UNITED STATES SECURITIES AND EXCHANGE COMMISSION

          Litigation Release No. 15919 / September 30, 1998

          Accounting and Auditing Enforcement
          Release No. 1083 / September 30, 1998

          SECURITIES AND EXCHANGE COMMISSION v STEVEN J. HENKE AND CHAN M.
          DESAIGOUDAR, United States District Court for the Northern
          District of California, Civil Action No. 98-21004 JF.

               The Securities and Exchange Commission today announced the
          filing of a lawsuit against two former top officers of California
          Micro Devices Corporation for illegal insider trading and
          financial reporting fraud.  The Commission filed its complaint in
          the Northern District of California on September 30, 1998,
          against Chan M. Desaigoudar, a resident of Los Gatos, California
          and the former chairman and chief executive officer of Cal Micro,
          and against Steven J. Henke, a resident of Danville, California
          and the company's former treasurer and principal financial
          officer.

               The Commission's complaint alleges that throughout Cal
          Micro's fiscal year ended June 30, 1994, Desaigoudar and Henke
          artificially inflated the company's publicly reported revenue by,
          among other things, directing employees to generate shipping
          invoices indicating that product had been shipped to customers
          when, in fact, the product had not been shipped or, in most
          cases, even manufactured.  As a result, Cal Micro's financial
          statements, as incorporated in its quarterly reports on Form 10-Q
          for at least the third fiscal quarter of 1994 and its annual
          report on Form 10-K for the fiscal year ended June 30, 1994, were
          materially false and misleading.

               The complaint also alleges that Desaigoudar and Henke
          engaged in illegal insider trading by selling Cal Micro stock in
          the fourth quarter of fiscal year 1994 while knowing that the
          company had falsified its books and records, circumvented its
          internal accounting controls, and artificially inflated its
          reported revenues.  By trading either in their brokerage accounts
          or in Cal Micro's  401(k) plan, Desaigoudar and Henke illegally
          avoided losses of approximately $444,175 and $469,020,
          respectively.

               Between August 4, 1994 and January 10, 1995, Cal Micro
          issued a series of press releases describing the fraud and its
          impact on the company's financial results, which allegedly caused
          the price of Cal Micro's common shares to drop from approximately
          $22 to $3.88 per share.  The company restated its results for
          fiscal year 1994 on February 6, 1995, restating product revenue
          from $38.3 million to $22.4 million.  On July 15, 1998, after a
          five week jury trial in the Northern District of California,
          Desaigoudar and Henke were convicted of criminal conspiracy,
          securities fraud, filing false statements with the Commission,
          and insider trading.

               In its complaint, the Commission seeks disgorgement of the
          losses Desaigoudar and Henke avoided by their illegal insider
          trading, civil penalties for insider trading and financial
          reporting fraud, and orders from the court barring Desaigoudar
          and Henke from serving as an officer or director of a public
          company.  The Commission also seeks orders from the court
          permanently enjoining Desaigoudar and Henke from violations of
          Section 17(a) of the Securities Act of 1933, Sections 10(b),
          13(a), 13(b)(2)(A), 13(b)(2)(B) and 13(b)(5) of the Exchange Act
          of 1934 and Rules 10b-5, 12b-20, 13a-1, 13a-13, 13b2-1 and 13b2-2
          thereunder.

               The Commission has previously filed settled enforcement
          actions against four former Cal Micro officers, including the
          Company's former president, its former chief accounting officer,
          and two former vice-presidents of production.  For additional
          information, see Litigation Release No. 15846 (August 12, 1998),
          No. 15690 (March 31, 1998), and No. 14776 (January 4, 1996); and
          Accounting and Auditing Enforcement Release No. 1066 (August, 12,
          1998), No. 1022 (March 31, 1998), and No. 750 (January 4, 1996).