SEC Ponders Suit Against RSA

RSA, based here, disclosed the possible litigation in an Aug. 14 10-Q filing.

SEC officials said the company and some of its officers could submit a written statement explaining why no such proceeding should be initiated. The company intends to submit such a statement, RSA executives said.

An RSA spokesman said the company is in the process of writing the statement but didn't know when it will be released.

On Jan. 23, the SEC notified RSA it was investigating the vendor's disclosure that it was changing its method for estimating distributor revenue in the first quarter of 2001 as well as trading in its common stock.

In April, the vendor announced a restructuring, which included cutting about 200 employees, or about 17 percent of its workforce worldwide.

In July, the company blamed continued weak IT spending for its second-quarter loss and named a new CFO.

Gary Fish, president and CEO of Kansas City, Mo.-based FishNet Security, said none of his customers have questioned RSA's recent SEC disclosure.

"Because in the strong authentication space, RSA is really the only company that provides the two-factor authentication tokens," he said. "In other spaces, competitors really use this type of information to gain a competitive advantage."

FishNet Security is positioned to sell more RSA products this year than last year, he added.