KOSS CORPORATION , CEO AND CFO AGREE TO KEEP BETTER BOOKS IN SETTLEMENT

The following excerpt is from the SEC website:
March 9, 2012
“On February 22, 2012, the Honorable Rudolph T. Randa, U.S. District Judge for the Eastern District of Wisconsin, approved the settlement of the Securities and Exchange Commission’s Complaint against Koss Corporation (“Koss”), located in Milwaukee, Wisconsin, and Michael J. Koss, its CEO and former CFO. The case is based on Koss Corporation’s preparation of materially inaccurate financial statements, book and records, and lack of adequate internal controls from fiscal years 2005 through 2009. The S.E.C. responded to a letter dated December 20, 2011, in which the District Judge Randa requested that the S.E.C. address concerns about the proposed settlement. Based on the S.E.C.’s response, District Judge Randa stated the Court was “satisfied that the injunctions are sufficiently specific… [and] that the proposed final judgments are fair, reasonable, adequate, and in the public interest.” The Injunctive Orders:

(1) Enjoin Koss from violating and Michael J. Koss from aiding and abetting violations of the reporting, books and records and internal controls provisions (Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Securities Exchange Act of 1934 and Rules 12b-20, 13a-1, 13a-11 and 13a-13) of the federal securities laws and Michael J. Koss from violating the certification provision (Section 13a-14 of the Exchange Act) and

(2) Order Michael J. Koss to reimburse Koss $242,419 in cash and 160,000 of options pursuant to Section 304 of the Sarbanes-Oxley Act. This bonus reimbursement, together with his previous voluntary reimbursement of $208,895 in bonuses to Koss Corporation represents his entire fiscal year 2008, 2009 and 2010 incentive bonuses.

The Commission acknowledges the assistance of the U.S. Attorney’s Office for the Eastern District of Wisconsin, the Federal Bureau of Investigation and the Public Company Accounting Oversight Board. The Commission considered the cooperation of Koss Corporation and Michael J. Koss in determining to accept their settlement.”