The decline in revenue led to a drop in commission expense, which dipped to $22.4 million for fiscal 2009, a decrease of 23.9 percent from $29.4 million a year ago. Gilman held the line on executive compensation, with president and CEO Michael Ryan's salary at $350,000 for both years and Ryan, the only officer to get a bonus, saw that drop to $92,922 for 2009 from $166,369 in 2008. Chairman James Ciocia, a registered representative for the company's Prime Capital Services subsidiary, pulled in $400,000 in commissions on his own business productions.

The tax preparation and accounting business, which grew with two acquisitions during the most recently ended year, reached $7.4 million for fiscal 2009, up 11.9 percent from $6.6 million

Meanwhile, the company recounted the issues it faces relative to a cease and desist order issued by the SEC on June 30. That order stemmed from the SEC's allegations that the company, the Prime Capital subsidiary, Ryan, Rose M. Rudden, Prime Capital's chief compliance officer and other current and former employees alleged engaged in fraudulent sales of variable annuities to senior citizens from Jan. 1, 2002 through Aug. 1, 2005. It also alleged that Ryan, Rudden and two representatives had failed to supervise variable annuity transactions. In December, the same officers, representatives entities received Wells Notices, which are notifications that the SEC staff is considering recommending that the SEC bring civil actions against the recipients to determine if they have committed violations of federal securities laws.

The company had ended suits regarding the annuity sales with its insurance company settling the claims, while Gilman has also accrued $344,000 for potential fines and disgorgement.

To meet its capital needs, the company raised the sale of $1,785,000 in notes bearing 10 percent interest and $100,000 in common stock. Ted Finkelstein, VP, general counsel and secretary, said the proceeds are being used for working capital. Gilman had a $3.4 million working capital deficit on June 30.

Bob Scott

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Bob Scott has provided information to the tax and accounting community since 1991, first as technology editor of Accounting Today, and from 1997 through 2009 as editor of its sister publication, Accounting Technology. He is known throughout the industry for his depth of knowledge and for his high journalistic standards.  Scott has made frequent appearances as a speaker, moderator and panelist and events serving tax and accounting professionals. He  has a strong background in computer journalism as an editor with two former trade publications, Computer+Software News and MIS Week and spent several years with weekly and daily newspapers in Morris County New Jersey prior to that.  A graduate of Indiana University with a degree in journalism, Bob is a native of Madison, Ind