UNITED STATES OF AMERICA Before the SECURITIES AND EXCHANGE COMMISSION SECURITIES EXCHANGE ACT OF 1934 Release No. 38902 / August 5, 1997 ACCOUNTING AND AUDITING ENFORCEMENT Release No. 943 / August 5, 1997 ADMINISTRATIVE PROCEEDING File No. 3-9353 ___________________________________ : ORDER INSTITUTING PUBLIC In the Matter of : PROCEEDINGS PURSUANT TO : RULE 102(e) OF THE ROBERT L. GRESHAM, CPA : COMMISSION'S RULES OF : PRACTICE, MAKING FINDINGS Respondent. : AND IMPOSING REMEDIAL : SANCTIONS ___________________________________: I. The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest that public administrative proceedings pursuant to Rule 102(e) <(1)> of the Commission's Rules of <(1)> Paragraph (3) of Rule 102(e) provides, in relevant part, that: . . . (i) The Commission, with due regard to the public interest . . . may . . . 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. Paragraph (3)(ii) of Rule 102(e) provides, in relevant part, that: Any person temporarily suspended from appearing or practicing before the Commission in accordance with this . . . section, may within 30 days after service upon him . . . of the order of temporary suspension, petition to lift the temporary suspension. If no petition has been received by the Commission within 30 days after service of the order, the suspension shall become permanent. Practice be, and they hereby are, instituted against Robert L. Gresham ("Gresham"). II. In anticipation of the institution of these administrative proceedings, Gresham 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, Gresham, without admitting or denying the findings set forth herein, except as to the entry of the injunction set forth in paragraph III.D. and the Commission's jurisdiction over him, both of which are admitted, 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. III. Based on this Order and Gresham's Offer, the Commission finds <(2)> the following: A. Gresham is a certified public accountant licensed by the State of North Carolina. Gresham was the chief financial officer of Policy Management Systems Corporation ("PMSC") from 1981 through August 1993. The common stock of PMSC is registered pursuant to Section 12(b) of the Securities Exchange Act of 1934 ("Exchange Act"). During 1991, 1992 and the first quarter of 1993, Gresham practiced before the Commission within the meaning of Rule 102(e) of the Commission's Rules of Practice in connection with the preparation of PMSC's financial statements and other documents. B. On March 22, 1997, the Commission filed a civil injunctive action against Gresham and others [Securities and Exchange Commission v. Policy Management Systems Corporation , et al., Civil Action No. 97-CV-2193-0 (D. S.C.)] alleging, among other things, that Gresham violated Sections 13(b)(5) of the Exchange Act and Rules 13b2-1 and 13b2-2 thereunder, and charging him with liability, as a control person, for violations by PMSC 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. C. The Commission's complaint alleged that from 1991 through the first quarter of 1993, PMSC s Financial Services Division, which reported to Gresham, was responsible for the preparation of financial statements contained in certain periodic reports filed <(2)> The findings herein are made pursuant to Gresham's Offer and are not binding on any other person or entity named as a respondent in this or any other proceeding. ======END OF PAGE 2====== on behalf of PMSC with the Commission. Gresham signed PMSC's quarterly and annual reports which were filed with the Commission during the period from January 1, 1991, through March 31, 1993. The complaint also alleged that PMSC and certain of its employees utilized revenue recognition practices which were not in accordance with generally accepted accounting principles and which had the effect of materially misstating PMSC s results of operations and that Gresham, on behalf of PMSC, signed the annual management representation letter in February, 1993, which did not disclose these revenue recognition practices. The complaint further alleged that, as a control person, Gresham was liable for PMSC s failure to make and keep accurate books and records and to maintain adequate internal accounting controls. D. On July 22, 1997, without admitting or denying any of the allegations contained in the Commission's complaint, Gresham consented to the entry of an order of permanent injunction enjoining him from violations of Sections 13(a), 13(b)(2)(A), 13(b)(2)(B) and 13(b)(5) of the Exchange Act and Rules 12b-20, 13a-1, 13a-13, 13b2-1 and 13b2-2 thereunder. IV. Based on the foregoing, the Commission deems it appropriate and in the public interest to accept the Offer submitted by Gresham and accordingly, IT IS HEREBY ORDERED, effective immediately, that: 1. Robert L. Gresham is denied the privilege of appearing or practicing before the Commission as an accountant. 2. After five (5) years from the date of this Order, Gresham may apply to the Commission by submitting an application to the Office of the Chief Accountant which requests that he be permitted to resume appearing or practicing before the Commission as: a. a preparer or reviewer, or a person responsible for the preparation or review, of financial statements of a public company to be filed with the Commission upon submission of an application satisfactory to the Commission in which Gresham undertakes that, in his practice before the Commission, his work will be reviewed by the independent audit committee of the company for which he works or in some other manner acceptable to the Commission; b. an independent accountant upon submission of an application containing a showing satisfactory to the Commission that: (1) Gresham, or any firm with which he is or becomes associated in any capacity, is and will remain a ======END OF PAGE 3====== member of the SEC Practice Section of the American Institute of Certified Public Accountants Division for CPA Firms ("SEC Practice Section") as long as he practices before the Commission as an independent accountant; (2) Gresham 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 (3) Gresham will comply with all applicable SEC Practice Section requirements, including all requirements for periodic peer reviews, concurring partner reviews, and continuing professional education, as long as he appears or practices before the Commission as an independent accountant. c. The Commission's review of any request or application by Gresham to resume appearing or practicing before the Commission may include consideration of, in addition to the matters referenced above, any other matters relating to Gresham's character, integrity, professional conduct, or qualifications to appear or practice before the Commission. By the Commission Jonathan G. Katz Secretary ======END OF PAGE 4======