UNITED STATES OF AMERICA Before the SECURITIES AND EXCHANGE COMMISSION SECURITIES EXCHANGE ACT OF 1934 Release No. 41144 / March 5, 1999 ACCOUNTING AND AUDITING ENFORCEMENT Release No. 1114 / March 5, 1999 ADMINISTRATIVE PROCEEDING File No. 3-9844 : : In the Matter of : ORDER INSTITUTING PUBLIC : PROCEEDINGS AND OPINION ANDREW L. O’CONNELL, CPA : AND ORDER PURSUANT TO RULE : 102(e) OF THE COMMISSION’S Respondent : RULES OF PRACTICE : I. The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest that public administrative proceedings be, and hereby are, instituted against Andrew L. O’Connell ("O’Connell"), a certified public accountant, pursuant to Rule 102(e)(3) of the Commission’s Rule of Practice.[1] II. In anticipation of the institution of these public administrative proceedings, O’Connell has submitted an Offer of Settlement which the Commission has determined to accept. Solely for the purposes 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, except that he admits to the Commission’s finding that a Final Judgment of Permanent Injunction ("Final Judgment") has been entered against him as set forth in Section III.C., and admits the jurisdiction of the Commission over him and over the subject matter of this proceeding, O’Connell consents to the entry of this Order Instituting Public Proceedings and Opinion and Order Pursuant to Rule 102(e) of the Commission’s Rules of Practice ("Order"). III. On the basis of this Order and O’Connell’s Offer of Settlement, the Commission makes the following findings: A. O’Connell, age 44, is and has been a certified public accountant licensed to practice in Florida since 1979. He was the principal financial and accounting officer of Laser Photonics, Inc. ("LPI"). O’Connell has practiced before the Commission within the meaning of Rule 102(f) of the Commission’s Rules of Practice in connection with the preparation of LPI’s financial statements and other documents. B. LPI is a Delaware corporation that manufactures and markets medical and scientific laser systems. During the relevant time period, LPI’s principal executive offices were located in Orlando, Florida, and its common stock was registered with the Commission pursuant to Section 12(g) of the Securities Exchange Act of 1934 ("Exchange Act") and traded on NASDAQ. Reorganized in 1995 as a result of bankruptcy proceedings, LPI’s stock now trades over-the-counter on the OTC Bulletin Board. C. On September 30, 1997, the Commission filed a complaint against O’Connell and others in Securities and Exchange Commission v. Mark T. Fukuhara, et al. ("SEC v. Fukuhara"), M.D. Fla., Civil Action No. 97-1191-CIV-ORL-18. On December 22, 1998, O’Connell consented to the entry of a Final Judgment against him in SEC v. Fukuhara, without admitting or denying the allegations in the complaint, except subject matter jurisdiction, which O’Connell admitted. On February 26, 1999, the United States District Court for the Middle District of Florida entered the Final Judgment, which permanently enjoins O’Connell from violating Section 17(a) of the Securities Act of 1933 ("Securities Act"), Sections 10(b) and 13(b)(5) of the Exchange Act and Rules 10b-5, 13b2-1 and 13b2-2 promulgated thereunder, and further enjoins him from aiding and abetting violations of Section 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Rules 12b-20, 13a-1 and 13a-13 thereunder. D. The Commission’s complaint in SEC v. Fukuhara alleges, among other things, that in 1992 and 1993 O’Connell participated in a scheme to defraud investors by causing LPI to materially inflate its revenues and profits by recording false sales on its books, and by improperly recording future sales in current periods. The inflated revenues and profits were reported in LPI's Form 10-K for the year ended December 31, 1992, and a Form S-1 dated June 30, 1993, and caused the audited financial statements in these documents to be materially false and misleading. The complaint also alleges that, to avoid detection of the scheme, O’Connell actively deceived LPI’s independent auditors by forging, altering and concealing corporate records, and by procuring false audit confirmations and other misleading statements from certain of LPI’s customers. According to the complaint, O’Connell knew that the financial statements incorporated into LPI’s Form 10-K for 1992, Forms 10-Q for the first and second quarters of 1993, and the Form S-1 dated June 30, 1993, each of which was signed by O’Connell and filed with the Commission, were materially false and misleading as a result of his conduct. IV. Based on the foregoing, the Commission deems it appropriate and in the public interest to accept the Offer of Settlement submitted by O’Connell and accordingly, IT IS HEREBY ORDERED, effectively immediately, that: A. O’Connell is denied the privilege of appearing or practicing before the Commission as an accountant. B. After five years from the date of this Order, O’Connell may apply to the Commission by submitting an application to the Office of the Chief Accountant which requests that he be permitted to resume appearing or practicing before the Commission as: 1. a preparer or reviewer, or a person responsible for the preparation or review, of financial statements of a public company to be filed with the Commission upon submission of an application satisfactory to the Commission in which O’Connell undertakes that, in his practice before the Commission, his work will be reviewed by the independent audit committee of the company for which he works or in some other manner acceptable to the Commission; 2. an independent accountant upon submission of an application containing a showing satisfactory to the Commission that: a. O’Connell, or any firm with which he is or becomes associated with in any capacity, is and will remain a member of the SEC Practice Section of the American Institute of Certified Public Accountants Division for CPA Firms ("SEC Practice Section") as long as he appears or practices before the Commission as an independent accountant; b. O’Connell, or the firm, has received an unqualified report relating to his or the firm’s most recent peer review conducted in accordance with the guidelines adopted by the SEC Practice Section; and c. O’Connell will comply with all applicable SEC Practice Section requirements, including all requirements for periodic peer reviews, concurring partner reviews, and continuing professional education, as long as he appears or practices before the Commission as an independent accountant. 3. The Commission's review of any request or application by O’Connell to resume appearing or practicing before it may include, in addition to the matters referenced above, of any other matters relating to O’Connell’s character, integrity, professional conduct, or qualifications to appear or practice before the Commission. By the Commission. Jonathan G. Katz Secretary **FOOTNOTES** [1]: Paragraph (3) of Rule 102(e) provides, in relevant part, that: ...(i) The Commission, with due regard to the public interest...may...suspend from appearing or practicing before it any...accountant...who has been by name...permanently enjoined by any court of competent jurisdiction, by reason of his or her misconduct in an action brought by the Commission, from violating or aiding and abetting the violation of any provision of the Federal securities laws or of the rules and regulations thereunder.