SECURITIES AND EXCHANGE COMMISSION Washington, D.C. SECURITIES AND EXCHANGE COMMISSION v. COMPARATOR SYSTEMS CORPORATION, ROBERT REED ROGERS, SCOTT HITT AND GREGORY ARMIJO, Civil Action No. 96-3856 (LGB) (JGx) (C.D. Cal.) Litigation Release No. 15855 / August 20, 1998 Accounting and Auditing Enforcement Release No. 1068 / August 20, 1998 The U.S. Securities and Exchange Commission announced today that on August 14, 1998, the Honorable Lourdes G. Baird, United States District Judge, entered Supplemental Judgments against defendants Robert Reed Rogers and Gregory Armijo. Rogers was formerly the chairman, chief executive officer and treasurer of Comparator Systems Corporation ("Comparator"); Armijo was formerly Comparator's vice president for operations, corporate secretary and a member of Comparator's board of directors. The Supplemental Judgment against defendant Rogers orders him to disgorge $263,106 in salary from Comparator, $4,469.50 in profits from the sale of stock in Comparator Systems Corporation by an entity known as the Talisman trust, and $29,921.17 in prejudgment interest on those amounts. Rogers also was ordered to disgorge 30,536,575 shares of Comparator stock and to disavow all debts owed to him by Comparator and incurred during the period covered by the Commission's Complaint. The Supplemental Judgment against defendant Armijo orders him to disgorge $106,401 in salary from Comparator, $9,990 from the sale of Comparator stock, and $13,038.06 in prejudgment interest on those amounts. Armijo also was ordered to disgorge 3,579,816 shares of Comparator stock and to disavow all debts owed to him by Comparator and incurred during the period covered by the Commission's Complaint. The injunctive relief and the officer and director bars ordered against defendants Rogers and Armijo on September 18, 1996 remain in full force and effect; the Commission withdrew its claim for civil money penalties against those defendants. The Commission also announced today that on May 18, 1998, the Court entered a Final Judgment of Permanent Injunction and Other Relief by Default Against Defendant Scott Hitt. Hitt was formerly Comparator's executive vice president and a member of Comparator's board of directors. That Judgment permanently restrains and enjoins defendant Hitt from violating the anti- fraud, reporting, and books and records provisions of the securities laws, specifically Section 17(a) of the Securities Act of 1933 and Sections 10(b), 13(a), 13(b)(2)(A)-(B), and 13(b)(5) of the Securities Exchange Act of 1934 and Rules 10b-5, 13a-1, 13a-13, 13b2-1, and 12b-20 thereunder. The judgment also permanently bars Hitt from serving in the future as an officer or director of any public corporation; orders him to disgorge $516,614.31 along with prejudgment interest of $87,635.35 thereon; orders him to pay a civil money penalty in the amount of $516,614.31; and continues the freezes on Hitt's assets. The Complaint, filed on May 31, 1996, alleged that Comparator issued false and misleading financial statements for the fiscal years ending June 30, 1994 and June 30, 1995 and for the first three quarters of fiscal year 1996, which grossly inflated the company's assets throughout that period. The Complaint further alleges that defendants Rogers, Armijo, and Hitt caused Comparator to file these false financial statements for the purpose of enabling Comparator common stock to remain listed for trading on the Nasdaq SmallCap Market System and to facilitate the sale of Comparator common stock to the public. The Commission's investigation is continuing as to other issues concerning Comparator and trading in its securities. See also Litigation Release No. 14927 and Accounting and Auditing Enforcement Release No. 786, dated May 31, 1996; Litigation Release No. 14979 and Accounting and Auditing Enforcement Release No. 801, dated July 11, 1996; Securities Exchange Act Release No. 37702 and Accounting and Auditing Enforcement Release No. 818, dated September 19, 1996; and Litigation Release No. 15056 and Accounting and Auditing Enforcement Release No. 819, dated September 19, 1996.