certain members of CUC's senior management implemented a scheme designed to ensure that CUC always met the financial results anticipated by Wall Street analysts

Approx. 1985

pretax operating income reported to the public by CUC was inflated by an aggregate amount of over $500 million

1995 - 1997

The commission alleged that Forbes orchestrated an earnings management scheme at CUC to improperly inflate the company's quarterly and annual financial results during the period 1995 to 1997

1995 - 1997

Hiznay approved a series of entries reversing the commissions payable liability account into revenue at CUC

Approx. 1997

fiscal year-end, senior management utilized this liability account by directing post-closing entries moving amounts from the liability directly into revenue

January 31, 1997

January 31, 1997, fiscal year-end, the balance in the CUC membership cancellation reserve was $29 million; CUC accounting personnel were holding $100 million in rejects and $22 million in cancellation

January 31, 1997

Hiznay received a schedule from the CUC controller setting forth the amounts, effective back-dates, and accounts for a series of postclosing entries reducing the commissions payable account by $9.12

February 1997

Cendant had plans, which it did not disclose to defendants and EY, to use a material amount of the reserve to artificially inflate income in subsequent periods

December 1997

Cendant Corporation was created through the merger of HFS and CUC

December 17, 1997

CUC and Cendant filed false and misleading annual reports with the commission that misrepresented their financial results, overstating operating income and earnings and failing to disclose that the fi


senior Cendant management had discussed plans to fraudulently use over $100 million of the Cendant reserve to create fictitious 1998 income, which was also concealed from the defendants and EY

March 1998

• At the time of the merger, Shelton became a Cendant director and vice chair. Shelton resigned from Cendant

April 1998

• After the Cendant merger, Forbes served as Cendant's board chair until his resignation

July 1998

BR&B announced on behalf of the lead plaintiffs the landmark $2.85 billion settlement with Cendant that far surpassed the recoveries in any other securities law class action case in history

December 1999


2000 - 2007

SEC complaints filed • alleged violations of the federal securities laws by four former accounting officials including Cosmo Corigliano, CFO of CUC; Anne M. Pember, CUC controller; Casper Sabatino, v

June 14, 2000

the SEC filed a civil enforcement action in the U.S. District Court for the District of New Jersey against Walter A. Forbes, the former chair of the board of directors at CUC, and E. Kirk Shelton, the

February 28, 2001

U.S. Supreme Court determined that it would not hear any further appeals in the case.

March 2002

SEC announced a final judgment against Walter A. Forbes, the former chair of Cendant, arising out of his conduct in the Cendant fraud

December 29, 2009