The Securities and Exchange Commission is suing the former executives of National Century Financial Enterprises for allegedly defrauding investors who bought shares of the company's securities prior to its collapse back in 2002, the Associated Press reports.

SEC has filed charges against Lance Poulsen, former CEO;, Donald S. Ayers, former COO; Rebecca S. Parrett, former director of accounts receivable; and Randolph Speer, former CFO.

The company collapsed in 2002 when investors found out that the firm was hiding financial shortfalls, therefore intentionally misrepresenting financial information.

"Investors in private offerings, just like investors in public companies, must be able to rely on the truthfulness of the information they receive before investing," SEC Enforcement Director Linda Thomsen said. "We continue to actively pursue those who provide false information to investors in both private and public securities."

According to the SEC, even though the units through which National Century put out the securities were expected to maintain reserves and accounts receivable balances as security, the executives washed-out the reserve account. They advanced approximately $1.2 billion to health-care providers, with no collateral.

"We are seriously looking forward to defending against this action," said Brian Dickerson, Ayers' attorney. Dickerson claims that the timing for filing these charges was an intentional "maneuver to ruin his holiday, especially given how long they have been investigating this."  

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