Inamed’s Ex-Head Fined in SEC Case

Inamed Corp.’s former chairman, Donald McGhan, agreed to pay a $50,000 fine to settle charges that the breast-implant maker inflated earnings in 1996 and 1997.

McGhan neither admitted nor denied the Securities and Exchange Commission’s civil fraud allegations.

The SEC alleged that McGhan, 65, while chairman and chief executive of the Santa Barbara-based company, “either knew or was reckless in not knowing” of the false financial reports. He resigned as chairman in February 1998.

Inamed failed to record a $1.4-million interest expense, improperly reduced the allowance for product returns and overstated inventory, the SEC contended. As a result, the company reported a $7.1-million net loss in 1996 when it actually lost $11.4 million, the agency said.

The company itself settled SEC charges last August.