U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 19025 / January 6, 2005

Accounting and Auditing Enforcement
Release No. 2162 / January 6, 2005

Securities and Exchange Commission v. Nancy R. Gazzigli, United States District Court for the District of Columbia, Civil Action No. 1:05CV00013

SEC CHARGES FORMER EXECUTIVE VICE PRESIDENT OF BROADVISION, INC. WITH ACCOUNTING FRAUD

The Securities and Exchange Commission today announced the filing of a complaint in the United States District Court for the District of Columbia alleging that Nancy R. Gazzigli, age 52, of Redding, California, committed accounting fraud by engaging in misconduct that led BroadVision, Inc. to improperly recognize $3.75 million of software license revenue during September 2001. At the time, Gazzigli was the company's Executive Vice President and General Manager of Worldwide Products and Services.

The complaint alleges that BroadVision entered into a contract to sell software licenses and related engineering and consulting services to a large retail chain. According to the complaint, in order to circumvent accounting rules that prohibited immediate recognition of the full contract amount, Gazzigli falsely informed BroadVision's accountants that part of the agreement had been cancelled; she subsequently provided forged documents to the company's auditors to cover up the misrepresentations that she had made. As a result of Gazzigli's misconduct, BroadVision improperly recognized $3.75 million of revenue from the transaction, overstating its third quarter 2001 software license revenue by 23.5% and its total revenue by 7.9%. Thereafter, BroadVision issued an earnings press release and filed a quarterly report with the Commission, both of which were materially false and misleading.

Without admitting or denying the allegations in the complaint, Gazzigli consented to the entry of a final judgment that permanently enjoins her from violating Sections 10(b) and 13(b)(5) of the Securities Exchange Act of 1934 and Rules 10b-5, 13b2-1 and 13b2-2 thereunder, and 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. She also agreed to be permanently barred from serving as an officer or director of a public company and to pay a $40,000 civil penalty.

In a related enforcement action announced today, the Commission instituted a settled cease-and-desist proceeding against BroadVision. The company consented to the entry of the order instituting proceedings without admitting or denying the findings therein, including findings that BroadVision issued a false and misleading earnings press release and filed a false and misleading quarterly report with the Commission, as a result of the conduct described above. The Order requires BroadVision to cease and desist from committing or causing violations of the antifraud provisions of the federal securities laws, Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, as well as the reporting, books and records, and internal controls provisions, Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Rules 12b-20 and 13a-13 thereunder. (Rel. No. 34-50987; File No. 3-11791).

SEC Complaint in this matter

http://www.sec.gov/litigation/litreleases/lr19025.htm