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- UNITED STATES SECURITIES AND EXCHANGE COMMISSION 
- 
-SECURITIES ACT OF 1933 
-Release No.  8660 / February 9, 2006 
- 
-SECURITIES EXCHANGE ACT OF 1934 
-Release No. 53265 / February 9, 2006 
- 
-INVESTMENT ADVISERS ACT OF 1940 
-Release No. 2486 / February 9, 2006 
- 
-ACCOUNTING AND AUDITIING ENFORCEMENT 
-Release No.  2372 / February 9, 2006   
- 
-ADMINISTRATIVE PROCEEDING 
-File No.  3-12179 
- 
-In the Matter of Lawrence A. Stoler, CPA 
- 
-On February 9, 2006, the Securities and Exchange Commission instituted administrative and 
-cease-and-desist proceedings pursuant to Rule 102(e) of the Commission’s Rules of Practice, 
-Section 8A of the Securities Act of 1933, Section 21C of the Securities Exchange Act of 1934 
-and Section 203(k) of the Investment Advisers Act of 1940, against Lawrence A. Stoler, CPA  
- 
-In the Order Instituting Proceedings, the Division of Enforcement and the Office of the Chief 
-Accountant allege that Stoler engaged in improper professional conduct in the audits of three 
-hedge funds, Lipper Convertibles, L.P. (“Convertibles”), Lipper Convertibles Series II, L.P. 
-(“Series II”), and Lipper Fixed Income Fund, L.P. (“Fixed Income”) (collectively, the “Funds”) 
-for the year ended December 31, 2000 and was a cause of violations by the Funds, their portfolio 
-manager, Edward J. Strafaci, and the entity that managed the Funds, Lipper Holdings, LLC.  
-Stoler was the engagement partner on PricewaterhouseCoopers’ audits of the Funds’ financial 
-statements, including the financial statements for Convertibles and Series II that were filed with 
-the Commission pursuant to Section 17 of the Exchange Act.  The Division of Enforcement and 
-the Office of the Chief Accountant allege that Stoler failed to adequately assess the substantial 
-evidence produced by the audits that Strafaci was materially overstating the value of the 
-convertible bonds and convertible preferred stock in which the Funds were invested, and 
-unquestioningly relied on a purported confirmation process that was significantly flawed.  They 
-further allege that Stoler knew or should have known that his failure to conduct and supervise an 
-audit that conformed to GAAS and his approval of, and signature on, unqualified audit reports on 
-the Funds’ 2000 financial statements, and internal control reports filed by Convertibles and 
-Series II, would contribute to violations of the federal securities laws by  the Funds, Strafaci, and 
-Lipper Holdings, including the dissemination to prospective investors and advisory clients, and 
-the filing, of materially misleading financial statements, and the filing of inaccurate internal 
-control reports.  
- 
-A hearing will be scheduled before an Administrative Law Judge to determine whether such 
-allegations are true, to afford the respondent an opportunity to establish defenses to the 
-allegations, to determine whether remedial action is necessary and appropriate, and to determine 
-whether respondent should be ordered to cease and desist from committing or causing violations 
-of and any future violations of the securities laws.  The Administrative Law Judge is directed to 
-issue a decision no later than 300 days from the date of service of the Order Instituting 
-Proceedings, pursuant to Rule 360(a)(2) of the Commission’s Rules of Practice. 
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+        Bruce E. Snyder, Jr.
+       
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+                   U.S. SECURITIES AND EXCHANGE COMMISSION 
+
+ Litigation Release No. 19557 / February 7, 2006 
+
+ Accounting and Auditing Enforcement  Release No. 2373 / February 7, 2006 
+
+  SEC v. Bruce E. Snyder, Jr. , Civil Action No. 03 CV 4658 (S.D.Tx.) (February 1, 2006) 
+
+ Federal Jury Finds that Bruce E. Snyder, Jr., Former Chief Accounting Officer of Waste Management, Inc., Engaged in Securities Fraud 
+
+ 
+
+ On February 1, 2006, a federal jury in Houston, Texas, returned a verdict finding that Bruce E. Snyder, Jr., the former Chief Accounting Officer of Waste Management, Inc. ("WMI"), violated the antifraud provisions of the federal securities laws by failing to make certain required disclosures which caused WMI's reported financial results for the first quarter of fiscal year 1999 to be materially false and misleading.  The jury also found that Snyder engaged in insider trading.  The jury reached its verdict after a four-week trial in the United States District Court for the Southern District of Texas (Houston Division).   
+
+ The jury found that Snyder violated the antifraud provisions of the federal securities laws, Section 10(b) of the Securities and Exchange Act of 1934 ("Exchange Act") and Exchange Act Rule 10b-5, and Section 17(a) of the Securities Act of 1933.  The jury also found that Snyder aided and abetted WMI's violations of Section 13(a) of the Exchange Act and Exchange Act Rules 12b-20 and 13a-13, the reporting provisions of the federal securities laws.    
+
+ The Commission's Complaint against Snyder alleged that he prepared, reviewed, and signed a materially false or misleading Form 10-Q that WMI filed with the Commission for the first quarter ended March 31, 1999, even though he knew, or was reckless in not knowing, that it failed to disclose that WMI's reported pretax income for that quarter included tens of millions of dollars of non-recurring income items.  The undisclosed income items inflated WMI's EPS by approximately $0.09 or 17%.  The Commission's Complaint further alleged that Snyder sold WMI stock on May 17, 1999, while in possession of the material, nonpublic information that WMI's reported pretax income for the first quarter of fiscal year 1999 included tens of millions of dollars of undisclosed, non-recurring income items.  The Complaint also alleged that Snyder sold WMI stock again on June 9, 1999, when, in addition to the aforementioned information, Snyder possessed material, nonpublic information that WMI's internal earnings projections showed a large shortfall against the second quarter 1999 EPS guidance WMI had provided to the investing public. 
+
+ See Litigation Release NO.  18422  / October 22, 2003. 
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-                   U.S. SECURITIES AND EXCHANGE COMMISSION 
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- Litigation Release No. 19735 / June 22, 2006 
-
- Accounting and Auditing Enforcement Release No. 2443 / June 22, 2006 
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-  SEC v. Scientific-Atlanta, Inc. , Civil Action No. 06 CIV. 4823 (PKC) (S.D.N.Y.) 
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- SEC Charges Scientific-Atlanta for Aiding and Abetting and Two Senior Executives for Causing Adelphia's Reporting Violations 
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- Scientific-Atlanta to Pay $20 Million in Settlement 
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- 
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- The Securities and Exchange Commission today charged Scientific-Atlanta, Inc. with aiding and abetting Adelphia Communications Corporation's violations of the reporting, books and records, and internal controls provisions of the federal securities laws. Scientific-Atlanta entered into a marketing support agreement with Adelphia in 2000 that Adelphia misused to inflate its earnings by approximately $43 million. Scientific-Atlanta has agreed to pay $20 million in disgorgement in settlement of the charges.  
-
- The SEC also today announced that Wallace G. Haislip, Scientific-Atlanta's Senior Vice President, Operations, and Julian W. Eidson, Scientific-Atlanta's Senior Vice President, have consented to the issuance of cease-and-desist Orders for their respective roles in causing Adelphia's violations.  
-
- The SEC's Complaint against Scientific-Atlanta, filed today in federal court in Manhattan, alleges that in or about August 2000, Adelphia requested that Scientific-Atlanta increase the price of digital cable television set-top boxes it was selling to Adelphia and pay the amount of the price increase back to Adelphia in the form of marketing support for the stated purpose of marketing the Scientific-Atlanta cable television set-top boxes. Adelphia did not use the marketing support payments to market Scientific-Atlanta cable television set-top boxes. Adelphia recorded the price increase it paid Scientific-Atlanta as a capital expense, and recognized the marketing support payments as a contra marketing expense, thereby artificially reducing its marketing expense and increasing EBITDA. The transaction did not impact Scientific-Atlanta's public financial statements.  
-
- The Complaint alleges that Scientific-Atlanta was aware of a number of facts that together demonstrated that Adelphia was misusing the marketing support agreement. Those facts included, among others, (i) a retroactive price increase on set-top boxes previously delivered to Adelphia; (ii) Adelphia's request for a commercially unreasonable high dollar amount in marketing support payments; (iii) repeated requests for higher levels of marketing support in later periods even though the major marketing push was to have occurred in earlier periods; (iv) knowledge that Adelphia's request for the marketing support agreement was driven by its desire to obtain an accounting benefit; and (v) the inclusion of a false reason for the price increase in one of the contracts documenting the marketing support agreement.  
-
- Scientific-Atlanta, without admitting or denying the allegations in the Complaint, has consented to the entry of a final judgment, subject to court approval, that requires Scientific-Atlanta to pay $20 million in disgorgement and enjoins Scientific-Atlanta from violating and aiding and abetting any violations and any future violations of Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Securities Exchange Act of 1934 ("Exchange Act"), and Rules 12b-20, 13a-1, and 13a-13 thereunder. The settlement takes into consideration Scientific-Atlanta's cooperation during the investigation.  
-
- The SEC's Orders against Haislip and Eidson find that they were the most senior Scientific-Atlanta executives responsible for approving the form of the marketing support agreement, and that they should have been on notice that it was unlikely that Adelphia was using the marketing support agreement to market Scientific-Atlanta set-top boxes. The Orders order Haislip and Eidson to cease and desist from causing any violations and any future violations of Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act and Rules 12b-20, 13a-1, and 13a-13 thereunder.  
-
- Haislip and Eidson agreed to the settlements without admitting or denying the findings in the SEC's Orders.  
-
- 
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- 
-
-   SEC Complaint in this matter    Administrative Proceeding No. 34-54030    Administrative Proceeding No. 34-54031  
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+  UNITED STATES OF AMERICA 
+ before the 
+ SECURITIES AND EXCHANGE COMMISSION 
+ 
+Securities Exchange Act of 1934 
+Release No.  54031 / June 22, 2006 
+ 
+Accounting and Auditing Enforcement 
+Release No.   2445 / June 22, 2006 
+ 
+Administrative Proceeding 
+File No.  3-12340 
+                                                                     
+     :  ORDER INSTITUTING CEASE-AND- 
+In the Matter of   :  DE SIST PROCEEDINGS, MAKING 
+     :  FINDINGS, AND IMPOSING A CEASE- 
+JULIAN W. EIDSON,  :  AND -DESIST ORDER PURSUANT TO  
+     :   S E C T I O N  2 1 C  O F  T H E  S E C U R I T I E S  
+Respondent.    :  EXCHANGE ACT OF 1934 
+     :  
+                                                               : 
+ 
+I. 
+  
+ The Securities and Exchange Commission (“Commission”) deems it appropriate that cease-
+and-desist proceedings be, and hereby are, instituted pursuant to Section 21C of the Securities 
+Exchange Act of 1934 (“Exchange Act”) against Julian W. Eidson (“Eidson” or “Respondent”).  
+ 
+II. 
+ 
+ In anticipation of the institution of these proceedings, Respondent has submitted an Offer 
+of Settlement (“Offer”) which the Commission has determined to accept.  Solely for the purpose of 
+these proceedings and any other proceedings brought by or on behalf of the Commission, or to 
+which the Commission is a party, and without admitting or denying the findings herein, except as 
+to the Commission’s jurisdiction over him and the subject matter of these proceedings, which are 
+admitted, Respondent consents to the entry of this Order Instituting Cease-and-Desist Proceedings, 
+Making Findings, and Imposing a Cease-and-Desist Order Pursuant to Section 21C of the 
+Securities Exchange Act of 1934 (“Order”), as set forth below. 
+ 2
+ 
+III. 
+On the basis of this Order and Respondent’s Offer, the Commission finds1 that:  
+ 
+Summary 
+ 
+1. In the fall of 2000, Adelphia Communications Corporation (“Adelphia”), a cable 
+television system owner and operator, asked Scientific-Atlanta, Inc. (“Scientific-Atlanta”), a vendor 
+that provided digital cable set-top boxes used by Adelphia, to enter into a marketing support 
+transaction.  Following negotiations between Adelphia and Scientific-Atlanta, the parties agreed that 
+Scientific-Atlanta would make marketing support payments for the stated purpose of helping 
+Adelphia increase demand for digital set-top boxes provided by Scientific-Atlanta and, in return, 
+Scientific-Atlanta would receive a corresponding increase in the price of digital set-top boxes it had 
+supplied Adelphia in the past and was contractually obligated to supply in the future pursuant to a 
+long-term purchase contract that had been entered into in May 2000.  Adelphia did not use the 
+marketing support payments to help increase demand for digital set-top boxes.  Adelphia recorded 
+the price increases it paid Scientific-Atlanta as capital expenditures, and recognized the marketing 
+support payments paid by Scientific-Atlanta as a contra marketing expense, thereby artificially 
+reducing its marketing expense and increasing Earnings Before Interest, Taxes, Depreciation, and 
+Amortization (“EBITDA”).  In this manner, Adelphia was able to use the transaction to reduce 
+improperly its operating costs and increase its earnings by approximately $16.8 million in 2000 
+and $26.2 million in 2001. 
+2. Respondent, Scientific-Atlanta’s principal accounting officer at the time, was one of 
+the senior executives responsible for approving the form of the transaction and was the senior 
+executive responsible for approving Scientific-Atlanta’s accounting for the transaction.  Respondent 
+did not negotiate the terms of the transaction or review the transaction documents.    
+Respondent 
+3. Respondent, age 65, was Vice President, Controller, and Principal Accounting 
+Officer of Scientific-Atlanta from at least 2000 to 2003.   
+Relevant Entities 
+4. Scientific-Atlanta is a Georgia corporation, with corporate headquarters in 
+Lawrenceville, Georgia.  Scientific-Atlanta sells end-to-end networks used by programmers and 
+cable operators and provides customer service and support for the cable television industry.  At all 
+relevant times, Scientific-Atlanta’s common stock was registered with the Commission pursuant to 
+Section 12(g) of the Exchange Act and was publicly traded on the New York Stock Exchange.   
+5. Adelphia is a Delaware corporation, formerly headquartered in Coudersport, 
+Pennsylvania.  Adelphia owns, operates, and manages cable television systems and other related 
+                                                 
+1  The findings herein are made pursuant to Respondent’s Offer of Settlement and are not 
+binding on any other person or entity in this or any other proceeding. 
+ 3
+telecommunications businesses.  On March 27, 2002, Adelphia announced that it was liable for 
+approximately $2.3 billion in debt that it had previously failed to disclose.  In May 2002, certain 
+members of the Rigas family, who controlled and held officer and director positions with 
+Adelphia, resigned and Adelphia disclosed that it had misrepresented its financial performance for 
+the fiscal years 2000 and 2001 by, among other things, overstating its earnings.  On July 18, 2002, 
+the Commission filed SEC v. Adelphia Communications Corporation, et al., 02 Civ. 5776 (PKC) 
+(S.D.N.Y.), alleging that widespread, multifaceted financial fraud occurred at Adelphia.  On July 8, 
+2004, two Adelphia executives were convicted on 18 counts  of securities fraud, bank fraud, and 
+conspiracy.  On May 31, 2005, the U.S. District Court for the Southern District of New York 
+entered a consent order enjoining Adelphia from violating Section 17(a) of the Securities Act of 
+1933, Sections 10(b), 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act and Rules 10b-5, 
+12b-20, 13a-1, and 13a-13 under the Exchange Act.   
+The Year 2000 Marketing Support Agreement 
+6. In May 2000, Adelphia entered into a long-term purchase agreement for digital set-
+top boxes with Scientific-Atlanta.  The agreement, which expired on December 31, 2001, required 
+Adelphia to purchase digital set-top boxes and transmission equipment at prices fixed by the terms 
+of the agreement, and contained no provision regarding marketing.   
+7. In June 2000, Adelphia realized that its second quarter reported EBITDA would fall 
+below analysts’ expectations.  Adelphia devised a plan to increase EBITDA by reducing operating 
+costs through a marketing support agreement with Scientific-Atlanta.  The business rationale for 
+the marketing support agreement that Adelphia stated to Scientific-Atlanta was to assist Adelphia 
+in the roll-out of its digital cable service, which was in direct competition with satellite television.  
+The request was consistent with the cable industry’s use of marketing campaigns to introduce 
+digital service and to compete with satellite television.  Pursuant to the agreement, Scientific-
+Atlanta would make marketing support payments to Adelphia.  The transaction, however, would 
+have no economic impact on Scientific-Atlanta’s net revenue or income from the sales of set-top 
+boxes to Adelphia because Adelphia would pay to Scientific-Atlanta an amount equal to the 
+marketing support payments in the form of a price increase applied to each set-top box that 
+Adelphia purchased.  The parties ultimately agreed that the marketing support would average 
+approximately $20 per set-top box.  Based upon the number of boxes that Adelphia was required to 
+purchase, the marketing support came out to approximately $16.8 million for the year 2000 and 
+$22.4 million for the year 2001. 
+8. Several facts existed that, taken together, should have put Respondent on notice that 
+it was unlikely that Adelphia was using the marketing support agreement to market Scientific-
+Atlanta set-top boxes.  Respondent understood that the price increase was designed to ensure that 
+there would be no impact on Scientific-Atlanta’s net revenue or income.  As Principal Accounting 
+Officer, Respondent took steps to ensure that Scientific-Atlanta would not record any additional 
+revenue as a result of the price increase; instead, Scientific-Atlanta would record both the effect of 
+the price increase and the corresponding marketing support payments in revenue, resulting in no 
+net change in Scientific-Atlanta’s revenue from its sales to Adelphia.  Respondent also understood 
+that the marketing support transaction would likely be used to provide operating expense benefits 
+to Adelphia.  Adelphia demanded, and Scientific-Atlanta agreed, that the marketing support 
+ 4
+contracts apply retroactively to set-tops shipped during the period from April 2000 to December 
+2000.   
+The Year 2001 Modifications To The Marketing Support Agreement 
+9. In June 2001, Adelphia advised Scientific-Atlanta that it would be ordering fewer 
+set-top boxes than required by the long-term purchase agreement.  Because Adelphia would be 
+ordering fewer set-top boxes than previously agreed to by the parties, the prior price increase for 
+the set-top boxes would not be sufficient to cover Scientific-Atlanta’s marketing support payment 
+obligation of $22.4 million for the year 2001.  To ensure that Scientific-Atlanta’s marketing 
+support payment obligation equaled the amount of the overall price increase, Scientific-Atlanta 
+agreed to expand coverage of the marketing support arrangement beyond digital set-top boxes to 
+include price increases applied to Adelphia’s purchases of digital cable transmission equipment 
+from Scientific-Atlanta, retroactive to 2000.    
+10. In December 2001, Adelphia demanded an increase in the amount of marketing 
+support for 2001 from the previously agreed $22.4 million to between $28-29 million.   The parties 
+ultimately agreed that Scientific-Atlanta would pay $26.2 million in marketing support, which 
+covered set-tops purchased in 2001 and transmission equipment purchased between July 2000 and 
+December 31, 2001.   
+Respondent Approved Marketing Support Payments                                                        
+Without Any Documentation Of Marketing Done By Adelphia 
+11. On or about May 10, 2001, Respondent approved the first marketing support check 
+request in the amount of $16.8 million.  Respondent did not confirm that actual marketing was 
+being done prior to approving the check request.     
+12. In late 2001, Respondent recommended that the CFO approve payment of $26.2 
+million in marketing support for 2001.  Respondent did not confirm that actual marketing was 
+being done prior to recommending approval of that payment.  The CFO approved the payment, 
+based in significant part on Respondent’s recommendation. 
+Adelphia Misused The Marketing Support Transaction                                                             
+To Artificially Decrease Marketing Expenses And Increase EBITDA 
+13. In internal journal entries, Scientific-Atlanta recorded the price increases as an 
+increase in revenue and the marketing support payments to Adelphia as contra-revenue.  The net 
+result was no change in the revenue line item reported in Scientific-Atlanta’s publicly-filed income 
+statement.   
+14. Adelphia, however, recorded the marketing support payments as a contra-expense 
+to marketing costs.  This accounting treatment lowered the amount of recorded marketing expenses 
+and, in turn, artificially inflated Adelphia’s EBITDA.  Adelphia recorded the price increases paid 
+to Scientific-Atlanta as capital expenditures, which are depreciated over time and, as such, have no 
+impact on EBITDA and a minimal impact on earnings.  In total, over seven quarters from April 
+2000 through December 2001, Adelphia recorded improperly approximately $43 million in 
+ 5
+marketing support payments as reductions in current operating expenses, with the intended effect 
+of inflating improperly its reported EBITDA by $43 million over that period.    Adelphia’s 
+accounting treatment violated Generally Accepted Accounting Principles (“GAAP”) because it 
+improperly reflected the transaction as having substance when Adelphia did not make the 
+necessary marketing expenditures.   
+15. On March 27, 2002, approximately one month after Scientific-Atlanta paid 
+Adelphia $26.2 million for marketing support, Adelphia announced that the company was liable 
+for $2.3 billion in off-balance sheet liabilities.  On June 10, 2002, Adelphia filed a Form 8-K with 
+the Commission, making downward revisions of its 2000 and 2001 reported EBITDA, citing 
+improper accounting of marketing support agreements with two unnamed vendors (one of which 
+was Scientific-Atlanta).  Adelphia stated that properly accounting for the marketing support 
+agreements would reduce EBITDA by approximately $54 million in 2001 and $37 million in 2000, 
+of which $26.2 million and $16.8 million, respectively, is attributable to the transactions with 
+Scientific-Atlanta.   
+Legal Conclusions 
+16. The Exchange Act and Exchange Act rules require every issuer of registered 
+securities to file reports with the Commission that accurately reflect the issuer’s financial 
+performance and provide other true and accurate information to the public. 
+17. Adelphia violated Section 13(a) and Rules 13a-1, 13a-13 and 12b-20 by filing with 
+the Commission a Form 10-Q for each of the quarters from the fourth quarter of 2000 through the 
+fourth quarter of 2001, and a Form 10-K for the year ended December 31, 2000, each containing 
+materially false and misleading earnings in the financial statements for each reporting period. 
+18. Adelphia violated Sections 13(b)(2)(A) and 13(b)(2)(B) by improperly recording 
+the marketing support payments as a contra-expense to Adelphia’s marketing costs, and by 
+recording as capital expenditures the payments owed by Adelphia to Scientific-Atlanta under the 
+price increase provisions of the marketing support agreement.  Certain officers of Adelphia 
+knowingly falsified, and caused others to falsify, Adelphia’s books, records and accounts, 
+including the fraudulent journal entries of the price increases and marketing support payments.  In 
+doing so, each of them knowingly circumvented the internal accounting controls that existed at 
+Adelphia.  
+19. Section 21C of the Exchange Act provides that the Commission may issue a cease-
+and-desist order against a person who is “a cause of [another person’s] violation, due to an act or 
+omission the person knew or should have known would contribute to such violation.”2  Based on 
+the conduct described above, Respondent was a cause of Adelphia’s violations of Sections 13(a), 
+                                                 
+2  Where the primary violations underlying a finding that a person is “a cause of” violations 
+do not themselves require a finding of scienter, the standard of liability for being “a cause of” such 
+violations under Section 21C of the Exchange Act is negligence. See KPMG LLP v. SEC, 289 F. 
+3d 109, 112 (DC Cir. 2002). 
+ 6
+13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act and Rules 12b-20, 13a-1, and 13a-13 of the 
+Exchange Act.  
+IV. 
+ In view of the foregoing, the Commission deems it appropriate and in the public interest to 
+impose the sanction agreed to in Respondent’s Offer. 
+ Accordingly, pursuant to Section 21C of the Exchange Act, it is hereby ORDERED that: 
+A. Respondent cease and desist from causing any violations and any future violations 
+of Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act and Rules 12b-20, 13a-1, and 
+13a-13 thereunder.  
+ 
+ 
+ By the Commission. 
+ 
+ 
+       N a n c y  M .  M o r r i s  
+       S e c r e t a r y