SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 17161 / September 28, 2001

SEC V. GEORGE F. BRANDT, United States District Court for the Northern District of California Civil Action No. C 01-02518 (JL)

SEC CHARGES INSIDER TRADING IN ACQUISITION OF CLARIFY, INC. BY NORTEL NETWORKS

On July 2, 2001, the Securities and Exchange Commission ("Commission") filed an insider trading case alleging that the spouse of a San Francisco public relations executive obtained nonpublic information about the acquisition of Clarify, Inc. by Nortel Networks Corporation. The Commission alleged that George F. Brandt of San Francisco used the information he had gotten from his wife to buy Clarify stock before the information became public.

In the complaint, filed in the United States District Court for the Northern District of California, the Commission alleged that Brandt's spouse was an executive of a San Francisco public relations agency specializing in the representation of high technology companies. Clarify had asked her firm to assist in coordinating media contacts in preparation for the acquisition announcement. She told Brandt about the acquisition in confidence and Brandt used the confidential information to buy Clarify stock.

Without admitting or denying the Commission's allegations, Brandt consented to a permanent injunction prohibiting future violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Brandt also agreed to pay a total of $29,419.41, including $14,246.26 in disgorgement of profits, prejudgment interest of $926.89, and a civil penalty of $14,246.26.

The Commission acknowledges the assistance of NASD Regulation, Inc., in this matter.