The Securities and Exchange Commission recently brought an enforcement action against six former officers and directors of Fischer Imaging Corporation (Fischer), a designer, manufacturer and seller of medical imaging systems used for the diagnosis and screening of diseases. The SEC alleged that the officers and directors engaged in a fraudulent scheme to inflate reports of Fischer's profits by improperly recording income from sales transactions that were not complete. Contrary to Generally Accepted Accounting Principles, Fischer recognized income when equipment was shipped to Fischer-controlled warehouses, where the equipment was stored and insured by Fischer for significant periods of time before purchasers were ready to accept delivery (“ship in place sales”).