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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. 45507 / March 5, 2002

ACCOUNTING AND AUDITING ENFORCEMENT
Release No. 1511 / March 5, 2002

ADMINISTRATIVE PROCEEDING
File No. 3-10715


In the Matter of

TELXON CORPORATION,
GARY L. GRAND, and
JAMES G. CLEVELAND

Respondents.


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ORDER INSTITUTING PROCEEDINGS PURSUANT TO SECTION 21C OF THE SECURITIES EXCHANGE ACT OF 1934, MAKING FINDINGS AND IMPOSING A CEASE-AND-DESIST ORDER

I.

The Securities and Exchange Commission ("Commission") deems it appropriate that administrative proceedings be, and hereby are, instituted pursuant to Section 21C of the Securities Exchange Act of 1934 ("Exchange Act") against Telxon Corporation, Gary L. Grand, and James G. Cleveland (hereinafter referred to collectively as "Respondents").

II.

In anticipation of the institution of these administrative proceedings, Respondents have each submitted an Offer of Settlement ("Offers") which the Commission has determined to accept. Solely for the purposes of these proceedings, and any other proceedings brought by or on behalf of the Commission or to which the Commission is a party, and without admitting or denying the findings set forth below, except as to the jurisdiction of the Commission over themselves and over the subject matter of theseproceedings, which they admit, Respondents consent to the entry of this Order Instituting Proceedings Pursuant to Section 21C of the Securities Exchange Act of 1934, Making Findings and Imposing a Cease-and-Desist Order ("Order").

III.

FACTS

The Commission makes the following findings1:

A. Respondents

Telxon Corporation ("Telxon") is a Delaware corporation, formerly headquartered in Akron, Ohio, that manufactures bar code scanners and hand held computing devices. Prior to its acquisition by a competitor in December 2000, Telxon's stock was listed on NASDAQ.

Gary L. Grand, ("Grand") age 38, is a resident of Munroe Falls, Ohio, and was Telxon's controller until September 2001. He is a CPA licensed in Ohio.

James G. Cleveland, ("Cleveland") age 49, is a resident of Hudson, Ohio, and was the vice president of North America (sales) of Telxon until January 2000.

B. Summary

This matter concerns improper revenue recognition at Telxon, a manufacturer of hand held computing devices and related systems. Telxon's former chief financial officer Kenneth Haver ("Haver"), with assistance from others, recognized revenue improperly for three transactions, dated September 29 and 30, 1998, that inflated quarterly revenues and profits substantially. Later that year, a competitor approached Telxon about a potential merger and discovered one of the improper transactions during due diligence. Telxon reviewed the available facts and restated that transaction in December 1998. Following an accounting review and subsequent audits, Telxon announced three additional restatements. Haver bears primary responsibility for the improper revenue recognition and other accounting problems (and is the subject of a concurrent Commission enforcement action). Cleveland, a former vice President of North America sales, had significant involvement in a restated transaction, and Grand,former controller, assisted in the original recording of the restated transactions and in the preparation of the financial statements that included those transactions.

C. Telxon Rejects Takeover/Merger Offers

In the summer of 1997, a competitor confidentially indicated to Telxon that it was interested in pursuing a business combination. In April 1998, the competitor publicly indicated an interest in acquiring all of Telxon's outstanding shares for $38 per share, a significant premium over Telxon's then market price, which had been trading in the range of $22 to $27 per share. In June 1998, the competitor increased the proposed consideration to $40 per share cash or up to $42 per share, in cash and stock.

Telxon's board rejected the competitor's proposal of $40 per share cash as inadequate and stated that it had insufficient information to make a determination with respect to the $42 cash/stock proposal. The local press quoted a Telxon officer as saying the offers were not "fair value" because the company's earnings had "improved markedly" and it's "strategic growth plan" would allow the stock to reach the competitor's offer price while remaining independent. At a shareholders' meeting in September 1998, the press reported a Telxon officer's prediction that Telxon "would achieve a 9% operating margin and a 12% to 15% return on equity by the end of its three-year growth plan."

Some Telxon shareholders supported the competitor's takeover offers. One group of funds holding slightly under 5% of Telxon's outstanding shares sought to pressure Telxon into a deal by nominating an outsider for election to Telxon's board of directors, and by proposing a change in Telxon's shareholder rights plan. The funds' adviser criticized Telxon in the press for its "ostrich defense" and for having "one of the least independent boards [of directors] I have ever seen." In settlement of litigation brought by Telxon against the adviser, Telxon amended its shareholder rights plan and agreed to appoint a director acceptable to the adviser. In October 1998, Telxon announced its results for the quarter ended September 30, 1998: revenues grew 13% from the previous year, and profits grew 51% (excluding certain one-time costs). In its earnings release, Telxon said it continued to be optimistic for the balance of the fiscal year because of "strong growth" in the U.S. and Europe, and a "surge in demand" for a new product.

In November 1998, the competitor renewed its confidential approach to Telxon. Representatives of Telxon and the competitor met to discuss terms of a proposed transaction. During due diligence, Telxon disclosed information relating to a shipment of over $14 million to a distributor on September 30, 1998. The competitor broke off the discussions and Telxon announced a restatement of the distributor transaction onDecember 11, 1998. Telxon's stock price, which had reached as high as $30 per share in a rising NASDAQ market, fell to $11.75 per share by December 21. Following an accounting review, Telxon announced further restatements in February 1999, June 1999 and July 2000. In December 2000, the competitor purchased Telxon in a stock-for-stock deal valued at $21 per Telxon share.

D. Improper September 1998 Transactions

Telxon recognized revenue improperly in connection with three transactions dated September 29 and 30, 1998. These were: (i) the distributor shipment; (ii) a guaranteed lease-purchase by a chain of hardware stores; and (iii) a software sale to a retail chain. The effect of the three transactions on Telxon's September 1998 quarterly revenues and profits were (amounts in $000):

  Revenues   Pre-tax profit
As initially reported $124,300     $4,100  
  Less:            
    1. Distributor shipment   $14,100     $7,200
    2. Hardware chain lease   $7,000     $2,200
    3. Software sale   $2,000     $2,000
Without improper sales   $101,200     ($7,300)

These three transactions were not related to each other. But as the above table demonstrates, each of the three transactions was material to Telxon's pre-tax profits.

1. Distributor Shipment

In 1997, Telxon planned to sell product indirectly by recruiting distributors that it referred to as "Value Added Distributors" ("VADs"). One such VAD, located in the Midwest, received a shipment of approximately $4.2 million of Telxon product in June 1998. Shortly thereafter, while the VAD still held a substantial portion of this product, Telxon and the VAD discussed major increases in shipments -- $14 million more in the September 1998 quarter, and up to $20 million more in the following quarter. At this time, the VAD offered two basic services that it referred to as the "agent program" and the "distributor program." Under the "distributor program" the manufacturer (Telxon in this case) was responsible for selling product that the VAD warehoused, shipped, and checked for quality control. The VAD understood that the discussed shipments fell into the "distributor program" category, and it agreed in principle to the future shipments.

In mid-to-late September 1998, Haver and another Telxon official asked the VAD whether Telxon could get paid the $14 million at the time of shipment. The distributor put Telxon in contact with its financing company to arrange the payment. On September 30 Telxon and the financing company signed a "vendor" agreement, and on September 30 the VAD and the financing company signed a "consignment" agreement. Pursuant to these contracts, Telxon shipped $14.1 million of goods to the VAD on September 30, and the financing company wired $14.1 million to Telxon. Title to the goods passed to the financing company; the financing company consigned the goods to the VAD; and Telxon agreed to pay up-front fees to the financing company and additional fees based on the balance of unsold goods held by the VAD. Telxon also agreed to pay monthly fees and handling charges to the VAD, also based on the balance of unsold goods. The VAD would collect customer payments for wire transfer to the financing company. The vendor agreement gave the financing company an unrestricted right to repossess the goods from the VAD and put them back to Telxon for immediate and full payment. As of September 30, 1998, no end-user or customer had placed an order, with either Telxon or the VAD, for any of the goods shipped to the VAD that day.

Haver negotiated and signed the financing agreement with the financing company on behalf of Telxon. In accordance with its standard policy, Telxon recognized revenue on the VAD transaction upon shipment. Telxon's controller, Gary Grand, was responsible for the initial preparation of Telxon's financial statements. Grand failed to learn all terms of this transaction before preparing Telxon's September 1998 quarterly financial statements, even though Grand received and read a copy of the vendor agreement prior to the preparation of those quarterly financial statements. No disclosure of the VAD shipment or the vendor agreement was made to Telxon's outside auditors during the quarterly review. Grand directed the preparation of Telxon's financial statements for the September 1998 quarter, and these included the revenue derived from the shipment to the VAD. Haver reviewed and approved the issuance of those financial statements.

Revenue recognition for the shipment to the VAD was not in conformity with Generally Accepted Accounting Principles ("GAAP"). The group of agreements was, in substance, a product financing arrangement for which revenue recognition is precluded pursuant to Statement of Financial Accounting Standards ("SFAS") No. 49, Accounting for Product Financing Arrangements (June 1981). More fundamentally, the transaction was not a sale or an "earning[s] process," as revenue had not been realized and earned. See, FASB Statement of Financial Accounting Concepts No. 5, Recognition and Measurement in Financial Statements of Business Enterprises (December 1984), ¶¶ 83-84. Telxon retained substantially all risks of ownership in the goods; the VAD had almost no risk at all; the ostensible "owner" was a financing company that had no means of using or selling the goods.

2. Guaranteed Lease-Purchase

In the summer of 1998, Telxon negotiated a sale to a company that operated a chain of hardware stores. Telxon's competitors were also seeking the business, and it was well known at the time that the hardware chain was in very poor financial condition. On September 30, 1998, Telxon shipped the product to the hardware chain and recognized revenue of approximately $7 million. Title to the goods transferred to a leasing company, and the hardware chain signed a long-term lease with the leasing company. Without the hardware chain's knowledge, however, Telxon also signed a separate agreement with the leasing company on September 29, by which Telxon guaranteed the hardware chain's lease payments to the leasing company (a "credit enhancement agreement"). The leasing company paid cash to Telxon for the product, pursuant to the lease contract with the hardware chain. The hardware chain filed a bankruptcy petition and defaulted on the lease within months, and the leasing company demanded full payment on the lease from Telxon.

Haver negotiated and signed the lease guarantee on Telxon's behalf. Grand knew about the guarantee prior to preparing the September 1998 quarterly financial statements, but he failed to investigate adequately the circumstances surrounding the transaction before Telxon recorded the revenue associated with the transaction. The revenues and profits derived from this transaction were incorporated into Telxon's financial statements for the September 1998 quarter.

Telxon's recognition of this revenue was not in conformity with GAAP, which require that "the sale of property [subject to a lease] shall not be treated as a sale if the seller . . . retains substantial risks of ownership in the leased property." See, SFAS No. 13, Accounting for Leases (November 1976), ¶¶ 21-22. Since Telxon guaranteed the lease payments to the leasing company, Telxon retained substantial risks of ownership.

3. Software Sale

One of Telxon's biggest customers was a company that operated a nationwide chain of retail stores. In late September 1998, James Cleveland and Telxon's chief technical officer proposed a sale of customized "AirBeam" software to the retail chain. The software was designed to upgrade existing software and to provide a "Y2K fix." The retail chain agreed to the purchase in principle and negotiated a price of $2 million, but first required that its technicians prepare detailed specifications for upgrades that would be needed to Telxon's base software. The retail chain providedthose specifications to Telxon by facsimile dated October 2, 1998; Telxon agreed to the specifications and the retail chain issued a purchase order ("p/o") for the software on October 5, 1998. The p/o stated that the price included all future updates and maintenance, and that payment was contingent upon (i) "fault free performance," (ii) "complete installation . . . in all [chain] business units," and (iii) "the requirements noted in Attachment 'A' [that is, the specifications dated October 2]." Telxon's chief technical officer estimated that his department needed three to six months to write the software code for the upgrades specified by the retail chain.

Cleveland, Haver, Grand and others met shortly after the retail chain's p/o arrived on October 5, 1998. At the meeting, the group discussed the state of completion of the software and, at or following the meeting, it was decided that Telxon would recognize the full $2 million in revenue as of September 30, 1998.2 Telxon assigned no related cost-of-goods-sold to the revenues and its pre-tax profits were thereby increased by the entire $2 million. Telxon delivered the AirBeam product to the retail chain without the requested modifications, and the retail chain did not pay.

Recognition of this revenue was not in conformity with GAAP. For software sales GAAP require, inter alia, "persuasive evidence of an arrangement" and delivery of the software as of the date of recognition. Also, if "uncertainty exists about customer acceptance" after delivery, revenue should not be recognized. See, Statement of Position ("SOP") 97-2, Software Revenue Recognition (October 1997), ¶¶ 8, 20. The retail chain's p/o highlighted several significant uncertainties as to acceptance. The evidence of an arrangement between Telxon and the retail chain as of September 30 was not "persuasive," given that the retail chain did not supply its specifications for upgrades until October 2, or a p/o until October 5, 1998. Likewise, software which was not in existence as of September 30, 1998 can not have been delivered as of that date. In addition, Telxon's agreement to provide future upgrades and maintenance required deferral of at least a portion of the revenue. See, SOP 97-2, ¶ 9.

E. Transactions and Impaired Assets Affecting Prior Fiscal Years

As of fiscal year end March 31, 1998, Telxon had significant assets on its balance sheet for which collectability was in doubt or dispute, or which had been incorrectly recorded in the first place. These assets arose mainly from transactions with four distributors or customers: (i) equity and notes receivable derived from the sale and licensing of a software business to a company operated by a former Telxon employee,in 1996 and 1997; (ii) equity, notes receivable, and accounts receivable derived from sales to Telxon's Mexican distributor in 1997 and 1998; (iii) a lease-purchase by an insurance company in 1997; and (iv) sales to a VAD in 1997 and 1998.

Telxon restated these transactions beginning in February 1999. In addition, Telxon restated many other smaller transactions, which were mostly a question of timing (that is, the revenues were not written off completely, but moved from one period to another). Without taking into account the smaller transactions, the following table illustrates the effect of restating these transactions on Telxon's financial statements for the years ended March 31, 1996, 1997 and 1998 (amounts in $000):

Fiscal Year Ended Revenues Pre-tax Profit (Loss) Transaction
03/31/96 as reported: $486,469 $26,835  
     less: $2,000 $2,000 Software sale
03/31/96 as adjusted: $484,469 $24,835  
 
03/31/97 as reported: $466,012 ($5,691)  
     less: $1,300 $1,600 Software sale
    - $700 Mexico Dist.
    $3,100 $1,400 Ins. Co.
03/31/97 as adjusted: $461,612 ($9,391)  
 
03/31/98 as reported: $465,870 $28,855  
     less: $1,600 $5,800 Software sale
    - $4,300 Mexico Dist.
    ($1,000) ($400) Ins. Co.
    $8,100 $3,200 VAD
03/31/98 as adjusted: $457,170 $15,955  

1. As to the software sale, the circumstances surrounding the transaction were such that, although legal title transferred, it was subsequently determined that the risks and incidents of ownership did not pass from Telxon for accounting purposes. Among other things, the buyer was very thinly capitalized, made a very small down payment, financed the transaction with notes payable to Telxon, and planned to fund its payments to Telxon out of future operations. In addition, Telxon received no payments after March 1997 because of a dispute that arose between Telxon and the buyer over amounts due on a cross-license arrangement. Nevertheless, Telxon continued to record revenues and costs on this transaction through December 1998, aspayments became due on the licenses, and Telxon did not record a charge to income in connection with the increasing unpaid balance on the notes due from the buyer.

In restating this transaction, Telxon reversed the licensing revenues and royalty costs accrued, and returned the software assets to its balance sheet, as if unsold. Telxon then reported amortization of the software assets, as if it continued to own the assets for accounting purposes. As of March 31, 1998, Telxon reported total impairment of all assets connected with the transaction.

2. As to the Mexican distributor, the "peso crisis" and expansion into other markets caused the distributor to have financial problems which led to delays in payment beginning in 1997. Nevertheless, Telxon continued to ship product to the distributor and to record revenues through November 1998. Telxon failed to record a timely charge to income in connection with the increasing unpaid balance of receivables. Instead, Telxon agreed to convert the unpaid trade receivables to notes receivable, and to equity in the distributor.

In restating these transactions, Telxon reported as bad debt expense all sales to the distributor that were unpaid after 120 days, beginning in the fourth quarter of fiscal 1997. This effectively erased the conversion of receivables into notes and equity. Telxon did not adjust the revenues that it had previously recorded on the shipments to the distributor.

3. As to the insurance company, at the time of the lease-purchase in March 1997, Telxon was in the process of developing a new product which would be used by the buyer. The buyer originally purchased an existing product with the right to exchange the new product for the old at a later date. Telxon was subject to significant penalties if it failed to meet the development schedule of the new product. Subsequently, in June 1997, a Telxon sales department employee granted the third-party leasing agent a right to return the product to Telxon if the buyer ceased making lease payments. In August 1998, the insurance company stopped making lease payments, alleging that Telxon had failed to meet certain development milestones for the new product. Telxon initially recorded the transaction as a normal sale, with a portion of the revenue reserved for recognition on shipment of the new product; and Telxon accrued the estimated costs for the delivery of the new product. Telxon restated by accounting for this transaction as an operating lease. Revenues were reversed and recorded pro rata over the lease term.

4. As to the VAD, in March 1998, Cleveland and another employee in Telxon's sales department signed or authorized letters which granted the VAD the right to return 100% of certain goods, over and above the return rights held by the VAD in itsdistributorship contract. Telxon thus retained the risks of ownership for these goods for accounting purposes. At that time, Telxon did not have sufficient internal controls to ensure that all agreements entered into by the sales department were provided to the accounting department, and these letters were not provided to the accounting department. Telxon recorded revenue upon shipment, its usual manner, for the product covered by the special return rights. Following the start of Telxon's new fiscal year in April 1998, the VAD returned to Telxon the majority of the product covered by the special return rights. In restating, Telxon reversed the revenues associated with the special return rights.

For the reasons discussed above, the initial recognition of revenue in connection with these transactions was, at best, questionable, and likely not in conformity with GAAP. Notwithstanding the potentially inappropriate recognition of revenue in connection with the software sale and the shipments to the Mexican distributor, the slowed and stopped payments on these accounts were an indication that, by fiscal year end March 31, 1998 at the latest, these assets were potentially impaired and needed to be analyzed in accordance with SFAS No. 5, Accounting for Contingencies (March 1975) and SFAS No. 114, Accounting by Creditors for Impairment of a Loan (May 1993). These slowed and stopped payments were discussed generally amongst Telxon's management, auditors and board of directors. Nevertheless, no action was taken until the accounting review which began in 1999.

IV.

LEGAL ANALYSIS

A. Telxon Violated the Reporting Provisions of the Exchange Act

Section 13(a) of the Exchange Act requires that issuers with securities registered pursuant to Section 12 of the Exchange Act file such information and documents as the Commission shall prescribe by its rules and regulations. Rules 13a-1 and 13a-13 require issuers to file annual and quarterly reports, respectively. Rule 12b-20 requires that these periodic reports contain such further information as is necessary to make the required statements, in the light of the circumstances under which they are made, not misleading. The filing of a periodic report containing materially false or misleading information constitutes a violation of these provisions. SEC v. Savoy Indus., Inc., 587 F.2d 1149, 1165 (D.C. Cir. 1978), cert. denied, 440 U.S. 913 (1979); SEC v. Kalvex, Inc., 425 F. Supp. 310, 316 (S.D.N.Y. 1975).

Telxon violated Section 13(a) of the Exchange Act and Rules 12b-20, 13a-1 and 13a-13 thereunder by filing annual reports on Form 10-K for the fiscal years ended March 31, 1997 and March 31, 1998, and quarterly reports on Form 10-Q for fiscal 1997 and 1998, and the quarters ended June 30, 1998, and September 30, 1998, that contained materially false and misleading financial statements. Telxon's balance sheets were materially false and misleading throughout this time because they reflected assets which were derived from improperly recognized revenue. Telxon's income statements were materially false and misleading for the years ended March 31, 1997 and March 31, 1998, and the quarters therein, and for the quarters ended June 30 and September 30, 1998, because Telxon recognized revenue that was not in conformity with GAAP.

B. Telxon Violated the Record-Keeping and
Internal Control Provisions of the Exchange Act

Section 13(b)(2)(A) of the Exchange Act requires issuers to make and keep books, records, and accounts, which, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the issuer. Telxon violated Section 13(b)(2)(A) of the Exchange Act by maintaining books and records which, among other things, falsely overstated the company's revenues and assets.

Section 13(b)(2)(B) of the Exchange Act requires issuers to devise and maintain a system of internal accounting controls sufficient to provide reasonable assurances that, inter alia, transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP. Telxon violated Section 13(b)(2)(B) of the Exchange Act by failing to devise and maintain a system of internal accounting controls sufficient to provide reasonable assurances that revenues were recognized in conformity with GAAP.

C. Grand and Cleveland Each
Violated Rule 13b2-1 of the Exchange Act

Rule 13b2-1 provides that no person shall, directly or indirectly, falsify or cause to be falsified any book, record or account subject to Section 13(b)(2)(A) of the Exchange Act. Gary L. Grand violated Rule 13b2-1 when he participated in the decision to recognize revenue in connection with the sale of software to the retail chain as of September 30, 1998, and when he directed the preparation of Telxon's financial statements for the quarter ended September 30, 1998, which reflected revenues derived from the software sale, the "credit enhancement agreement" with the leasing company, and the "vendor agreement" with the financing company. James G. Cleveland violated Rule 13b2-1 when he participated in the decision to recognize revenue in connection with the software sale to the retail chain as of September 30, 1998.

D. Grand and Cleveland Each Were a Cause of Telxon's
Violations of the Reporting, Books and Records and
Internal Control Provisions of Section 13 of the Exchange Act

Section 21C of the Exchange Act provides that the Commission may order that any person, who is or was a cause of a violation of any provision of the Exchange Act, to cease and desist from causing such violation. Grand was a cause of certain Telxon violations of Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) the Exchange Act and Rules 12b-20, 13a-1 and 13a-13 thereunder, when he directed the preparation of financial statements which contained revenues that were not recognized in conformity with GAAP.

Cleveland was a cause of certain Telxon violations of Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) the Exchange Act and Rules 12b-20, 13a-1 and 13a-13 thereunder, when he participated in the decision to recognize revenue in connection with the software sale to the retail chain as of September 30, 1998.

V.

Based on the foregoing, the Commission finds that:

A. Telxon Corporation violated 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.

B. Gary L. Grand violated Rule 13b2-1 promulgated under the Exchange Act and was a cause of Telxon's violations 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. James G. Cleveland violated Rule 13b2-1 promulgated under the Exchange Act and was a cause of Telxon's violations 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.

VI.

In view of the foregoing, the Commission deems it appropriate to accept the Respondents' Offers and to impose the relief specified in those Offers.

VII.

Accordingly, IT IS HEREBY ORDERED, pursuant to Section 21C of the Exchange Act, that:

A. Telxon Corporation cease and desist from committing or causing any violation, and any future violation, 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.

B. Gary L. Grand cease and desist from causing any violation, and any future violation, 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, and from committing or causing any violation, and any future violation, of Rule 13b2-1 under the Exchange Act.

C. James G. Cleveland cease and desist from causing any violation, and any future violation, 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, and from committing or causing any violation, and any future violation, of Rule 13b2-1 under the Exchange Act.

By the Commission.

Jonathan G. Katz
Secretary

Footnotes

1 The findings herein are made pursuant to Respondents' Offers of Settlement and are not binding on any other person or entity in this or any other proceeding.
2 In connection with recording the transaction, Cleveland advised an accounting department clerk that Telxon had received a "verbal" p/o from the retail chain.

http://www.sec.gov/litigation/admin/34-45507.htm


Modified: 03/06/2002