PARADYNE &lt;PDN> PLEADS GUILTY TO CRIMINAL CHARGE

  Paradyne Corp said it pleaded guilty
  to criminal charges of conspiracy to defraud the Social
  Security Administration and agreed to pay 1.2 mln dlrs in fines
  and costs to the U.S. Government.
      The company also reached agreements in principle for an 8.1
  mln dlr settlement of class action law suits.
      About 2.9 mln dlrs of the class action settlement will be
  provided by Paradyne's insurance carrier. The settlement is
  contingent on court approval after notice to class members, it
  said.
       The criminal case settlement dismisses all charges
  including bribery and false statement, except for conspiracy to
  which Paradyne pleaded guilty.
      The criminal settlement includes the lifting of the
  government's suspension, the dismissal of the federal civil
  false claims suit and all charges against the individuals.
      Of the 2.9 mln dlrs the insurance carrier will provide for
  the civil settlement, 750,000 dlrs will go to settle a
  derivative lawsuit.
      For the year ended December 31, Paradyne reported a net
  loss of 38.5 mln dlrs. The year-end results include an 8.0 mln
  dlrs provision for future legal and or settlement costs to
  cover the civil and criminal settlements announced today.
      Paradyne also said it named Jerry Kendall as president and
  chief executive officer, succeeding Robert Wiggins who resigned
  as chairman and chief executive officer as part of the
  settlement of the indictment.
      Kendall formerly served as executive vice president and
  chief operating officer.
      The company also said that due to the sluggish marketplace,
  it does not expect to be profitable in the first quarter but is
  optimistic about the outlook for the year.
      For the first quarter of 1986, the company reported net
  income of 875,000 dlrs on sales of 66.0 mln dlrs.
      Wiggins was among five Paradyine executives who were
  charged along with three former officers in a 1985 federal
  indictment stemming from a 115 mln contract awarded to Paradyne
  in 1981 to build a computer network for the Social Security
  Administration.
      The men were accused of conspiring to bribe government
  officials and defaud the Social Security Administration.
  Wiggins and other defendants were also charged with providing
  false testimony and obstructing justice during a Securities and
  Exchange Commission investigation.
   
     Under the settlement announced today, federal prosecutors
  agreed to defer all charges against Wiggins and three other
  defendants under a one-year pretrial agreement.
      The charges would then be dropped if the defendants
  successfully complete the probation period. Details of the
  requirements in the agreement were not immediately available.
  

