U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 20114 / May 14, 2007

Accounting and Auditing Enforcement Release No. 2609 / May 14, 2007

SEC v. Gayle Spence Luacaw, Civil Action No. 07-cv-00037 (D.N.H.)

Permanent Injunction and Order of Disgorgement Entered As To Gayle Spence Luacaw

The Securities and Exchange Commission announced today that on May 10th the United States District Court for the District of New Hampshire entered a settled Permanent Injunction and Order of Disgorgement as to Gayle Spence Luacaw, and a final judgment on May 14, 2007. Pursuant to the settlement, Luacaw, without admitting or denying the allegations of the Commission's complaint, consented to an injunction against future violations of Section 17(a) of the Securities Act of 1933 and Sections 10(b) and 13(b)(5) of the Securities Exchange Act of 1934 (Exchange Act) and Rules 10b-5, 13b2-1 and 13b2-2 thereunder; and from aiding and abetting any violation of Sections 13(a) and 13(b)(2)(A) of the Exchange Act and Rules 12b-20, 13a-1, 13a-11 and 13a-13 thereunder. Under the settlement, Luacaw also agreed to pay disgorgement plus prejudgment interest.

According to the Commission's complaint, from March 2000 through December 2001, Luacaw, a former vice president for the Executive Office of the President for Enterasys Networks, Inc., participated in a company-wide scheme to fraudulently inflate revenues at Enterasys and its former parent company, Cabletron Systems, Inc., and thereby convince the market that Enterasys was a viable independent company with consistently strong revenue growth.

Related Actions
Luacaw pled guilty to one count of conspiracy to commit securities fraud and cooperated with the U.S. Attorney's Office for the District of New Hampshire in the prosecution of U.S. v. Barber et al., Criminal No. 04-126 (D.N.H.).

For further information, see LR-19998 (February 12, 2007).