Lernout & Hauspie Speech Products, N.V.

SECURITIES EXCHANGE ACT OF 1934
Release No. 47442 / March 4, 2003

ADMINISTRATIVE PROCEEDING
File No. 3-11054

ACCOUNTING AND AUDITING ENFORCEMENT
Release No. 1730 / March 4, 2003

I.

The Securities and Exchange Commission ("Commission") deems it necessary and appropriate for the protection of investors that public administrative proceedings be, and hereby are, instituted with respect to Lernout & Hauspie Speech Products, N.V. ("Lernout & Hauspie" or "Respondent"), pursuant to Section 12(j) of the Securities Exchange Act of 1934 (15 U.S.C. §78l(j))("Exchange Act").

II.

In anticipation of the institution of these administrative proceedings, Respondent has submitted an Offer of Settlement ("Offer") that 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, and prior to a hearing pursuant to the Commission's Rules of Practice, 17 C.F.R. §201.100 et seq., without admitting or denying the findings set forth below, except as to the Commission's finding of jurisdiction over Respondent and the subject matter of these proceedings, and the findings contained in Part III under the heading "Respondent" which Respondent admits, Respondent consents to the entry of this Order Instituting Public Administrative Proceedings, Making Findings and Revoking Registration Pursuant to Section 12(j) of the Securities Exchange Act of 1934 ("Order") set forth below.

III.

On the basis of this Order and the Offer of Settlement submitted by Respondent, the Commission finds that:

RESPONDENT

Lernout & Hauspie is a Belgian company with headquarters formerly in both Ieper, Belgium and Burlington, Massachusetts. At all relevant times, Respondent's common stock was registered with the Commission pursuant to Section 12(g) of the Exchange Act (15 U.S.C. §78l(g)) and was listed on Nasdaq National Market and Nasdaq Europe (formerly Easdaq). It is currently quoted on the "Pink Sheets" disseminated by Pink Sheets LLC.

FACTS

On November 29, 2000, Lernout & Hauspie filed a voluntary petition in the United States Bankruptcy Court for the District of Delaware for relief under Chapter 11 of Title 11 of the United States Code, 11 USC §§ 101-1330 (as amended) (Case No. 00-4398-JHW). Thereafter, on December 27, 2000, Lernout & Hauspie voluntarily filed an equivalent application under Belgium insolvency statutes and on October 24, 2001, the Belgian court declared Lernout & Hauspie bankrupt.

Lernout & Hauspie has failed to comply with Section 10(b) of the Exchange Act (15 U.S.C. §§ 78j(b)) and Exchange Act Rules 10b-5 and 12b-20 (17 C.F.R. §§ 240.10b-5 and 240.12b-20) by including materially false and misleading information in its filings, including financial statements that failed to conform with Generally Accepted Accounting Principles, as required by Commission Regulation S-X, in its Annual Reports on Form 20F and Form 10-K for the calendar years ended December 31, 1996, 1997, 1998 and 1999, and in its Quarterly Reports on Form 6-K or Form 10-Q for the first two quarters of 2000.

Lernout & Hauspie has failed to comply with Section 13(a) of the Exchange Act (15 U.S.C. § 78m(a)) and Exchange Act Rules 13a-1, 13a-13 and 13a-16 (17 C.F.R. §§240.13a-1, 240.13a-13 and 240.13a-16) while its common stock was registered with the Commission in that it has not filed an Annual Report (on either Form 20F or Form 10-K) or periodic or quarterly reports (on Form 6-K or Form 10-Q) for any fiscal period subsequent to its fiscal quarter ending June 30, 2000. This failure resulted from internal controls so defective that it was unable to generate auditable financial statements.

Lernout & Hauspie has failed to comply with Sections 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act (15 U.S.C. §§ 78m(b)(2)(A) and 78m(b)(2)(B)) by failing to make and keep books, records, and accounts, which, in reasonable detail, accurately and fairly reflected the transactions and disposition of its assets, and by failing to maintain a system of internal accounting controls sufficient to provide reasonable assurances that transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles.

FINDINGS

In view of the foregoing, the Commission finds that it is necessary and appropriate for the protection of investors that the registration of Respondent's common stock be revoked pursuant to Section 12(j) of the Exchange Act (15 U.S.C. §78l(j)).

ORDER

Accordingly, IT IS HEREBY ORDERED, pursuant to Section 12(j) of the Securities Exchange Act of 1934 (15 U.S.C. §78l(j)) that the registration pursuant to Section 12(g) of the Securities Exchange Act of 1934 (15 U.S.C. § 78l(g)) of Respondent's common stock be, and hereby is, revoked.

By the Commission.

Jonathan G. Katz
Secretary