Securities and Exchange Commission

Litigation Release No. 17634 / July 29, 2002

SEC Settles Financial Fraud Charges Against Eric C. Brown

SECURITIES AND EXCHANGE COMMISSION V. SCORPION TECHNOLOGIES, INC., ET AL.,
96-CIV-1005 (S.D.N.Y.)

   New York --  The Securities and Exchange Commission announced that on
   June 21, 2002, the Honorable Barbara S. Jones, United States District
   Judge for the Southern District of New York, entered a Final Judgment
   of Disgorgement by Consent against Eric C. Brown ("Brown") of Morgan
   Hill, California, which provided that the Commission's claim for
   disgorgement against Brown is satisfied by the $25.2 million in
   restitution ordered in a related criminal proceeding, United States v.
   Eric Brown, CR 96-251-SI (N.D. Cal.).

   Previously, the Court entered a Partial Judgment of Permanent
   Injunction and Other Equitable Relief by Consent against Brown which
   enjoined him from future violations of Section 10(b) of the Securities
   Exchange Act of 1934 and Rule 10b-5 thereunder, and Rule 13b2-2
   promulgated under Section 13(b) of the Exchange Act. Brown was also
   barred from serving as an officer or director of a public corporation.
   In the related criminal proceeding, Brown pled guilty to one count of
   conspiracy to file false reports with the Commission, and sentenced to
   serve a term of probation and community service and to pay $25.2
   million in restitution.

   The Commission's Amended Complaint, filed on May 9, 1996, alleged that
   Brown and others engaged in a scheme to inflate the revenues, assets,
   and earnings reported in the public filings of Scorpion Technologies,
   Inc., a publicly traded company that maintained its offices in Los
   Gatos, California. Between 1991 and 1993, Brown falsified Scorpion's
   books and records, prepared or directed the preparation of fictitious
   purchase orders, invoices, payment documentation, confirmations, and
   product return documentation, and provided false and misleading
   information and documents to Scorpion's independent auditors.

   See also (February 9, 1996)

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Modified 07/29/2002