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1
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SEC LITIGATION RELEASE
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EXTRACTED KEY WORDS
CYBERGUARD SECURITIES EXCHANGE ACT ACCOUNTING JUDGEMENT COMMISSION LITIGATION PATRICK DISTRICT FLORIDA DEFENDANT EXECUTIVES OFFICER VICE PRESIDENT REVENUE INTERNAL CONTROLS MISLEADING AUDITORS PROVISIONS THEREUNDER PENALTY COMPLAINT CHARGED WHEELER ENGAGING IMPROPER REVENUE RECOGNITION REVENUE RECOGNITION PRACTICES CAUSED CYBERGUARD MATERIALLY OVERSTATE REPORTED REVENUES RELATED ADMINISTRATIVE PROCEEDING NOS |
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
Litigation Release No. 18078 / April 9, 2003
Accounting and Auditing Enforcement Release No. 1756 / April 9, 2003
, Case No. 02-60131-CIV-GRAHAM (S.D. Fla.)
SEC OBTAINS FINAL JUDGMENT AGAINST PATRICK O. WHEELER
IN CYBERGUARD ACCOUNTING CASE
On April 4, 2003, the United States District Court for the Southern
District of Florida entered a final judgment against Patrick O.
Wheeler, who was the last remaining defendant in the Commission's
accounting case against current and former executives of CyberGuard
Corporation, a network security company based in Fort Lauderdale,
Florida. Wheeler is CyberGuard's former chief financial officer and
vice president of North American sales, and its current vice president
of business development. Without admitting or denying the Commission's
allegations, Wheeler consented to the entry of the final judgment,
which permanently enjoins him from violating the books-and-records,
internal controls, and misleading auditors provisions of Section
13(b)(5) of the Securities Exchange Act of 1934 and Rules 13b2-1 and
13b2-2 thereunder, and requires him to pay a $20,000 penalty.
The Commission's complaint, which was filed on January 30, 2002 and
amended on November 15, 2002, charged Wheeler and two former
CyberGuard executives with, among other things, engaging in improper
revenue recognition practices that caused CyberGuard to materially
overstate its reported revenues during the company's 1997 fiscal year
and certain quarters of its 1998 fiscal year. Both of the other
defendants previously settled with the Commission. In addition,
CyberGuard and two other former officers of the company settled in a
related administrative proceeding. For further information, see
Litigation Rel. Nos. (Jan. 30, 2002) and (June 12, 2002), and Exchange
Act Release No. 45362 (January 30, 2002).
_________________________________________________________________
Modified 04/11/2003
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