Two former senior executives of an aircraft communications manufacturer agreed to settle SEC charges of knowingly violating the internal controls and books and records provisions of the federal securities laws, and causing similar violations by the company.

According to the SEC Order, then-CEO and President of Panasonic Avionics Corporation ("PAC"), Paul A. Margis allegedly participated in a plan in which PAC offered a consulting position to a government official who helped PAC retain business from a state-owned airline. The SEC claimed that Mr. Margis allowed PAC to offer the official a consulting position and, ultimately, PAC retained the government official by paying $875,000 for his position through a third-party vendor. The SEC alleged that Mr. Margis and others also authorized payments of over $900,000 through the third-party vendor for the retention of two other individuals as consultants. The SEC further alleged that Mr. Margis misled PAC's external auditors by falsely stating that it did not have deficiencies with respect to its internal financial controls. As a result of his conduct, the SEC found that Mr. Margis knowingly evaded PAC's internal accounting controls system and also falsified PAC's books and records. The SEC further found that Mr. Margis caused PAC to violate the books and records and internal accounting controls provisions.

According to the SEC Order, then-CFO of PAC, Takeshi Uonaga provided a letter to PAC's external auditors, which falsely stated that PAC's financial statements for the third quarter had been prepared in adherence with audit standards, and that no deficiencies concerning PAC's internal accounting controls and books and records existed. The SEC found that Mr. Uonaga knowingly evaded PAC's internal accounting controls regarding revenue recognition and caused the company to falsely record revenue on its books and records, failed to maintain internal accounting controls, and filed a false report to the SEC.

To settle the charges, Mr. Margis agreed to pay $75,000, and Mr. Uonaga agreed to pay $50,000. The Order against Mr. Uonaga also suspends him from appearing or practicing before the SEC as an accountant, with a right to apply for reinstatement after five years. Mr. Margis and Mr. Uonaga consented to the entry of the Orders without admitting to or denying the findings.

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