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Kahn Swick & Foti, LLC and Former Louisiana Attorney General Announce Investigation Into Cartera?s, Inc. After Former Executive

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  Published in House and Home on Monday, December 20th 2010 at 21:01 GMT by Market Wire
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NEW ORLEANS--([ BUSINESS WIRE ])--Kahn Swick & Foti, LLC (aKSFa) and Former Attorney General of Louisiana, Charles C. Foti, Jr. announce the commencement of an investigation into Cartera™s, Inc. ("Cartera™s" or the "Company") (NYSE: CRI) after the SEC announced that it is charging a former executive of the kids' clothing marketer with fraud and insider trading, saying he lied about the company's financial picture and sold shares when their price was artificially high.

"The Securities and Exchange Commission said Monday Joseph Elles understated the expenses and overstated the net income of Carter's Inc., based in Atlanta. It said Elles gave massive discounts to department store Kohl's Corp., Carters' largest customer. Elles convinced Kohl's to postpone accounting for the mark-downs, the SEC said."

According to a report by the AP today:

aThe Securities and Exchange Commission said Monday Joseph Elles understated the expenses and overstated the net income of Carter's Inc., based in Atlanta. It said Elles gave massive discounts to department store Kohl's Corp., Carters' largest customer. Elles convinced Kohl's to postpone accounting for the mark-downs, the SEC said.

As a result, Carters' quarterly financial reports did not reflect the cost of the discounts. The lost revenue appeared to be profit. Expenses appeared to be lower than they actually were.

The fraud caused Carters' stock price to rise artificially. Elles made $4.7 million between 2004 and 2009 by selling shares that were part of his compensation package, the SEC said. The share price dropped by 24 percent when the fraud was revealed.

While Cartera™s cooperated with the SEC and was not charged, KSFa™s investigation will focus on the companya™s internal controls and procedures and the Boarda™s role in permitting this conduct to occur. If you have information that would assist KSF in its investigation, or would like to discuss your legal rights, you may, without obligation or cost to you, e-mail or call KSF Managing Partner, Lewis Kahn ([ lewis.kahn@ksfcounsel.com ]), toll free 1-877-515-1850, after hours via cell phone 504-301-7900, or KSF Director of Client Relations, Neil Rothstein, Esq. ([ neil.rothstein@ksfcounsel.com ]), toll free at 877-694-9510, or after hours via cell phone 330-860-4092.

About Kahn Swick & Foti, LLC

KSF, whose partners include the Former Louisiana Attorney General Charles C. Foti, Jr., is a law firm focused on securities class action and shareholder derivative litigation with offices in New York and Louisiana. KSF's lawyers have significant experience litigating complex securities class actions nationwide on behalf of both institutional and individual shareholders. Recent cases include In re Virgin Mobile USA IPO Litigation,2:07-cv-05619-SDW-MCA (D. N.J.), Co-Lead Counsel, $19.5 million settlement; In re BigBand Networks, Inc Securities Litigation,3:07-CV-05101-SBA (C.D. Cal.),Co-Lead Counsel, $11 million settlement; In re U.S. Auto Parts Networks, Inc. Securities Litigation,2:07-cv-02030-GW-JC (C.D. Cal.),Lead Counsel, $10 million settlement. KSF is also federally court-appointed Co-Lead Counsel in THE shareholder derivative cases against AIG and Bank of America (Merrill Lynch merger) emanating from their recent multi-billion dollar economic declines.

To learn more about KSF, you may visit[ www.ksfcounsel.com ].