary Judgment, pp. 6-8. Set forth below are
counter-designated portions of the same testimonies that Mr. Solomon purported to rely
upon, in which the witnesses are questioned on their reaction to having been informed of
the results of CSK’s Audit Committee-led investigation. Curiously, Mr. Solomon does
not make reference to those portions of the witnesses’ testimony and, from his
ambiguously worded declaration, it is not clear whether he ever reviewed those portions
of the witnesses’ testimony. In addition, the Commission presents to the Court the
lengthy FBI-302 report which summarizes the disclosures made by CSK’s outside
counsel to the U.S. Department of Justice, the F.B.I, the I.R.S. and the U.S Postal
Service, which details the findings and supporting documents of CSK’s Audit
Committee-led investigation. Supplemental Declaration of Donald Searles ISO of
Plaintiff’s Motion for Partial Summary Judgment (“Supp. Searles Decl.); Ex. 29. Mr.
Solomon did not review this document, or any of the underlying documents referenced
therein, further undermining the support for the conclusions presented in his declaration.
I.

TESTIMONY OF ALAN AUGENSTEIN
1.

Al Augenstein was the PwC engagement partner on CSK Auto, Corp.

Supp. Searles Decl., Ex. 20 (R.T. 12/02/2007, p. 24:21-23). Based on his meetings with
representatives of CSK Audit Committee-led investigation, and his review of documents

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Case 2:09-cv-01510-GMS Document 78 Filed 11/12/10 Page 3 of 6



provided to CSK’s Board of Directors to explain the result of the internal investigation, it
became obvious to Mr. Augenstein that CSK’s employees “were not telling us everything
they knew” and “were actually modifying documents to give to us.” Supp. Searles Decl.,
Ex. 21 (RT 12/05/2007, p. 308:21-25). Mr. Augenstein further testified that based on the
results of the internal investigation several CSK employees, including but not limited to
Don Watson, had lied to PwC. Id., pp. 309-319.
II.

TESTIMONY OF TERILYN HENDERSON
2.

Terilyn Henderson was a member of CSK’s Board of Directors. Supp.
Searles Decl., Ex. 22 (R.T. 11/29/2007, p. 16:21-17:5). As a result of CSK’s Audit
Committee-led investigation she learned that CSK was paying back vendors for amounts
that it had previously collected as part of CSK’s LWT program. Id., p. 66:1-16. She also
learned that CSK was moving funds from one LWT program year to another LWT
program year to close out the LWT account receivable, which was “wrong,”
“unacceptable,” a “violation of GAAP” and “lying.” Id., pp. 183:1- 184:1. Furthermore,
as a result of CSK’s Audit Committee-led investigation, CSK’s Board decided to
terminate the employment of Don Watson, Ed O’Brien, Martin Fraser, and Gary Opper,
among others, and that Maynard Jenkins should retire. Id., pp. 209:1-25
III. TESTIMONY OF ARTHUR LEIBOWITZ

3.

Arthur Leibowitz was PwC’s concurring partner on the CSK engagement.
Supp. Searles Decl., Ex. 23 (R.T. 01/11/2008, pp. 26, 29:10-23). Mr. Leibowitz testified
that he was “appalled” by the results of CSK’s Audit Committee-led investigation and
that PwC had been “lied to” by Don Watson and Ed O’Brien. Id., pp. 173:10-174:11;
175:3-11; 176:10-25; 177:23-178:14.
IV. TESTIMONY OF CHARLES PHILIPPIN

4.

Charles Philippin was a member of CSK’s Board of Directors. As result of
the CSK’s Audit Committee-led investigation, the Board terminated the employment of
Martin Fraser, Don Watson, Ed O’Brien, Gary Opper and others. Supp. Searles Decl.,
Ex. 24 (R.T. 12/06/2007, p. 561:15). Mr. Philippin further explained the basis for the

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Case 2:09-cv-01510-GMS Document 78 Filed 11/12/10 Page 4 of 6



Board’s employment decisions, stating that Don Watson failed to report things that
happened to the Audit Committee and the Board, and that Ed O’Brien authorized
inappropriate adjustments and entries in CSK’s books and records and had made
misrepresentations to him in connection with a self-assessment following CSK’s first
restatement. Id., pp. 564:20-566:3.

TESTIMONY OF RYAN SWINCICKI
5.

Ryan Swicicki was a member of PwC’s engagement team on CSK Auto.
Upon learning the results of CSK’s Audit Committee-led investigation, Mr. Swincicki
stated that he was “shocked” and “disappointed.” Supp. Searles Decl., Ex. 25 (R.T.
10/16/2007, pp. 630:6-631:16). Specifically, Mr. Swicicki stated that he believed that
PwC had been misled by Don Watson, Martin Fraser, Ed O’Brien and Gary Opper, and
explained the basis for his opinion. Id., pp. 632-658.
VI. TESTIMONY OF RANDY VALLEN

6.

Randy Vallen was a member of PwC’s engagement team on CSK Auto.

Based on the results of CSK’s Audit Committee-led investigation, Mr. Vallen believed he
had been lied to by Don Watson and Andy Stevens, and explained the basis for his
opinion. Supp. Searles Decl., Ex. 26 (R.T. 10/31/2007, pp. 234:7-237:8; 240:11-244:11).

Dated: November 12, 2010






Donald W. Searles
Attorney for Plaintiff
Securities and Exchange Commission

/s/ Donald W. Searles













Respectfully submitted,



























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Case 2:09-cv-01510-GMS Document 78 Filed 11/12/10 Page 5 of 6



PROOF OF SERVICE

Boulevard, 11th Floor, Los Angeles, California 90036-3648
Telephone No. (323) 965-3998; Facsimile No. (323) 965-3908.


I am over the age of 18 years and not a party to this action. My business address is:

[X] U.S. SECURITIES AND EXCHANGE COMMISSION, 5670 Wilshire



On November 12, 2010, I caused to be served the document entitled PLAINTIFF
SECURITIES AND EXCHANGE COMMISSION’S SUPPLEMENTAL SEPARATE
STATEMENT OF MATERIAL FACTS IN SUPPORT OF MOTION FOR PARTIAL
SUMMARY JUDGMENT AGAINST DEFENDANT MAYNARD L. JENKINS
on all the parties to this action addressed as stated on the attached service list:

[ ] OFFICE MAIL: By placing in sealed envelope(s), which I placed for collection

and mailing today following ordinary business practices. I am readily familiar
with this agency’s practice for collection and processing of correspondence for
mailing; such correspondence would be deposited with the U.S. Postal Service on
the same day in the ordinary course of business.
[ ]

PERSONAL DEPOSIT IN MAIL: By placing in sealed envelope(s),
which I personally deposited with the U.S. Postal Service. Each such
envelope was deposited with the U.S. Postal Service at Los Angeles,
California, with first class postage thereon fully prepaid.







[ ] EXPRESS U.S. MAIL: Each such envelope was deposited in a facility

regularly maintained at the U.S. Postal Service for receipt of Express Mail
at Los Angeles, California, with Express Mail postage paid.

office of the addressee as stated on the attached service list.


[ ] HAND DELIVERY: I caused to be hand delivered each such envelope to the

[ ] UNITED PARCEL SERVICE: By placing in sealed envelope(s) designated by
United Parcel Service (“UPS”) with delivery fees paid or provided for, which I
deposited in a facility regularly maintained by UPS or delivered to a UPS courier,
at Los Angeles, California.

electronic mail address as stated on the attached service list.


[ ] ELECTRONIC MAIL: By transmitting the document by electronic mail to the

[X] E-FILING: By causing the document to be electronically filed via the Court’s
CM/ECF system, which effects electronic service on counsel who are registered
with the CM/ECF system.
FAX: By transmitting the document by facsimile transmission. The transmission
was reported as complete and without error.
I declare under penalty of perjury that the foregoing is true and correct.


[ ]




Date: November 12, 2010









/s/ Donald W. Searles


Donald W. Searles





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Case 2:09-cv-01510-GMS Document 78 Filed 11/12/10 Page 6 of 6

United States District Court - District of Arizona

SEC v. Maynard L. Jenkins
Case No. 2:09-cv-01510-JWS

(LA-3305)

SERVICE LIST

John W. Spiegel, Esq. (served via CM/ECF only)
Jenny M. Jiang, Esq. (served via CM/ECF only)
Munger, Tolles & Olson LLP
355 South Grand Avenue, 35th Floor
Los Angeles, CA 90071-1560
Email: [email protected]
Email: [email protected]
Attorneys to Defendant Maynard L. Jenkins


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