UNITED STATES OF AMERICA
before the
SECURITIES AND EXCHANGE COMMISSION
SECURITIES EXCHANGE ACT OF 1934
Release No. 48485 / September 11, 2003
ACCOUNTING AND AUDITING ENFORCEMENT
Release No. 1861 / September 11, 2003
ADMINISTRATIVE PROCEEDING
File No. 3-11257
_________________________________________________________________
In the Matter of
STEPHEN D. PRICE,
Respondent
_________________________________________________________________
ORDER INSTITUTING PROCEEDINGS PURSUANT TO SECTION 21C OF THESECURITIES
EXCHANGE ACT OF 1934,MAKING FINDINGS AND IMPOSING A CEASE-AND-DESIST
ORDER
I.
The Securities and Exchange Commission ("Commission") deems it
appropriate that public administrative proceedings be, and hereby are,
instituted pursuant to Section 21C of the Securities Exchange Act of
1934 ("Exchange Act") against Stephen D. Price ("Price" or
"Respondent").
II.
In anticipation of the institution of these proceedings, Respondent
has submitted an Offer of Settlement ("Offer"), which the Commission
has determined to accept. Solely for the purposes of these proceedings
and any other proceedings brought by or on behalf of the Commission or
in which the Commission is a party, and without admitting or denying
the findings contained herein, except as to the Commission's
jurisdiction over him and the subject matter of these proceedings,
which are admitted, Respondent consents to the entry of this Order
Instituting Proceedings Pursuant to Section 21C of the Securities
Exchange Act of 1934, Making Findings and Imposing a Cease-and-Desist
Order ("Order").
SNIPPETS:
SECURITIES AND EXCHANGE COMMISSION
ORDER INSTITUTING PROCEEDINGS PURSUANT TO SECTION 21C OF THESECURITIES EXCHANGE ACT OF
The Securities and Exchange Commission deems it appropriate that public administrative
In anticipation of the institution of these proceedings, Respondent has submitted an Offer of
Between 1999 and 2001, Price was the Vice President of Business Development for CAIS
Price worked closely with CAIS's senior management to identify possible acquisition
CAIS was, during the relevant time, a Delaware corporation with its principal place of
This matter involves improper conduct by Price in causing CAIS to materially overstate its
On September 29, 2000, Price arranged a $1,012,500 sale of merchandise to Logic, which
In connection with this sale, Price entered into an oral side agreement with Logic, which
Because of Logic's right of return, CAIS should not have recorded the revenue in the third
Price's failure to inform CAIS's senior management and internal accountants about the side
As a result, Price violated Sections 10and 13of the Exchange Act and Rules 10b-5, 13b2-1 and
CAIS was a provider of high-speed Internet network services and a manufacturer of stand-alone
The e-mail also suggested that, if CAIS made the investment, Logic would purchase $1.5
Price also agreed that Logic could use the money from CAIS's investment to pay for the kiosks.
Although CAIS normally required customers to pay for merchandise within 30 days, Price
During October 2000, before CAIS filed its Form 10-Q with the Commission, CAIS's CFO heard a
Specifically, Statement of Financial Accounting Standards No. 48, precludes revenue
Here, Price's promised investment and acknowledgement that Logic could return the equipment
Violations of Section 10and Rule 10b-5 occur when an issuer makes material misstatements or
As a result of Price's knowing conduct, CAIS overstated its revenue, accounts receivable and
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