False Profits

Crackdown on cooked books

When U.S. Surgical Corp. of Norwalk, Conn., piled up pretax profits of $32.9 million between 1979 and 1981, its top officers gave themselves rich rewards. The bosses enjoyed their bounty until earlier this year, when the Securities and Exchange Commission ordered the bonuses paid back. President Leon C. Hirsch, for one, agreed to relinquish $317,000. A probe of U.S. Surgical's books, the SEC claimed, had discovered that the company padded its 1979-81 profits by more than $18 million.

Rooting out financial-disclosure fraud has become the top priority of SEC Chairman...

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