SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.

Litigation Release No. 17115 / September 5, 2001

Accounting and Auditing Enforcement Release No. 1436 \ September 5, 2001

SEC SETTLES CIVIL INJUNCTIVE ACTION AGAINST THREE FORMER OFFICIALS OF SPECTRUM INFORMATION TECHNOLOGIES, INC.

SEC v. Peter T. Caserta, Salvatore Marino and Dana C. Verrill, U.S. District Court for the Eastern District of New York, Civil Action No. 97-CV-7091.

The Securities and Exchange Commission announced today that it has accepted offers of settlement from three former officials of Spectrum Information Technologies, Inc., Peter T. Caserta (former president and chief executive officer), Salvatore Marino (former chief financial officer) and Dana C. Verrill (former chairman of the board of directors), to resolve a previously-filed civil injunctive action. The Commission's complaint, filed in the U.S. District Court for the Eastern District of New York on December 3, 1997, alleges that Caserta and Marino engaged in a fraudulent scheme to inflate Spectrum's financial results and stock price. According to the complaint, at the direction of Caserta and Marino, Spectrum made false statements to the press, and improperly accounted for certain licensing agreements in its filings with the Commission, thereby misleading investors into thinking that Spectrum had earned millions of dollars in licensing fees and as a result, had experienced its first two consecutive profitable quarters. In addition, the complaint alleges that Caserta falsely stated to the press that an agreement with AT&T was worth "hundreds of millions of dollars." The complaint further alleges that Caserta and Marino profited from the scheme by selling large amounts of Spectrum stock at inflated prices while in possession of this material non-public information. The complaint also alleges that Caserta and Verrill devised a scheme that enabled Spectrum to improperly funnel large blocks of unregistered Spectrum stock to the public through the company's employee stock option plan. The Commission's litigation release announcing the filing of the complaint can be found at www.sec.gov/litigation/litreleases release no. 15578.

Without admitting or denying the allegations in the complaint, Caserta, Marino and Verrill each consented to the entry of final judgments permanently enjoining them from violating and/or aiding and abetting violations of the federal securities laws, and ordering them to pay disgorgement, interest and/or civil penalties. Caserta was enjoined from violating Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rules 10b-5 and 13b2-1 thereunder and from aiding and abetting violations of Sections 13(a) and 13(b)(2)(A) of the Exchange Act and Rules 13a-13 and 12b-20 thereunder. In addition, Caserta was ordered to pay disgorgement, interest and penalties totaling $772,638, and was permanently barred from serving as an officer or director of a publicly traded company. Marino was enjoined from violating Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rules 10b-5 and 13b2-1 thereunder and from aiding and abetting violations of Sections 13(a) and 13(b)(2)(A) of the Exchange Act and Rules 13a-13 and 12b-20 thereunder. In addition, Marino was ordered to pay disgorgement, interest and penalties totaling $301,792, and he was barred from serving as an officer or director of a publicly traded company for a period of five years. Marino also agreed to the entry of an administrative order pursuant to Commission Rule 102(e) that suspends him from appearing or practicing before the Commission as an accountant. Under the terms of the settlement, Caserta and Marino will receive credit for previous payments made to Spectrum shareholders in private litigation. Verrill was enjoined from violating Sections 5(a) and 5(c) of the Securities Act, and he consented to pay a civil penalty of $25,000.