SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 17262 / December 7, 2001.
Accounting and Auditing Enforcement Release No. 1477
FORMER CEO OF DIGITAL LIGHTWAVE, INC. SETTLES SEC CHARGES FOR AIDING AND ABETTING COMPANY'S VIOLATIONS OF FEDERAL SECURITIES LAWS
Securities and Exchange Commission v. Digital Lightwave, Inc. and Bryan J. Zwan, Civil Action No. 8:00-CV-614-T-26F (M.D. Florida, filed March 29, 2000)
The Securities and Exchange Commission (Commission) announced that the United States District Court for the Middle District of Florida issued an order enjoining Bryan J. Zwan, founder and former Chief Executive Officer of Tampa, Florida based Digital Lightwave, Inc. (Digital), from violating or aiding and abetting violations of certain of the federal securities laws. Among other things, the order enjoins Zwan from violating the provision of the securities laws prohibiting making materially false statements to auditors, and from aiding or abetting books and records violations by public companies. Zwan consented to the entry of the injunction without admitting or denying the allegations of the Commission's complaint. In conjunction with the entry of the injunction, the Court ordered Zwan to pay a $10,000 civil money penalty.
The Commission's settlement with Zwan was the last outstanding action of several matters related to a fraudulent earnings management scheme, books and records violations, and other violations, that the Commission's complaint alleged had taken place at Digital during two quarters in 1997. Without admitting or denying the Commission's allegations, Digital previously consented to an injunction against violating the antifraud, books and records, and other provisions of the federal securities laws. Other individuals who are or had been officers of Digital previously settled administrative proceedings brought by the Commission, without admitting or denying the Commission's findings.
On October 23, 2001, the United States District Court entered a Final Judgment of Permanent Injunction and other Relief as to Bryan J. Zwan ("Final Judgment"). The Final Judgment enjoins Zwan from aiding and abetting violations of Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act and Rules 12b-20 and 13a-13 thereunder, and from violating Rule 13b2-2 promulgated under the Exchange Act. The Final Judgment also orders Zwan to pay a $10,000 civil money penalty.
See also LR-16491A; In the Matter of Seth P. Joseph, Securities Exchange Act of 1934 Release No. 34-42588; Accounting and Auditing Release No. 1244 and In the Matter of Beth A. Morris and Steven H. Grant, Securities Exchange Act of 1934 Release No. 34-42587; Accounting and Auditing Release No. 1243.