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         UNITED STATES SECURITIES AND EXCHANGE COMMISSION


Litigation Release No. 14946 / June 12, 1996
Accounting and Auditing Enforcement Release No. 793 / June 12,
1996 

SEC v. Network Equipment Technologies, Inc., 
Civil Action No. C-95-0784-SBA (N.D. Cal.)
  
   The Securities and Exchange Commission today announced that on
March 30, 1995, the Honorable Saundra B. Armstrong, United States
District Court Judge for the Northern District of California,
entered a Final Judgment against defendant Network Equipment
Technologies, Inc., ("NET").  The judgment permanently enjoins
NET from 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 and 13a-13 promulgated thereunder.  

     The Commission's Complaint, filed on March 7, 1995, alleged
that NET filed with the Commission reports that included
financial statements which materially misstated revenues, net
income and related captioned items for the periods ended
September 31, 1989 and December 31, 1989. 
  
   The Complaint further alleged that NET's materially inaccurate
financial reports resulted from an inadequate internal accounting
control system that improperly gave substantial authority and
control over revenue recognition to the sales division, and
allowed the company to recognize revenue on shipments for which
there were no purchase orders, no binding contracts, and no
authorization for shipment by the customer, and further allowed
the company to prematurely recognize other revenue.  The
Complaint further alleged that, as a result, NET failed to
maintain accurate books and records as required under the federal
securities laws.