UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION

Securities Exchange Act of 1934
Release No. 50995 / January 7, 2005

Accounting and Auditing Enforcement
Release No. 2163 / January 7, 2005

Admin. Proc. File No. 3-11792

I.

The Securities and Exchange Commission ("Commission") deems it apprpriate that public administrative proceedings be, and hereby are, instituted against Ronald J. Hottovy, CPA ("Respondent" or "Hottovy") pursuant to Rule 102(e)(1)(iii) of the Commission's Rules of Practice.¹

II.

In anticipation of the institution of these proceedings, Respondent has submitted an Offer of Settlement (the "Offer") that 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, the subject matter of these proceedings, and the findings contained in Section III. 1, 2 and 3 below, which are admitted, Respondent consents to the entry of this Order Instituting Public Administrative Proceedings Pursuant to Rule 102(e)(1)(iii) of the Commission's Rules of Practice, Making Findings, and Imposing Remedial Sanctions ("Order"), as set forth below.

III.

On the basis of this Order and Respondent's Offer, the Commission finds that:

1. Hottovy is a Certified Public Accountant in the State of Colorado, but does not hold a license. During the period from approximately December 1991 through April 1996 (the "relevant period"), Hottovy was employed as the Chief Financial Officer of Scientific Software-Intercomp, Inc. ("SSI").

2. SSI was a Colorado corporation, headquartered in Denver, Colorado. SSI developed, sold and provided software and consulting services for the oil and gas industry. SSI's common stock was registered with the Commission pursuant to Section 12(g) of the Securities Exchange Act of 1934 (Exchange Act) [15 U.S.C. § 781(g)] and during the relevant period was listed on NASDAQ. On September 11, 1997, the Commission filed a civil injunctive complaint in the United States District Court for the District of Columbia, captioned SEC v. Scientific Software-Intercomp, Inc., 97-CV-2091 (JGP) (D.D.C.), against SSI alleging violations of Section 17(a) of the Securities Act of 1933 (Securities Act) and Sections 10(b), 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Rules l0b-5, 12b-20, 13a-1, l3a-11 and l3a-13 thereunder. Simultaneous with the filing of the complaint, SSI consented, without admitting or denying the allegations of the complaint, to injunctive relief and agreed to restate its financial statements for the years ended December 31, 1993, 1994 and 1995.

3. On July 30, 1998, the Commission filed a civil injunctive complaint in the United States District Court for the District of Colorado, captioned SEC v. Ronald J. Hottovy, et al., (98-S-1636), against Respondent and others alleging violations of Section 17(a) of the Securities Act and Sections 10(b) and 13(b)(5) of the Exchange Act and Rules l0b-5, 13b2-1, and 13b2-2 thereunder. On January 10, 2003, after a federal jury found Hottovy liable on all counts before it, the United States District Court for the District of Colorado entered a Final Judgment of Permanent Injunction and Prohibition against Hottovy ("Judgment") which (a) permanently enjoins Hottovy from future violations of Sections 17(a)(1) and (3) of the Securities Act and Sections 10(b) and 13(b)(5) of the Exchange Act and Rules 10b-5, 13b2-1, and 13b2-2; and (b) prohibits Hottovy for a period of two years from acting as an officer or director of any issuer that has a class of securities registered pursuant to 15 U.S.C. § 78l or that is required to file reports pursuant to 15 U.S.C. §78o(d).

4. Beginning in at least 1992, and continuing until at least 1995, Hottovy willfully violated Sections 17(a)(1) and (3) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder by causing SSI to materially overstate its revenue and earnings by backdating or misdating contracts, booking revenue without contracts, overaccruing project revenues and providing confidential side letters modifying payment obligations. As a result of these practices, SSI reported materially false and misleading financial information in its Annual Reports for fiscal 1993 and 1994, its Quarterly Reports for the first three quarters of fiscal 1994 and the first quarter of fiscal 1995, and in its S-1 registration statement in June 1994. Further, Hottovy willfully violated Section 13(b)(5) of the Exchange Act and Rules 13b2-1 and 13b2-2 thereunder by making or causing the making of materially false and misleading accounting entries in SSI's books and records and providing false information to the company's independent auditors in connection with audits of SSI's financial statements.

IV.

In view of the foregoing, the Commission deems it appropriate to accept Hottovy's Offer of Settlement and hereby ORDERS, effective immediately, that:

A. Hottovy is denied the privilege of appearing or practicing before the Commission as an accountant for a period of five years.

B. After five years from the date of this order, Hottovy may request that the Commission consider his reinstatement by submitting an application (attention: Office of the Chief Accountant) to resume appearing or practicing before the Commission as:

1. a preparer or reviewer, or a person responsible for the preparation or review, of any public company's financial statements that are filed with the Commission. Such an application must satisfy the Commission that Respondent's work in his practice before the Commission will be reviewed either by the independent audit committee of the public company for which he works or in some other acceptable manner, as long as he practices before the Commission in this capacity; and/or

2. an independent accountant. Such an application must satisfy the Commission that:

The Commission will consider an application by Hottovy to resume appearing or practicing before the Commission provided that his state CPA license is current and he has resolved any and all other disciplinary issues with the applicable state boards of accountancy. However, if state licensure is dependent on the reinstatement by the Commission, the Commission will consider an application on its merits. The Commission's review may include consideration of, in addition to the matters referenced above, any other matters relating to Hottovy's character, integrity, professional conduct, or qualifications to appear or practice before the Commission.

By the Commission.

Endnotes

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¹ Rule 102(e)(1)(iii) provides, in relevant part, that:

The Commission may censure a person or deny, temporarily or permanently, the privilege of appearing or practicing before it in any way to any person who is found…to have willfully violated, or willfully aided and abetted the violation of any provision of the Federal securities laws or the rules and regulations thereunder.

http://www.sec.gov/litigation/admin/34-50995.htm