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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
Litigation Release No. 15155 / November 12, 1996
Accounting and Auditing Enforcement
Release No. 854 / November 12, 1996
SECURITIES AND EXCHANGE COMMISSION v. KENDALL SQUARE RESEARCH
CORPORATION, HENRY BURKHARDT III, PETER APPLETON JONES, AND KARL
G. WASSMANN III, Civil Action No. 96-10869 (MLW) (D. Mass.)
The Securities and Exchange Commission announced today that
on October 31, 1996, the Honorable Mark L. Wolf, United States
District Judge, entered a Final Judgment against defendant Peter
Appleton Jones. The Final Judgment (i) permanently restrains and
enjoins Appleton Jones from violating the anti-fraud, books and
records, and internal accounting controls provisions of the
federal securities laws; (ii) bars Appleton Jones from acting as
an officer or director of any public company for a period of ten
years; and (iii) orders Appleton Jones to pay a total of
$321,526, representing disgorgement of losses avoided through his
sale of Kendall Square Research Corporation ("KSR") common stock
and prejudgment interest thereon, but waiving payment of all but
$40,000 of that amount based on Appleton Jones' demonstrated
inability to pay a greater amount. The Final Judgment
permanently restrains and enjoins Appleton Jones from violating
Section 17(a) of the Securities Act of 1933 and Sections 10(b)
and 13(b)(5) of the Securities Exchange Act of 1934 and Rules
10b-5, 13b2-1 and 13b2-2 thereunder. Appleton Jones consented to
the entry of the Final Judgment, without admitting or denying the
allegations contained in the Commission's Complaint.
Appleton Jones was the highest ranking sales executive of
KSR, a Massachusetts-based manufacturer of high performance
computer systems that was liquidated earlier this year in a
bankruptcy proceeding. The Complaint, filed on April 29, 1996,
alleged that Appleton Jones and the other defendants violated
the anti-fraud, periodic reporting, books and records, and
internal accounting controls provisions of the federal securities
laws. Appleton Jones and the other individual defendants were
alleged to have caused KSR to issue materially false and
misleading financial statements for fiscal year 1992 and the
first two quarters of 1993, which overstated the Company's
SNIPPETS:
Accounting and Auditing Enforcement
SECURITIES AND EXCHANGE COMMISSION v. KENDALL SQUARE RESEARCH
CORPORATION, HENRY BURKHARDT III, PETER APPLETON JONES, AND KARL
G. WASSMANN III, Civil Action No. 96-10869 (D.
The Securities and Exchange Commission announced today that on October 31, 1996, the
The Final Judgment permanently restrains and enjoins Appleton Jones from violating the
thereon, but waiving payment of all but $40,000 of that amount based on Appleton Jones'
The Final Judgment permanently restrains and enjoins Appleton Jones from violating Section
Appleton Jones consented to the entry of the Final Judgment, without admitting or denying the
Appleton Jones was the highest ranking sales executive of KSR, a Massachusetts-based
The Complaint, filed on April 29, 1996, alleged that Appleton Jones and the other defendants
Appleton Jones and the other individual defendants were alleged to have caused KSR to issue
the Complaint alleged that Appleton Jones sold KSR stock while in possession of material
The two other individual defendants named in the Complaint, Henry Burkhardt III, KSR's former
The Commission voluntarily dismissed its claims against KSR in light of the Company's
the Commission today instituted an administrative proceeding against Karl G. Wassmann III.
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