UNITED STATES OF AMERICA Before the SECURITIES AND EXCHANGE COMMISSION SECURITIES EXCHANGE ACT OF 1934 Release No. 38903 / August 5, 1997 ACCOUNTING AND AUDITING ENFORCEMENT Release No. 944 / August 5, 1997 ADMINISTRATIVE PROCEEDING File No. 3-9354 ___________________________________ : ORDER INSTITUTING PUBLIC In the Matter of : PROCEEDINGS PURSUANT TO : RULE 102(e) OF THE JAMES P. BROWN, : 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 . . . attorney . . . 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 James P. Brown ("Brown"). II. In anticipation of the institution of these administrative proceedings, Brown 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, Brown, 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 Brown's Offer, the Commission finds <(2)> the following: A. Brown, an attorney licensed by the State of Florida, served as general counsel of Policy Management Systems Corporation ("PMSC") from 1986 through 1993 and was promoted to senior vice president in 1992. 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, Brown 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 July 22, 1997, the Commission filed a civil injunctive action against Brown and others [Securities and Exchange Commission v. Policy Management Systems Corporation, et al., Civil Action No. 96-CV-2193-0, (D. S.C.)] alleging, among other things, that Brown violated Section 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, Brown reviewed financial statements contained in certain periodic reports filed on behalf of PMSC <(2)> The findings herein are made pursuant to Brown'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====== with the Commission. Certain of these financial statements materially misstated PMSC s results of operations in violation of generally accepted accounting principles. The complaint further alleged that, as a control person, Brown was liable for PMSC s failure to make and keep accurate books and records and to maintain adequate internal accounting controls, and that Brown provided inaccurate information to PMSC s independent auditors. D. On July 22, 1997, without admitting or denying any of the allegations contained in the Commission's complaint, Brown 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 Brown and accordingly, IT IS HEREBY ORDERED, effective immediately, that: James P. Brown be, and hereby is, denied the privilege of appearing or practicing before the Commission pursuant to Rule 102(e) of the Commission's Rules of Practice, provided, however, that Brown may, after a period of five (5) years, apply to resume appearing or practicing before the Commission. By the Commission Jonathan G. Katz Secretary