SEC, Paradyne Announce Settlement
TAMPA, Fla. (AP) _ Paradyne Corp. and the federal government reached agreement Monday over allegations of fraud and securities violations, averting a trial set for this week.
The Securities and Exchange Commission had accused Paradyne of using fraud in selling computer equipment to the Social Security Administration to link the administration’s offices to headquarters. The agency said the company misled Social Security officials by repackaging the products of another company.
Paradyne, without admitting or denying guilt, agreed to follow all SEC disclosure regulations when selling stock.
″We believe it’s a reasonable settlement,″ said George Pressly, Paradyne’s senior vice president for communications. ″We did not have to admit fraud. Now we can just go forward with the company.″
Under settlement terms, the company must fully disclose its business methods and financial health, a requirement for publicly-traded firms.
Trial had been scheduled for Wednesday in U.S. District Court here.
The SEC was pleased with the settlement because the agency had sought only to force Paradyne to comply with regulations, said Michael Wolensky, an SEC spoeksman.
Paradyne still is fighting a government proposal to ban the firm from all federal contracts for three years. The company must also contend with suits from investors whose Paradyne stocks dropped in value after the SEC charges.
Once traded at $35 per share, Paradyne closed Monday at $8.25 a share.