UNITED STATES OF AMERICA PRIVATE before the SECURITIES AND EXCHANGE COMMISSION SECURITIES AND EXCHANGE ACT OF 1934 Rel. No. 39589 / January 28, 1998 AUDITING AND ACCOUNTING ENFORCEMENT Rel. No. 1007 / January 28, 1998 Admin. Proc. No. 3-7625 : In the Matter of : ORDER : REINSTATING STEVEN C. WOLFE, SR., CPA : PRIVILEGE 2173 Sand Dollar Drive : TO PRACTICE Longmont, CO 80503 : BEFORE THE : COMMISSION : : Steven C. Wolfe, Sr., a certified public accountant, has filed an application seeking to reinstate his privilege of practicing before this Commission. Pursuant to former Rule 2(e) of our Rules of Practice, / in an Order dated December 10, 1991 ("Order"), we denied Wolfe the privilege of appearing or practicing before us. / The Office of the Chief Accountant and the Division of Enforcement (together "the Staff") do not oppose Wolfe's reinstatement, provided he complies with the undertaking he submitted with his application for reinstatement. Under the circumstances, we deem it appropriate to reinstate his privilege on that basis. The Order is based on a district court order enjoining Wolfe from violating, or aiding and abetting the violation of, antifraud and periodic reporting provisions of the federal securities laws. / Wolfe also was ordered to disgorge losses avoided from a stock sale made while in possession of material non-public information, and to pay an additional civil penalty. This injunctive action stemmed primarily from Wolfe's involvement, from January 1, 1986 to March 31, 1987, as Corporate Controller, in overstating revenues at Miniscribe Corporation. Wolfe first applied in 1993 for reinstatement of his privilege to appear and practice before us. We denied that application, stating that "the time elapsed since the imposition of the sanction (approximately two years) is not sufficient to permit a reasonable determination whether Wolfe possesses the qualifications and fitness necessary to justify reinstatement." / Our order expressly stated that Wolfe was not precluded from applying for reinstatement and attempting to make the requisite showing at a later date. Wolfe subsequently submitted a second application for reinstatement. In October 1996, our Secretary advised Wolfe that because this Commission was evenly divided on the matter of whether Wolfe had shown good cause for reinstatement, Wolfe would continue to be precluded from practice before us. In the application now before us, Wolfe acknowledges the severity of his misconduct and accepts responsibility for his actions. He points to several factors that he contends demonstrate his rehabilitation. In particular, Wolfe advises that he has been employed since 1991, in positions of increasing responsibility, by Anatel Corp., a small privately-held manufacturing company. / Wolfe also states that he has completed a series of continuing professional education courses and taught accounting for several years, on an adjunct basis, at a community college. / He further relies on his cooperation with authorities in connection with the criminal prosecution and conviction of two principals involved in the Miniscribe fraud. Additionally, Wolfe has submitted an undertaking in connection with this application, by which he undertakes and agrees that, if reinstated, he will at all times comply with the following conditions: 1. In practicing before this Commission as a preparer or reviewer of financial statements required to be filed with this Commission, or as a person responsible for the preparation or review of financial statements required to be filed with this Commission, Wolfe's work will be reviewed by the independent audit committee of the company or in some other manner deemed acceptable to the staff of this Commission; 2. In practicing before this Commission as an independent accountant Wolfe will submit an application to this Commission containing a satisfactory showing to this Commission that: (a) Wolfe, or any firm with which he is or becomes associated with in any capacity, is and will remain, a member of the SEC Practice Section of the AICPA's Division for CPA Firms; and, (b) Wolfe, or the firm, prior to Wolfe's resuming practice as an independent accountant, has received an unqualified report relating to his or the firm's latest peer review conducted in accordance with the guidelines adopted by the SEC Practice Section; and, (c) Wolfe 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 this Commission as an independent accountant. The Staff does not oppose Wolfe's reinstatement provided that his reinstatement is subject to compliance with his undertaking. The Staff advises that, in the six-year period since we denied Wolfe the privilege of practicing before us, there has been no evidence that Wolfe has engaged in further acts of professional or ethical misconduct. The Staff also states that Wolfe "has made a consistent, concerted and successful effort to reform and develop his professional conduct" and posits that "the suspension has been of sufficient duration to permit a reasonable determination that Wolfe presently possesses the qualifications and fitness necessary to justify reinstatement." / Rule 102(e)(5) of our Rules of Practice governs applications for reinstatement, and provides that this Commission may reinstate the privilege to appear before us "for good cause shown." As we stated in our order denying Wolfe's first application, the determination of "good cause" is necessarily highly fact specific. In making that determination, we are guided by the purpose of the Rule, which is "to determine whether a person's professional qualifications, including his character and integrity, are such that he is fit to appear and practice before the Commission." / Under all the facts and circumstances presented, we find that Wolfe has shown good cause for reinstatement. Although Wolfe's misconduct was serious, he has demonstrated that a reoccurrence of his past misconduct is unlikely, and that he presently possesses the qualifications and fitness necessary to justify reinstatement. In addition, Wolfe's conformance with the undertaking will provide continuing assurances about Wolfe's professional conduct in his practice before this Commission. Accordingly, it is ORDERED that Steven C. Wolfe, Sr.'s privilege to appear and practice before this Commission be reinstated, provided that he comply fully with the undertaking contained herein. By the Commission (Chairman LEVITT and Commissioners JOHNSON, HUNT, CAREY and UNGER). Jonathan G. Katz Secretary / While we revised comprehensively our Rules of Practice in 1995, we made no substantive changes to Rule 2(e), other than to renumber it as Rule 102(e). / In the Matter of Steven C. Wolfe, Sr., CPA, Securities Exchange Act Rel. No. 30054, Accounting and Auditing Enforcement Rel. No. 344 (December 10, 1991), 50 SEC Docket 698. Wolfe consented to issuance of the Order without admitting or denying any of the allegations, except those as to jurisdiction and the existence of an injunction. / SEC v. Wiles, No. CIV.A.91-M-1393 (D. Colo. Nov. 25, 1991). / Securities Exchange Act Rel. No. 34209, Accounting and Auditing Enforcement Rel. No. 569 (June 14, 1994), 56 SEC Docket 2923. / Wolfe has been Vice President-Finance of Anatel since November 1994. Anatel is audited on an annual basis by a national accounting firm. / Wolfe took one continuing education course as part of a stipulation agreement regarding licensing with the Colorado State Board of Accountancy. He has taken voluntarily other courses in both ethics and accounting. Wolfe remains suspended by the Colorado authority until his privilege to practice before this Commission has been reinstated. / The Staff notes the following additional facts reflecting Wolfe's efforts at reform: Wolfe's work record appears to be exemplary; Wolfe has cooperated fully with law enforcement personnel in various proceedings related to the Miniscribe fraud; Wolfe consistently has fulfilled the requirements imposed upon him by the Colorado State Board of Accountancy as a result of the Order; and Wolfe has demonstrated persistence in seeking readmission d candor in his submissions. / Touche Ross v. SEC, 609 F.2d 570, 579 (2d Cir. 1979). (..continued)