On July 2, 2013, the SEC reached a settlement with the former CFO of Digi International, Inc. (“Digi”), in which the former CFO was barred for a period of five years from serving as an officer or director of a public company and imposed civil penalties of $60,000 for allegations concerning the CFO’s evasion of Digi’s internal controls over travel and entertainment expenses. SEC v. Krishnan, SEC Litigation Release No. 22,741 (D. Minn. July 2, 2013) (No. 12-CV-2495). In the underlying civil enforcement action, the SEC alleged that the former CFO engaged in a course of conduct to reimburse Digi’s employees, including the former CFO, for improper travel and entertainment expenses. In addition, the former CFO evaded an internal control that required his expense reports to be reviewed and approved by Digi’s CEO by routing his expense reports through a foreign office. As a result, the SEC alleged: (i) corporate funds were used to pay for unauthorized travel and entertainment expenses; (ii) the former CFO’s authorization of these expenses caused the Company to file inaccurate reports; (iii) the failure to enforce Digi’s internal controls, demonstrated a lack of management integrity; and (iv) the former CFO “wrongly certified” the effectiveness of Digi’s internal controls. In addition to the settlement of the civil enforcement action, the former CFO settled an administrative proceeding under SEC Rule of Practice 102(e), whereby he was suspended from appearing or practicing as an accountant before the Commission for five years.