The U.S. Securities and Exchange Commission has settled a fraud case against a pair of Toronto residents.

The SEC announced today that it has settled its civil injunctive action against Birte Boock, the former CEO of Leah Industries Inc. and Irwin Boock, Leah’s former de facto control person. The Boocks are residents of Toronto.

The Boocks consented to the entry of final judgments permanently enjoining them from violating securities rules, imposing civil monetary penalties of $50,000 each, and ordering Irwin Boock to pay disgorgement of $379,619. (All figures in U.S. dollars.)

The commission filed its complaint on Sept. 28, 2000. In the complaint, it alleged that during 1998 and 1999, Leah and the Boocks made material misrepresentations to investors concerning Leah’s purported relationship with two Big Five accounting firms. Specifically, during an investor conference call on Aug. 20, 1998, Birte Boock misrepresented that Leah had retained Coopers & Lybrand (now PricewaterhouseCoopers) to serve as its auditor when, in fact, Coopers & Lybrand never agreed to serve as Leah’s auditor.

The complaint also alleged that Birte and Irwin Boock directed Leah to issue a press release on Dec. 10, 1998 representing that Leah had retained Deloitte & Touche as its auditor, and to issue another press release on Dec. 23, 1998 representing that Deloitte & Touche concurred with Leah’s decision to report earnings for the nine-months ended September 30, 1998 of $28.5 million before special charges of $27 million.

The complaint alleged that the press releases were false because Leah never retained Deloitte & Touche to serve as its auditor, and Deloitte & Touche never concurred with Leah’s financial reporting decisions. Finally, the complaint alleged that while Leah and the Boocks were making material misrepresentations, Irwin Boock sold a substantial amount of Leah stock.

The commission also announced that it previously obtained a default judgment against Leah, which permanently enjoined Leah from violating its rules, and ordering Leah to pay disgorgement of $41,526. The Boocks consented to the entry of an order finding that they participated in a penny stock offering of Leah stock, and barring the Boocks from participating in any offering of a penny stock.