The Securities and Exchange Commission yesterday accused Vornado Inc., a failing New Jersey discount store chain, of juggling its books over a period of nearly a decade, maintaining a secret cash fund for labor payoffs and giving its executives under-the-table perquisites.
Vornado executives received company-paid credit cards and chauffered limousines for themselves and company cars for their relatives during years when the company was slowly disintegrating, the SEC charged in a major enforcement case.
Vornado owns the Two Guys discount stores, one of the oldest in the business. Once a major rival of K mart Corp. with a chain of 150 stores from New York to California, Vornado recently decided to close 33 units and pare its retail empire to only 12 stores.
The company began falsely inflating its profits in 1971, the SEC charged, and over several years violated federal securities laws by making untrue statements that defrauded investors in Vornado shares, which are traded on the New York Stock Exchange.
Without admitting or denying the charges, Vornado consented to a permanent injunction against further violations of reporting regulations. The company also agreed to appoint an outsider approved by the SEC to its board of directors to assure that financial reports are accurate.