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U.S. Securities and Exchange Commission

UNITED STATES OF AMERICA
before the
SECURITIES AND EXCHANGE COMMISSION

SECURITIES EXCHANGE ACT OF 1934
Release No. 43359 / September 27, 2000

ACCOUNTING AND AUDITING ENFORCEMENT
Release No 1315 / September 27, 2000

ADMINISTRATIVE PROCEEDING
File No. 3-10313

SEC CHARGES SEATTLE SOFTWARE FIRM WITH FRAUD, FILES RULE 102(e) PROCEEDINGS AGAINST AUDITOR.

The Commission announced today that it has instituted cease-and-desist proceedings against YourBankOnline.com, of Mountlake Terrace, Washington ("YourBankOnline" or the "Company"), and its president, Pakie Plastino. The Commission also instituted administrative proceedings under Rule 102(e) against YourBankOnline's outside auditor, William L. Butcher, of Everett, Washington.

The Division of Enforcement alleges that in a March 1999 press release, YourBankOnline - then known as Consolidated Data, Inc. - claimed to have purchased the rights to an Internet banking software program for $10 million in cash and stock. This press release, which was followed by additional Company statements touting the software program, caused YourBankOnline's stock price to jump from less than $1 to $32 over a two-week period.

The Division of Enforcement alleges that the March 1999 press release greatly overstated the value of the software and misrepresented YourBankOnline's financial strength. YourBankOnline, which had less than $200 in cash at the time, had no ability to make any substantial cash payments to acquire the software. In addition, the Company stock that YourBankOnline exchanged for the software was worth far less than $10 million. Moreover, the $10 million value was unreasonable in light of the fact that the same software had been purchased for approximately $400,000 in a separate transaction just a few months earlier.

The Division of Enforcement alleges that YourBankOnline also fraudulently inflated the value of the software in financial statements filed with the Commission in August 1999. Further, according to the Order, Butcher, the Company' outside auditor, engaged in improper professional conduct in his audit of those financial statements. Butcher failed to take reasonable steps to determine the true value of the software, despite the fact that it was essentially the Company's only asset. Butcher failed to follow applicable auditing standards and falsely represented that the Company's financial statements complied with generally accepted accounting principles.

A hearing will be scheduled before an administrative law judge to determine whether the allegations in the Order are true and, if so, what remedial actions or sanctions are appropriate.

http://www.sec.gov/litigation/admin/34-43359.htm


Modified:09/27/2000