Netopia Proposes SEC Settlement

Netopia announces proposed settlement with the SEC

July 22, 2005

2 Min Read

EMERYVILLE, Calif. -- Netopia, Inc. (Pink Sheets:NTPA)(the "Company"), today announced that it has submitted an offer of settlement to the staff of the Division of Enforcement ("SEC staff") of the Securities and Exchange Commission, to resolve a pending, previously-disclosed investigation into the Company's disclosures and accounting practices, primarily related to the Company's restatement of its financial statements for the fiscal years ended September 30, 2003 and 2002.

Following discussions with the SEC staff, the Company made an offer of settlement to the SEC staff in order to resolve this matter. The Company, without admitting or denying any wrongdoing, offered to consent to the entry of an order with respect to violations of Sections 13(a) and 13(b)(2)(A)-(B) of the Securities Exchange Act of 1934, as amended, and Rules 12b-20, 13a-1, 13a-11 and 13a-13 promulgated thereunder. The SEC staff has agreed to recommend that the Securities and Exchange Commission approve the offer of settlement. The Company has been cooperating fully with the SEC staff throughout the course of their investigation. The proposed settlement is subject to completion of mutually agreeable settlement language and final approval by the Securities and Exchange Commission.

The Company also understands that the SEC staff has agreed to recommend that the Securities and Exchange Commission approve an offer of settlement with Alan B. Lefkof, the Company's President and Chief Executive Officer. Mr. Lefkof, without admitting or denying any wrongdoing, offered to consent to the entry of an order with respect to violations of Sections 17(a)(2)-(3) of the Securities Act of 1933, as amended, and Rule 13b2-1 promulgated under the Securities Exchange Act of 1934, as amended, and aiding and abetting the Company's violations of Sections 13(a) and 13(b)(2)(A)-(B) of the Securities Exchange Act of 1934, as amended, and Rules 12b-20 and 13a-11 promulgated thereunder, in connection with a Report on Form 8-K and exhibit furnished to the Securities and Exchange Commission on July 6, 2004. The proposed settlement contemplates a monetary payment. The proposed settlement is subject to completion of mutually agreeable settlement language and final approval by the Securities and Exchange Commission.

The Company also has been informed that the SEC staff has issued "Wells Notices" to a former chief financial officer and a former senior sales vice president of the Company. A "Wells Notice" indicates that the SEC staff has made a preliminary decision to recommend that the Securities and Exchange Commission bring a civil enforcement action against the recipients for possible violations of federal securities laws. Recipients of Wells Notices have the opportunity to respond in writing before the SEC staff makes its formal recommendation on whether the Securities and Exchange Commission should bring any action.

Netopia Inc.

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