UNITED STATES OF AMERICA Before the SECURITIES AND EXCHANGE COMMISSION SECURITIES EXCHANGE ACT OF 1934 Release No. 38560 / April 30, 1997 ACCOUNTING AND AUDITING ENFORCEMENT Release No. 911 / April 30, 1997 ADMINISTRATIVE PROCEEDING File No. 3-9304 ______________________________ : In the Matter of : ORDER INSTITUTING PUBLIC : PROCEEDINGS AND OPINION AND RONALD H. HOFFMAN, CPA, : ORDER PURSUANT TO RULE 102(e) : OF THE COMMISSION'S RULES OF Respondent. : PRACTICE ______________________________: I. The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest that public administrative proceedings be, and they hereby are, instituted against Ronald H. Hoffman ("Hoffman" or "Respondent") pursuant to paragraph (3) of Rule 102(e) of the Commission's Rules of Practice [17 C.F.R.  201.102(e)(3)].1 II. In anticipation of the institution of these proceedings, Hoffman has submitted an Offer of Settlement which the Commission has determined to accept. Solely for the purpose of these proceedings and any other proceeding brought by or on behalf of the Commission or to which the Commission is a party, and without admitting or denying the Commission's findings contained herein, except the Commission's finding that a Final Judgment of Permanent Injunction and Other Equitable Relief has been entered 1 Paragraph (3) of Rule 102(e) provides, in pertinent part: 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 . . . any provision of the Federal securities laws or of the rules and regulations thereunder. ==========================================START OF PAGE 2====== against him as set forth in Paragraph III., which is admitted, Hoffman consents to the entry of this Order Instituting Public Proceedings and Opinion Pursuant to Rule 102(e) of the Commission's Rules of Practice ("Order"). III. FINDINGS On the basis of this Order and the Offer of Settlement submitted by Hoffman, the Commission finds2 that: A. Hoffman, age 49, is and has been since 1972 a certified public accountant in the state of Illinois. He was the chief financial officer for Structural Dynamics Research Corporation ("SDRC") from 1990 until November 1994. B. SDRC, an Ohio corporation with its principal place of business in Milford, Ohio, is an international supplier of mechanical design automation software and engineering services to automotive, aerospace and industrial manufacturers. SDRC's common stock became registered with the Commission pursuant to Section 12(g) of the Securities Exchange Act of 1934 ("Exchange Act") in September 1987. From September 1987 through the time relevant to the allegations herein, SDRC was required to file reports with the Commission pursuant to Section 13(a) of the Exchange Act. C. On April 10, 1997, the Commission filed a complaint against Hoffman and others in SEC v. Structural Dynamics Research Corporation, et al., Civil Action No. C-1-97-0352.3 On April 10, 1997, Hoffman consented to the entry of a Final Judgment of Permanent Injunction and Other Equitable Relief ("Final Judgment"), without admitting or denying the allegations in the complaint, except as to subject matter jurisdiction, which he admitted. On April 16, 1997, the United States District Court for the Southern District of Ohio entered the Final Judgment, which permanently enjoins Hoffman from violating Section 17(a) of the Securities Act of 1933 ("Securities Act") and Section 10(b) of the Exchange Act and Rules 10b-5, 13b2-1 and 13b2-2 promulgated thereunder, and orders him to pay disgorgement of $150,000 and a $50,000 civil penalty. D. The Commission's complaint filed in SEC v. Structural 2 The findings herein are made pursuant to Hoffman's Offer of Settlement and are not binding on any other person or entity named as a respondent in this or any other proceeding. 3 See SEC v. Structural Dynamics Research Corporation, et al., Litigation Release No. 15325. ==========================================START OF PAGE 3====== Dynamics Research Corporation, et al. alleges, among other things, that from at least 1992 and continuing through the middle of September 1994, SDRC inflated revenue and earnings by recognizing both premature and fictitious revenue. The complaint alleges that a material amount of this improperly recognized revenue was based on purchase orders containing conditional language from SDRC's Far East Operations, and that certain of SDRC's senior executives knew or were reckless in not knowing that SDRC's financial statements were materially false and misleading. The complaint alleges that Hoffman knew, or was reckless in not knowing, that SDRC recognized material amounts of revenue on the basis of purchase orders containing conditional language during 1993 and the first two quarters of 1994. The complaint further alleges that Hoffman was aware that material amounts of accounts receivable were written off during 1993 and 1994, and that Hoffman, directly or indirectly, omitted to state certain material information to SDRC's auditors in connection with their audit of SDRC's 1993 financial statements. In addition, the complaint alleges, Hoffman sold SDRC stock while in possession of material, non-public information about the accuracy of SDRC's financial statements. IV. ORDER IMPOSING SANCTIONS Based on the foregoing, the Commission deems it appropriate and in the public interest to accept the Offer of Settlement submitted by Hoffman and accordingly, IT IS HEREBY ORDERED, effective immediately, that: A. Hoffman is denied the privilege of appearing or practicing before the Commission as an accountant. B. Five years from the date of this Order, Hoffman 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: 1. 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 Hoffman 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; ==========================================START OF PAGE 4====== 2. an independent accountant upon submission of an application containing a showing satisfactory to the Commission that: a. Hoffman, or any firm with which he is or becomes associated in any capacity, is and will remain a 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 appears or practices before the Commission as an independent accountant; b. Hoffman 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 c. Hoffman 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. 3. The Commission's review of any request or application by Hoffman to resume appearing or practicing before the Commission may include consideration of, in addition to the matters referenced above, any other matters relating to Hoffman's character, integrity, professional conduct, or qualifications to appear or practice before the Commission. By the Commission. Jonathan G. Katz Secretary