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Y2K software firm sued

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Jan. 13, 2000, 1 a.m. |
While Ukraine is proudly boasting of effectively subduing the millennium bug, U.S. investigators are trying to find out if Y2K software purchased with U.S. government money for the country's nuclear power plants was itself faulty. U.S. federal courts are presently hearing a lawsuit, which was filed by the U.S. Securities & Exchange Commission in October against the Denver-based computer company Accelr8 Technology Corp. The SEC claims that Accelr8 misrepresented the capabilities of its software, which the U.S. Department of Energy had bought for checking nuclear power plants in Ukraine, Lithuania and Russia for possible Y2K-related malfunctions. In addition, the agency seeks monetary penalties from the three named defendants and an injunction against future violations of anti-fraud provisions of federal securities laws. 'This is an investigation we wrapped up very quickly, within a couple of months, because of our concerns with the Y2K program,' said SEC spokesman Dan Shea, on Nov. 22. The SEC alleges Accerl8, its chairman, Thomas V. Geimer, and President Harry J. Fluery, misled the public, including investors, about the usefulness of the company's Year 2000 software tools through marketing materials, press releases and commission reports issued from 1997 through 1999. Accelr8's CEO, Thomas Geimer, called the charges 'extremely upsetting' and threatened to counter-sue the government. 'Many people read a story about the SEC filing a suit and come to the conclusion you did something wrong or they wouldn't have sued you,' Geimer told the Denver Post on Nov. 17. The NASDAQ stock exchange created more problems for Accelr8 the same month, halting trading on its stock after citing the company's failure to provide required financial information. Accelr8's stock value spiraled downward over 1999, shedding over 75 percent of its value before exchange authorities stopped trading in the issue on Nov 16. It was Accelr8's Navig8 2000 tool that the Department of Energy had selected and bought last summer for analyzing time and date sensitive programs running in Ukrainian nuclear power plant computers. Computer World Magazine quoted Geimer as saying in November that the Department of Energy had spent $412,000 in license fees for Accelr8's allegedly buggy software. The Navig8 2000 tool was purchased after Ukrainian and American officials demonstrated it to Ukrainian, Russian and Lithuanian nuclear power plant specialists during a specially organized seminar in Kyiv last July. The project was part of a larger effort by Western governments to help Ukraine deal with the Y2K problem which was taken in response to growing international fears that the cash-strapped country wouldn't muster the necessary resources to address the issue properly on its own. Ukraine's nuclear power plants, especially the troubled Chernobyl plant, were a source of major concern. Some Western media did not hesitate to warn that a disruption at any of the facilities might result in an accident like the 1986 explosion of a reactor at Chernobyl, the world's worst civil nuclear disaster. Ukrainian official steadfastly downplayed the fears, but did not object to receiving some $2 million in Western aid targeted specifically at accelerating the inventory of digital systems at their nuclear power plants. Hundreds of thousands of dollars allocated for the inter-governmental Science and Technology Center's (STC) Y2K Program was spent by DOE to license Accelr8's Navig8 2000 software. Although computer engineers noted numerous and substantive deficiencies in the Accelr8 software, particularly its inability to process code written in Cyrillic, their critique, as well as formal negative evaluations submitted to the STCU earlier by Ukrainian specialists, were not enough to prevent the Department of Energy from purchasing a license to use the software tool in Ukraine. American and Ukrainian officials have since been tight-lipped on the issue, and it still remains unclear how the Navig8 2000 tool has been actually employed by Ukraine's five nuclear power facilities. All of them, however, say they have successfully passed the Y2K test, reporting no disruptions during the rollover from Dec. 31 and in the following days. A Department of Energy official, who asked for anonymity, provided the Post with information acknowledging that the Navig8 2000 tool had problems in processing the Cyrillic alphabet, but said Accelr8 quickly modified the software to handle code written in Cyrillic. Accelr8's Geimer, according to recent reports, also has not recognized the allegations made by Ukrainian computer experts and the U.S. Securities & Exchange Commission. 'The SEC's statements are libelous, and I am going to sue them,' he told Computer World Magazine.
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