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U.S. Securities and Exchange Commission

Before the

Release No. 46172 / July 9, 2002

Release No. 1588 / July 9, 2002

File No. 3-10823

In the Matter of






The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest that public administrative proceedings be, and they hereby are, instituted against Thomas F. Wraback ("Respondent" or "Wraback") pursuant to Rule 102(e)(3) of the Commission's Rules of Practice.1


In anticipation of the institution of these public administrative proceedings, Respondent has submitted an Offer of Settlement ("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 that Respondent admits the jurisdiction of the Commission over him and the subject matter of these proceedings, and that a Final Judgment as to Defendant Thomas F. Wraback ("Final Judgment") has been entered against him as set forth in Section III.C., Respondent consents to the entry of this Order Instituting Public Administrative Proceedings Pursuant to Rule 102(e) of the Commission's Rules of Practice, Making Findings, and Imposing Remedial Sanctions ("Order").


On the basis of this Order and Respondent's Offer, the Commission finds that:2

  1. Wraback, age 41, served as Chief Financial Officer and Senior Vice President of Physician Computer Network, Inc ("PCN") from 1996 until his termination in August 1998. Wraback is, and at all relevant times was, a Certified Public Accountant licensed by the state of New Jersey.

  2. PCN was, at all relevant times, a New Jersey corporation with its principal executive offices located in Morris Plains, New Jersey. PCN was engaged in the business of developing and distributing practice management and clinical data software for physician practice groups. At all relevant times, PCN's common stock was registered with the Commission pursuant to Section 12(g) of the Securities Exchange Act of 1934 ("Exchange Act"), and traded on the NASDAQ National Market. PCN's stock was suspended from trading in April 1998 and delisted in May 1998. In March 2000, PCN's assets were acquired in accordance with a plan of reorganization filed by PCN in Chapter 11 bankruptcy proceedings. PCN no longer operates as a public company.

  3. On June 5, 2002, the Commission filed a Complaint against Wraback in Securities and Exchange Commission v. John F. Mortell, et al. ("SEC v. Mortell") (Civil Action No. 1:02CV01090). On June 5, 2002, Wraback consented to the entry of the Final Judgment against him in SEC v. Mortell, without admitting or denying the allegations of the Complaint, except as to subject matter jurisdiction, which Wraback admitted. On June 24, 2002, the United States District Court for the District of Columbia entered the Final Judgment which: (i) permanently enjoined Wraback from, directly or indirectly, violating Sections 10(b) and 13(b)(5) of the Exchange Act and Rules 10b-5, 13b2-1 and 13b2-2 thereunder, and aiding and abetting violations of Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Rules 12b-20, 13a-1 and 13a-13 thereunder; (ii) ordered Wraback to pay a $60,000 civil penalty pursuant to Section 21(d)(3) of the Exchange Act; and (iii) prohibited Wraback, for a period of ten (10) years, from acting as an officer or director of any issuer that has a class of securities registered pursuant to Section 12 of the Exchange Act, any issuer required to file reports pursuant to Section 15(d) of the Exchange Act, or any issuer which has issued any security traded on any national securities exchange or through any inter-dealer quotation medium.

  4. The Commission's Complaint in SEC v. Mortell alleged, among other things, that Wraback, at the direction of PCN's former President and Chief Operating Officer, engaged in a fraudulent scheme which resulted in PCN filing materially false and misleading financial statements in the company's annual report on Form 10-K for the fiscal year ended December 31, 1996, and in the company's quarterly reports on Form 10-Q for the first three quarters of fiscal year 1997. The Complaint alleged that Wraback engaged in a number of improper accounting practices that materially increased PCN's annual and quarterly revenue and net income in a departure from generally accepted accounting principles ("GAAP"). These practices included, among other things, recognizing revenue on sales that did not exist, improperly capitalizing software costs, prematurely recognizing revenue from customer support and maintenance contracts, and recognizing revenue from out-of-period shipments. The Complaint further alleged that Wraback falsified certain documents, provided altered documents and made false and misleading statements to PCN's auditors in connection with the audit of PCN's financial statements for fiscal years 1996 and 1997.


Based on the foregoing, the Commission deems it appropriate and in the public interest to impose the sanction consented to by Wraback in his Offer.

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

  1. Wraback is suspended from appearing or practicing before the Commission as an accountant.

  2. After five (5) years from the date of this Order, Wraback 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 Wraback'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: (a) Wraback, or any firm with which he is or becomes associated, is a member of the SEC Practice Section of the American Institute of Certified Public Accountants Division for CPA Firms ("ASEC Practice Section"); (b) Wraback, 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 (c) as long as Wraback 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 any application by Wraback to resume appearing or practicing before the Commission may include consideration of, in addition to the matters referenced above, any other matters relating to Wraback's character, integrity, professional conduct, or qualifications to appear or practice before the Commission.

By the Commission.

Jonathan G. Katz

1 Rule 102(e)(3) provides, in relevant part, that:
The Commission, with due regard to the public interest and without preliminary hearing, may, by order, temporarily 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 of the rules and regulations thereunder.
2 The findings herein are made pursuant to the Respondent's Offer and are not binding on any other person or entity in this or any other proceeding.


Modified: 07/10/2002