SEC Charges Former Expanets Officers with Accounting Fraud

The SEC yesterday filed actions against two former officers of Expanets, Inc. ("Expanets"), a former Colorado-based telecommunications subsidiary of NorthWestern Corporation ("NorthWestern"). The Commission's complaints allege that John C. Charters, Expanets' former chief executive officer, and Richard E. Fresia, Expanets' former chief financial officer, overstated the performance of Expanets in 2002 during the same period that NorthWestern completed securities offerings totaling more than $800 million. The Commission's complaints further allege that, after restating its financial results for the first three quarters of 2002, and disclosing Expanets' true financial position and results of operations, NorthWestern declared bankruptcy in 2003.  Charters consented to the entry of a final judgment permanently enjoining him from violating or aiding and abetting violations of the provisions he allegedly violated, and also consented to pay $50,000 in civil penalties.