Friedman's former chief executive convicted of fraud

Bradley Stinn, the former chief executive of jewellery chain Friedman's Inc., has been convicted by federal jury in New York on charges of securities fraud, mail fraud and conspiracy. Stinn has been accused of duping investors, by misinforming them about company finances and hiding the information that from the $400 million sales during fiscal years 2001 and 2002, 50% was on credit which Friedman could not collect.

During those years Friedman operated 686 stores in 20 states and was the third-largest fine jewellery retailer in the US. Apart from his negligence towards investors, Stinn also falsely reported the earnings in filings with the US Securities and Exchange Commission and to analysts. He also allegedly directed company executives to understate the firm’s reliance on customers with poor or non-existent credit.

According to the law, if Stinn is convicted of conspiracy to commit securities fraud, wire fraud and mail fraud, he is mandated to face 30 years imprisonment. As for the company, Friedman has filed for Chapter 11 bankruptcy protection on January 25.