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United States Securities and Exchange Commission v. Conaway

The Case: Early in 2002, KMart, then the 3rd largest retailer in the US, declared bankruptcy. Subsequent investigation revealed attempts by management to compensate for and conceal KMart’s lack of liquidity. SEC sued Conaway for violation of disclosure laws.

The Challenge: Insight Design was retained by the SEC to provide demonstrative evidence for trial. Working with SEC counsel, we determined that it was critical to illustrate the impact of KMart’s unilateral imposition of delayed payment terms on both the appearance and reality of their liquidity.

The Solution: Insight Design developed a series of graphics that explained and illustrated:

  • the law pertaining to the disclosure of liquidity
  • the specific meaning of liquidity
  • KMart’s liquidity in 2000 and 2001
  • the effects of computer program changes to liquidity
  • KMart’s public statements about their liquidity
  • the programs that management used to conceal the problem from vendors, the board of directors, employees, investors, and the public.

The Outcome: The jury found for the SEC on all counts.

Graphic Solutions (click to enlarge)Case 1 slide 1Case 2 slide 2Case 1 slide 3