UNITED STATES SECURITIES AND EXCHANGE COMMISSION
LITIGATION RELEASE NO. 17622 / July 17, 2002
Misc. Action No. 4-02-MC-008-Y, USDC, NDTX (Fort Worth Division)
U.S. DISTRICT COURT ISSUES ORDER REQUIRING COMPLIANCE
IN SEC SUBPONEA ENFORCEMENT ACTION
On July 11, 2002, the U.S. District Court for the Northern District of
Texas granted the SEC's application for enforcement of an
investigative subpoena against Richard S. Berger, the former Chief
Financial Officer for Piranha, Inc. In its order, the Court denied
motions brought by Berger, including one to prohibit the SEC from
bringing an enforcement action against Berger for 60 days and another
to force the SEC to "cooperate" with Berger. The Court ordered Berger
to produce all responsive documents on or before July 21, 2002.
In finding that the subpoena was enforceable as written, the Court
held that Berger failed to demonstrate that the SEC's subpoena was
issued in bad faith, or was overbroad in scope. The Court also held
that Berger did not have a "privacy interest" in his personal tax
returns and that Berger failed to show any circumstances that
warranted delaying the SEC's investigation.
The SEC filed its Motion for Immediate Order Directing Compliance with
Subponea Duces Tecum on April 24, 2002. The subpoena seeks documents
regarding, among other things, whether Berger, Piranha, or others
issued false and misleading press releases, overstated the value of
assets in its SEC filings, understated amortization expenses, and
failed to disclose over $600,000 in unauthorized payments to Berger.
The SEC's motion alleges that the subpoenaed documents are needed to
determine if Berger, Piranha, or others have violated or are about to
violate provisions of the federal securities laws.
Piranha is a Richardson, Texas, development stage company in the
business of data-compression and other computer and Internet related
technology. Piranha's common stock is registered with the Commission
and is quoted on the OTC Bulletin Board (symbol BYTE), an electronic
quotation service operated by the National Association of Securities
Dealers. Besides being the former CFO, Berger is Piranha's largest
single shareholder and a member of its Board of Directors.
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Modified 07/18/2002
SNIPPETS:
U.S. DISTRICT COURT ISSUES ORDER REQUIRING COMPLIANCE
IN SEC SUBPONEA ENFORCEMENT ACTION
On July 11, 2002, the U.S. District Court for the Northern District of Texas granted the
In its order, the Court denied motions brought by Berger, including one to prohibit the SEC
In finding that the subpoena was enforceable as written, the Court held that Berger failed to
The SEC filed its Motion for Immediate Order Directing Compliance with Subponea Duces Tecum
The subpoena seeks documents regarding, among other things, whether Berger, Piranha, or
The SEC's motion alleges that the subpoenaed documents are needed to determine if Berger,
Piranha is a Richardson, Texas, development stage company in the business of data-compression
Piranha's common stock is registered with the Commission and is quoted on the OTC Bulletin
Besides being the former CFO, Berger is Piranha's largest single shareholder and a member of
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