UNITED STATES SECURITIES AND EXCHANGE COMMISSION


          Litigation Release No. 15690 / March 31, 1998

          Accounting and Auditing Enforcement
          Release No. 1022 / March 31, 1998

          SECURITIES AND EXCHANGE COMMISSION v. SURENDRA GUPTA, BHASKER B.
          RAO, AND R. RAMANA PENUMARTY, United States District Court for
          the Northern District of California, Civil Action No. 96-3608
          VRW.

          The Securities and Exchange Commission today announced that on
          March 25, 1998, the Honorable Vaughn R. Walker, United States
          District Judge for the Northern District of California, entered
          settled judgments concluding the Securities and Exchange
          Commission's lawsuit against three former officers of California
          Micro Devices Corporation ("Cal Micro"), a high-technology
          company headquartered in Milpitas, California.  The Commission's
          complaint alleges financial reporting fraud by all three
          defendants and illegal insider trading by Rao and Penumarty.
          Each defendant settled the Commission's lawsuit against him
          without admitting or denying the allegations contained in the
          Commission's complaint.

          Surendra Gupta, Cal Micro's former president, consented to pay a
          civil penalty of $72,250.00; to be barred from serving as an
          officer or director of a public company; and to be enjoined from
          future violations of applicable federal securities laws.

          Bhasker Rao, Cal Micro's former manager of its Tempe plant
          operations, consented to pay disgorgement of $70,203.75
          (representing his losses avoided as a result of sales of Cal
          Micro stock) plus prejudgment interest of $20,025; to pay a civil
          penalty for insider trading of $70,203.75; to pay an additional
          civil penalty of $10,000; to be barred as an officer or director
          of a public company for five years; and to be enjoined from
          future violations of applicable federal securities laws.

          Ramana Penumarty, Cal Micro's former manager of its Milpitas
          plant operations, consented to pay disgorgement of $58,385.43
          (representing his losses avoided as a result of sales of Cal
          Micro stock) plus prejudgment interest of $17,310; to pay a civil
          penalty for insider trading of $58,385.43; to pay an additional
          civil penalty of $10,000; to be barred as an officer or director
          of a public company for five years; and to be enjoined from
          future violations of applicable federal securities laws.

          The Commission's complaint, filed September 26, 1996, alleges
          that during Cal Micro's fiscal year ended June 30, 1994 the
          defendants artificially inflated Cal Micro's publicly reported
          revenue by directing employees to falsify documents in order to
          create the appearance that certain goods had been shipped to
          customers when, in fact, the goods had not been shipped or, in
          most cases, manufactured.

          The complaint further alleges that as a result of the defendants'
          fraudulent conduct, Cal Micro's financial statements for the
          fiscal year ended June 30, 1994, were materially false and
          misleading.

          The complaint finally alleges that Rao and Penumarty engaged in
          illegal insider trading by selling Cal Micro stock in 1994 while
          in possession of material non-public information, including, but
          not limited to, the knowledge that they had falsified the
          Company's books and records, circumvented its internal accounting
          controls, artificially inflated its reported revenues, and
          received internal reports which quantified the amount of false
          revenue booked on unshipped products.

          Pursuant to the settlement, Gupta consented to be enjoined from
          future violations of Sections 10(b), 13(a), 13(b)(2)(A),
          13(b)(2)(B) and 13(b)(5) of the Securities and Exchange Act of
          1934 ("Exchange Act") and Rules 10b-5, 12b-20, 13a-1, 13a-13,
          13b2-1 and 13b2-2 thereunder.  Rao consented to be enjoined from
          violations of Section 17(a) of the Securities Act of 1933
          (Securities Act"), Sections 10(b), 13(a), 13(b)(2)(A),
          13(b)(2)(B), 13(b)(5), and 16(a) of the Exchange Act and Rules
          10b-5, 12b-20, 13a-1, 13a-13, 13b2-1, and 16a-3 thereunder.
          Penumarty consented to be enjoined from violations of Section
          17(a) of the Securities Act, Sections 10(b), 13(a), 13(b)(2)(A),
          13(b)(2)(B), and 13(b)(5) of the Exchange Act and Rules 10b-5,
          12b-20, 13a-1, 13a-13, and 13b2-1 thereunder.

          For additional information see Litigation Release No. 14776;
          Accounting and Auditing Enforcement Release No. 750 (January 4,
          1996).