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U.S. Securities and Exchange Commission

Before the

Release No. 43326 / September 22, 2000

Release No. 1306 / September 22, 2000

File No. 3-10296

In the Matter of





The Securities and Exchange Commission ("Commission") deems it appropriate that a public administrative proceeding be instituted against Rudy Wann ("Wann") pursuant to Rule 102(e)/ of the Commission's Rules of Practice.

Accordingly, IT IS HEREBY ORDERED that said proceeding be, and hereby is, instituted.


In anticipation of the institution of this public administrative proceeding, Wann has submitted an Offer of Settlement ("Offer"), which the Commission has determined to accept. Solely for the purpose of this proceeding 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 in this Order, except that Wann admits the jurisdiction of the Commission over him and over the subject matter of this proceeding and the entry of a Final Judgment of Permanent Injunction and Other Relief against him as set forth in paragraph III.D., Wann consents to the entry of this Order Instituting Public Administrative Proceeding Pursuant to Rule 102(e) of the Commission's Rules of Practice, Making Findings and Imposing Remedial Sanction ("Order") as set forth below.


On the basis of this Order and the Offer, the Commission finds that:

A. Wann, age 42, was the Chief Financial Officer for IDB Communications Group, Inc. during the relevant period. Previously, Wann was licensed as a certified public accountant by the State of California from December 1981 to February 1991. Both Wann's license as a certified public accountant and his certification were canceled on or about February 1996 by the State of California. Wann's license and certificate were canceled when the Board notified Wann they would be canceled based upon his failure to pay his renewal fees since 1991 and Wann instead elected to notify the Board of his intention to retire.

B. IDB Communications Group, Inc. ("IDB") is a telecommunications company that during the relevant period was based in the Los Angeles, California area. Until IDB was acquired in 1995, its common stock was registered with the Commission under Section 12(g) of the Securities Exchange Act of 1934 ("Exchange Act") and traded on the over-the-counter market through NASDAQ.

C. On September 30, 1997, the Commission filed a Complaint in the United States District Court for the Central District of California alleging that three IDB officers, including Wann, had engaged in a scheme to fraudulently inflate IDB's 1994 first quarter earnings from $9 million to $15 million. Securities and Exchange Commission v. Jeffrey P. Sudikoff, Edward Cheramy and Rudy Wann, Civil Action No. 97-7207 DDP (RCx) (C.D. Cal.). The Complaint further alleged that Wann, among other things, made false statements to securities analysts and IDB's auditors, made false adjusting entries on IDB's books in circumvention of IDB's internal controls in order to inflate IDB's earnings, and publicly disseminated IDB's inflated earnings through an IDB press release and IDB Form 10-Q and Form 8-K filings with the Commission.

D. On August 21, 2000, the United States District Court for the Central District of California entered a Final Judgment Of Permanent Injunction And Other Relief Against Defendant Rudy Wann ("Judgment"), which: (1) permanently enjoins Wann from future violations of Sections 10(b), 13(a) and 13(b)(5) of the Exchange Act and Rules 10b-5, 12b-20, 13a-11, 13a-13, 13b2-1 and 13b2-2 thereunder; and(2) orders Wann to pay a $50,000 civil penalty to the U.S. Treasury under Section 21(d)(3) of the Exchange Act. Wann consented to the entry of the Judgment without admitting or denying any of the allegations in the Complaint.


Based on the foregoing, the Commission deems it appropriate to accept the Offer submitted by Wann and to impose the remedial sanction specified in the Offer.

Therefore, IT IS HEREBY ORDERED, effective immediately, that:

  1. Wann is denied the privilege of appearing or practicing before the Commission as an accountant.

  2. After five years from the date this Order, Wann may request that the Commission consider his reinstatement by submitting an application (attention: Office of the Chief Accountant) to resume appearing or practicing before the Commission as:

    1. a preparer or reviewer, or a person responsible for the preparation or review, of any public company's financial statements that are filed with the Commission. Such an application must satisfy the Commission that Wann's work in his practice before the Commission will be reviewed either by the independent audit committee of the public company for which he works or in some other acceptable manner, as long as he practices before the Commission in this capacity; and/or

    2. an independent accountant. Such an application must satisfy the Commission that:

      1. Wann, or the firm with which he is associated, is a member of the SEC Practice Section of the American Institute of Certified Public Accountants Division for CPA Firms ("SEC Practice Section");

      2. Wann, or the firm, has received an unqualified report relating to his, or the firm's, most recent peer review conducted in accordance with the guidelines adopted by the SEC Practice Section; and

      3. As long as Wann appears or practices before the Commission as an independent accountant, he will remain either a member of the SEC Practice Section or associated with a member firm of the SEC Practice Section, and will comply with all applicable SEC Practice Section requirements, including all requirements for periodic peer reviews, concurring partner reviews, and continuing professional education.

  3. The Commission's review of an application by Wann to resume appearing or practicing before the Commission may include consideration of, in addition to matters referenced above, any other matters relating to Wann's character, integrity, professional conduct, or qualifications to appear or practice before the Commission.

By the Commission.

Jonathan G. Katz