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U.S. Securities and Exchange Commission

UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION

SECURITIES EXCHANGE ACT OF 1934
Release No. 42549 / March 20, 2000

ACCOUNTING AND AUDITING ENFORCEMENT
Release No. 1237 / March 20, 2000

ADMINISTRATIVE PROCEEDING
File No. 3-10163

____________________  
  : ORDER INSTITUTING PUBLIC
In the Matter of : PROCEEDINGS, MAKING FINDINGS,
Jeremy G. Dunne, : AND IMPOSING A CEASE-AND-DESIST ORDER
 :
Respondent. :
____________________:

I.

The Securities and Exchange Commission ("Commission") deems it appropriate that public cease-and-desist proceedings be, and hereby are, instituted pursuant to Section 21C of the Securities Exchange Act of 1934 ("Exchange Act") to determine whether Laser Technology, Inc. ("Laser Tech" or "respondent") violated Sections 10(b), 13(a), 13(b)(2)(A), and 13(b)(5) of the Exchange Act, Rules 10b-5, 13a-1, 13a-13, and 13b2-1 thereunder, and Exchange Act Rule 12b-20.

II.

In anticipation of the institution of these proceedings, Laser Tech 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 in which the Commission is a party, and without admitting or denying the findings contained herein, except that Laser Tech admits the jurisdiction of the Commission over it and over the subject matter of these proceedings, Laser Tech consents to the issuance of this Order Instituting Public Proceedings, Making Findings, and Imposing a Cease-And-Desist Order ("Order") and to the entry of findings and the imposition of the relief set forth below.

III.

On the basis of this Order and respondent's Offer, the Commission finds the following:

A. Laser Tech is a Delaware corporation based in Englewood, Colorado, whose stock is registered with the Commission pursuant to Section 12(b) of the Exchange Act.

B. During the fiscal year ended September 30, 1993, Laser Tech made two shipments of speed gun products to its distributor in Australia. Laser Tech booked those shipments as sales and recognized the revenue in its financial statements included in its annual report on Form 10-K filed in December 1993. Laser Tech knew or should have known that its Australian distributor could not pay for the products without resales to end users. Thus, under Generally Accepted Accounting Principles ("GAAP"), Laser Tech should not have recognized the revenue.

C. In September and October 1994 and again in September 1995, at a time when they were officers and directors of Laser Tech, David W. Williams ("Williams") and Jeremy G. Dunne ("Dunne") borrowed funds personally. Those funds were then transmitted to Laser Tech's Australian distributor, who used them to pay down amounts owed to Laser Tech from the two shipments described above. Williams knew about these transactions, and Laser Tech's Chief Financial Officer, Pamela J. Sevy ("Sevy"), knowingly assisted in making these transactions. Dunne did not know that the funds were transmitted to or by a distributor in this fashion. These transactions were in effect loans from the officers/directors to Laser Tech, but Laser Tech booked them as payments received from the Australian distributor, which was improper under GAAP. Laser Tech did not disclose the transactions as related party transactions pursuant to Item 13, with reference to Item 404 of Regulation S-K, in its Forms 10-K for the fiscal years ended September 30, 1994 or September 30, 1995.

D. At some time in 1994 or 1995 Laser Tech began to receive returns of unsold products from its Australian distributor. Laser Tech did not maintain a record of these products in its official inventory or account for resales to other customers in its official books and records. Instead, in May 1995 Williams and Sevy opened a bank account under Laser Tech's name to facilitate resales of those products to other customers. Williams and Sevy did not notify Laser Tech's board of directors or seek or obtain their approval to open the account and did not disclose its existence to the company's independent accountants at any time from May 1995 to October 1998.

E. From approximately December 1995 through approximately June 1998 Laser Tech, through Sevy, made regular payments of principal and interest to the entities that had loaned money to Williams and Dunne, eventually repaying those loans in full. In approximately September 1997, Williams borrowed $165,000 from his brother H. DeWorth Williams, also a Laser Tech director, to reimburse Laser Tech for the repayments of his loans. H. DeWorth Williams paid the money directly to Laser Tech. Laser Tech did not report the payments described in this paragraph as related party transactions pursuant to Item 13, with reference to Item 404 of Regulation S-K, in its Forms 10-K for the fiscal years ended September 30, 1996 or September 30, 1997.

F. The loans and transactions through the undisclosed bank account, as described above, were effected to conceal the company's original improper recognition of revenue from the fiscal 1993 shipments. The concealment ended in October 1998 when the undisclosed bank account was discovered by a Laser Tech employee and reported to Laser Tech's independent accountants. Subsequently, the independent accountants resigned and were replaced by new independent accountants. Williams and Sevy are no longer employees, officers, or directors of Laser Tech.

G. Laser Tech, through Williams and Sevy, and at times through Dunne and H. DeWorth Williams, knew or should have known that its annual and quarterly reports filed with the Commission contained false and misleading statements because of the transactions described above. Laser Tech thus committed violations of Sections 10(b) and 13(a) of the Exchange Act, Rules 10b-5, 13a-1, and 13a-13 thereunder, and Exchange Act Rule 12b-20 for the year ended September 30, 1993, through the quarter ended June 30, 1998.

H. Laser Tech, through Williams and Sevy, knew or should have known that it was falsifying books, records or accounts subject to Section 13(b)(2)(A) of the Exchange Act, and that it was failing to make and keep books, records, and accounts, which, in reasonable detail, accurately and fairly reflected transactions and dispositions of its assets. Laser Tech thus committed violations of Sections 13(b)(2)(A) and 13(b)(5) of the Exchange Act and Rule 13b2-1 thereunder.

IV.

Accordingly, IT IS HEREBY ORDERED, pursuant to Section 21C of the Exchange Act, that Laser Tech cease and desist from committing or causing any violation and any future violation of Sections

10(b), 13(a), 13(b)(2)(A), and 13(b)(5) of the Exchange Act, Rules 10b-5, 13a-1, 13a-13, and 13b2-1 thereunder, and Exchange Act Rule 12b-20.

By the Commission.

Jonathan G. Katz
Secretary

http://www.sec.gov/litigation/admin/34-42549.htm


Modified:03/21/2000