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U.S. Securities and Exchange Commission

Before the

Release No. 7755 / October 19, 1999

Release No. 42031 / October 19, 1999

Release No. 1192 / October 19, 1999

File No. 3-10079

   In the Matter of           : ORDER INSTITUTING PUBLIC 
                              : PROCEEDINGS AND OPINION 
   David E. Stevenson,        : AND ORDER PURSUANT TO RULE
                              : 102(e) OF THE COMMISSION'S 
      Respondent.             : RULES OF PRACTICE


The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest that public administrative proceedings be, and they hereby are, instituted pursuant to Rule 102(e)1 of the Commission's Rules of Practice against David E. Stevenson ("Stevenson"), a formerly licensed certified public accountant.


In anticipation of the institution of these administrative proceedings, Stevenson has submitted an Offer of Settlement of David E. Stevenson ("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 contained herein, except as to the jurisdiction of the Commission over him and over the subject matter of this proceeding, and the findings contained in Section III.C. below, which are admitted, Stevenson consents to the issuance of this Order Instituting Public Proceedings and Opinion and Order Pursuant to Rule 102(e) of the Commission's Rules of Practice ("Order") and to the entry of the findings and imposition of the remedial sanction set forth below.


The Commission makes the following findings:

A. Stevenson, age 49, of Saline, Michigan, is an accountant and was the president, CEO and chairman of the board of directors of Photran Corporation ("Photran") from May 3, 1991 until his resignation on March 19, 1997. Stevenson was formerly licensed as a certified public accountant by the State of Michigan.

B. Photran is a Minnesota corporation located in Lakeville, Minnesota. Photran's common stock was registered with the Commission pursuant to Section 12(g) of the Securities Exchange Act of 1934 ("Exchange Act") in May 1996. Since that time, Photran was required to file reports with the Commission pursuant to Section 13(a) of the Exchange Act. On April 15, 1999, Photran ceased all operations. It filed for Chapter 7 bankruptcy protection on May 3, 1999.

C. On September 27, 1999, the Commission filed a complaint against Stevenson and another in Securities and Exchange Commission v. David E. Stevenson et al., ("SEC v. Stevenson"). On July 15, 1999, Stevenson consented to the entry in SEC v. Stevenson of a Final Judgment against him, without admitting or denying the allegations in the complaint, except as to personal and subject matter jurisdiction, which he admitted. The Final Judgment, entered on October 7, 1999, in the United States District Court for the District of Minnesota permanently enjoins Stevenson from violating Section 17(a) of the Securities Act of 1933 ("Securities Act"), and Sections 10(b) and 13(b)(5) of the Exchange Act and Rules 10b-5, 13b2-1 and 13b2-2 thereunder. The Final Judgment also prohibits Stevenson from acting as an officer or director of any public company for a period of three years from the date of the entry of the Final Judgment. Stevenson further consented to pay a $25,000 civil money penalty pursuant to Section 20(d) of the Securities Act and Section 21(d)(3) of the Exchange Act.

D. The Commission's complaint in SEC v. Stevenson alleges, among other things, that Stevenson caused Photran to file with the Commission and disseminate to the public reports that fraudulently overstated earnings and revenues. Stevenson created false sales and shipping documents which caused Photran to record fictitious and premature revenue on its own books and records. As a result of this conduct, Photran reported profits for the year ended 1995 and the first three quarters of 1996 when, in fact, it suffered losses during each of those periods.

According to the complaint, Photran filed the following materially false and misleading reports with the Commission: its registration statement filed in May 1996 and its first two periodic reports for the second and third quarters of 1996. Stevenson signed each of these reports when he knew or was reckless in not knowing that they were materially false and misleading. The complaint also alleges that Stevenson provided falsified documents to Photran's independent auditors and made materially false and misleading statements to them.

E. By reason of the conduct set forth in the Order and the Commission's complaint, the Commission finds that Stevenson was permanently enjoined from further violations of certain provisions of the federal securities laws.


Based on the foregoing, the Commission deems it appropriate and in the public interest to accept the Offer submitted by Stevenson. Accordingly,

It is hereby ordered, effective immediately, that Stevenson is denied the privilege of appearing or practicing before the Commission as an accountant.

By the Commission.
Jonathan G. Katz


1 Paragraph (3) of Rule 102(e) provides, in relevant part, that:

... (i) The Commission, with due regard to the public interest...may...suspend from appearing or practicing before it any...accountant...who has been by name...permanently enjoined by any court of competent jurisdiction, by reason of his or her misconduct in an action brought by the Commission, from violating or aiding and abetting the violation of any provision of the Federal securities laws or the rules and regulations thereunder.