Inamed to Settle SEC Charges of Falsely Reported Earnings

Inamed Corp., a Santa Barbara-based maker of breast implants, agreed to settle federal allegations that it fraudulently reported its earnings in 1996 and 1997, regulators said Tuesday.

The Securities and Exchange Commission alleged that Inamed falsely reported numerous transactions in some annual and quarterly financial reports submitted to the agency during those years and issued misleading news releases.

Inamed neither admitted nor denied the allegations in agreeing to the settlement, which included no fines. It agreed to be subject to stiffer sanctions for any future violations.

Allegations of accounting fraud involved periods before new company management was brought in last year, said David Bamberger, Inamed’s general counsel. Inamed has restated its financial statements for the relevant periods, the company said.

“We’re pleased to have resolved the matter and since early 1998 have operated a company with the highest level of integrity and credibility, and we’ve acted hard to restore investor confidence,” Bamberger said.

Inamed, which manufactures breast implants and other plastic surgical devices, said the SEC began its investigation after Coopers & Lybrand resigned as Inamed’s auditors in March 1998.

Now that the SEC matter has been resolved, Inamed will seek to become listed on Nasdaq, Bamberger said. Its stock, which rose $1.88 to close at $23 on Tuesday, is quoted on the over-the-counter bulletin board.

The SEC alleged that some of Inamed’s accounting problems occurred in the context of attempts to satisfy Nasdaq listing requirements.