UNITED STATES OF AMERICA
before the
SECURITIES AND EXCHANGE COMMISSION
SECURITIES EXCHANGE ACT OF 1934
Release No. 47405 / February 26, 2003
ACCOUNTING AND AUDITING ENFORCEMENT
Release No. 1722 / February 26, 2003
ADMINISTRATIVE PROCEEDING
File No. 3-11047
_________________________________________________________________
In the Matter of
Enterasys Networks, Inc. and Aprisma Management Technologies, Inc.
Respondents.
_________________________________________________________________
ORDER INSTITUTING PUBLIC PROCEEDINGS PURSUANT TO SECTION 21C OF THE
SECURITIES EXCHANGE IMPOSING A CEASE-AND-DESIST ORDER AGAINST
ENTERASYS NETWORKS, INC. AND APRISMA MANAGEMENT TECHNOLOGIES, INC.
I.
The Securities and Exchange Commission ("Commission") deems it
appropriate that public cease-and-desist proceedings be, and hereby
are, instituted pursuant to Section 21C of the Securities Exchange Act
of 1934 ("Exchange Act") against Enterasys Networks, Inc. (together
with its predecessor, Cabletron Systems, Inc., "Enterasys") and
Aprisma Management Technologies, Inc. ("Aprisma") (collectively
"Respondents").
II.
In anticipation of the institution of these proceedings, Respondents
have submitted an Offer of Settlement (the "Offer") which the
Commission has determined to accept. Solely for the purpose of these
proceedings and any other proceedings brought by or on behalf of the
Commission, or to which the Commission is a party, and without
admitting or denying the findings herein, except as to the
Commission's jurisdiction over them and the subject matter of these
proceedings, which are admitted, Respondents consent to the entry of
this Order Instituting Public Proceedings Pursuant to Section 21C of
the Securities Exchange Act of 1934, Making Findings, and Imposing a
Cease-And-Desist Order against Enterasys and Aprisma ("Order"), as set
SNIPPETS:
SECURITIES AND EXCHANGE COMMISSION
Enterasys Networks, Inc. and Aprisma Management Technologies, Inc.
ORDER INSTITUTING PUBLIC PROCEEDINGS PURSUANT TO SECTION 21C OF THE SECURITIES EXCHANGE
The Securities and Exchange Commission deems it appropriate that public cease-and-desist
In anticipation of the institution of these proceedings, Respondents have submitted an Offer
Enterasys filed periodic reports with the Commission containing consolidated financial
From March 2000 through December 2001, Enterasys and Aprisma engaged in improper accounting
During the relevant period, Enterasys and Aprisma entered into sales transactions in which
Although it was improper under GAAP to recognize revenue for sales that were subject to
During the relevant period, Enterasys and Aprisma entered into several transactions in which
Although several of these investment transactions lacked economic substance, Enterasys and
As a result of the improper accounting practices described above, Enterasys also committed
As a result of the improper accounting practices described above, Aprisma knew, or was
By engaging in the foregoing accounting practices, Enterasys knew, or was reckless in not
easonable detail, accurately and fairly reflected the company's transactions and dispositions of
In determining to accept the Offer, the Commission considered remedial acts promptly
To be interviewed, and to make their officers, directors, employees, agents and other
In determining whether to accept the Offer, the Commission has considered these undertakings.
Pursuant to Section 21C of the Exchange Act, Respondent Enterasys shall cease and desist from
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