Litigation Release No. 16263 \ August 26, 1999

SECURITIES AND EXCHANGE COMMISSION V. CHRISTIAN PETERSEN, U.S. District Court for the Northern District of Illinois, Civil Action No. 99 C 5085 (N.D. Ill. August 4, 1999)

On August 5, Judge Elaine Bucklo of the U.S. District Court the Northern District of Illinois entered an order of permanent injunction, civil penalties and other equitable relief against Christian Petersen. On August 4, the Commission filed a complaint alleging that Petersen sold Westell stock while he was in possession of material non-public information regarding Westell's failure to win the award of a substantial contract. The complaint further alleges that Petersen's conduct violated Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Petersen consented to the entry of the order without admitting or denying the allegations contained in the Commission's complaint. Petersen, a Florida resident, is a former sales director of Aurora, Illinois based Westell Technologies, Inc. The order imposed the following relief: (1) an injunction against future violations of the antifraud provisions of the federal securities laws, (2) an order of disgorgement in the amount of $14,994.00, plus prejudgment interest of $3,508.58, and (3) a civil penalty of $14,994.00.

The complaint alleges that in the late summer of 1996, Westell was a finalist in a competitive bidding process to supply certain high-speed data transfer equipment to a consortium of buyers (Consortium). The contracts were substantial and could have greatly increased Westell's revenues. On the morning of Friday, October 4, 1996, Westell learned that the Consortium had chosen another company to supply the equipment. Soon after learning of the Consortium's decision, Petersen sold 744 shares of Westell stock. After the close of the market on October 4, the Consortium publicly announced its selection. On Monday, October 7, the next day of trading, Westell's stock price dropped substantially and continued to fall in the following days. Petersen thereby avoided a loss of $9,114.00 by selling his stock before the public announcement.