Judge approves Cabletron settlement

U.S. District Court Judge Steven J. McAuliffe last Friday approved settlement terms involving four former top executives with the former Cabletron Systems, who had faced civil fraud charges, allowing them to pay less than a million dollars for their involvement in a scheme that involved tens of millions of dollars in inflated revenue and sent lesser executives to jail.Without comment, McAuliffe approved the settlements for Cabletron’s CEO Piyush G. Patel ($236,989); CFO David J. Kirkpatrick ($349,346); the comptroller of Cabletron spinoff Enterasys Networks, Lawrence Collins ($24,444); and Michael A. Skubisz ($57,056), former CEO of Aprisma Technologies, another Cabletron spinoff.The settlement amounts included fines and “disgorgement,” a term usually associated with ill-gotten gains, but there is no admission or denial of guilt in the settlement.The four were accused of being involved in a scheme to inflate revenue at Cabletron and its spinoffs. But all the penalties were minuscule compared with those given to four lower figures in the scandal – all associated with Enterasys – who were sentenced federal prison sentences ranging from three to 10 1/2 years.Left out of the settlement was Eric Jaeger – Cabletron’s former chief counsel — who, along with Patel and Kirkpatrick were ringleaders of the scheme, according to the SEC complaint.Also not included was Jerry Shanahan, Cabletron’s former chief operating officer and a defendant in the criminal trial. The jury could not reach a verdict on Shanahan, and the charges were eventually dropped. The SEC appears to be moving ahead with civil charges on those two. — BOB SANDERS/NEW HAMPSHIRE BUSINESS REVIEW