UNITED STATES SECURITIES AND EXCHANGE COMMISSION
LITIGATION RELEASE NO. 17415 / March 14, 2002
SECURITIES AND EXCHANGE COMMISSION v. Richard S. Berger, Misc. Action No. 4-02-MC-008-Y, USDC, NDTX (Fort Worth Division)
On March 14, 2002, the Securities and Exchange Commission filed an Application for an Order to Show Cause in the United States District Court for the Northern District of Texas against Richard S. Berger, the former Chief Financial Officer of Piranha, Inc. The Application seeks to have the Court order Berger to produce documents, pursuant to a document subpoena issued and served by the Commission in connection with an ongoing Commission investigation. In its Application, the Commission alleges that Berger's failure to comply with the subpoena has impeded the Commission's investigation.
Piranha Inc., is a Richardson, Texas, development stage company in the business of data-compression and other computer and Internet related technology. Piranha's common stock is registered with the Commission and is quoted on the OTC Bulletin Board (symbol BYTE), an electronic quotation service operated by the National Association of Securities Dealers. Berger is a resident of Chicago, Illinois.
According to the Commission's Application, its investigation involves whether Berger, Piranha or others issued false and misleading press releases, overstated the value of assets in its Commission filings, understated amortization expenses and failed to disclose over $600,000 in unauthorized payments to Berger. Piranha's claims and press releases regarding the company's technology and financial status appear to have influenced trading in its common stock. While initially trading at approximately $10 per share in January of 2000, the company's stock reached a high of $65 per share in March of 2000. Currently, shares of Piranha trade at $.33 per-share, a more than 99% decrease from its high. Besides being the former CFO, Berger is Piranha's largest single shareholder and a member of the Board of Directors. The Commission's Application alleges that the subpoenaed documents are needed to determine if Berger, Piranha or others have violated or are about to violate provisions of the federal securities laws.