In re ASPEN TECHNOLOGY

                                                 UNITED                                                 STATES OF AMERICA 

                                                                     Before                                                                     the                                                                     

SECURITIES AND EXCHANGE COMMISSION 

SECURITIES ACT OF 1933 
Release No. 8827 / July 31, 2007 
SECURITIES EXCHANGE ACT OF 1934 
Release No. 56170 / July 31, 2007 
ACCOUNTING AND AUDITING ENFORCEMENT 
Release No. 2660 / July 31, 2007 
ADMINISTRATIVE PROCEEDING 
File No. 3-12718 
In the Matter of 
   ASPEN TECHNOLOGY, INC.,  
Respondent. 
ORDER INSTITUTING CEASE-AND-DESIST 
PROCEEDINGS, MAKING FINDINGS, AND 
IMPOSING A CEASE-AND-DESIST ORDER 
PURSUANT TO SECTION 8A OF THE 
SECURITIES ACT OF 1933 AND SECTION 
21C OF THE SECURITIES EXCHANGE ACT 
OF 1934 
I. 
The Securities and Exchange Commission (“Commission”) deems it appropriate that cease-
and-desist proceedings be, and hereby are, instituted pursuant to Section 8A of the Securities Act 
of 1933 (“Securities Act”) and Section 21C of the Securities Exchange Act of 1934 (“Exchange 
Act”), against Aspen Technology, Inc. (“Aspen” or “Respondent”). 
II. 
In anticipation of the institution of these proceedings, Respondent has submitted an Offer 
of Settlement (the “Offer”) which the Commission has determined to accept.  Solely for the 
purpose of these proceedings and any other proceedings brought by or on behalf of the 
Commission, or to which the Commission is a party, and without admitting or denying the findings 
herein, except as to the Commission’s jurisdiction over it and the subject matter of these 
proceedings, which are admitted, Respondent consents to the entry of this Order Instituting Cease-

and-Desist Proceedings, Making Findings, and Imposing a Cease-and-Desist Order Pursuant to 
Section 8A of the Securities Act and Section 21C of the Exchange Act (“Order”), as set forth 
below. 
III. 
On the basis of this Order and Respondent’s Offer, the Commission finds
1
 that: 
A.        SUMMARY        
1. From at least 1999 through 2002, Aspen -- often acting through its Chief Executive 
Officer (CEO), Chief Financial Officer (CFO) and Chief Operating Officer (COO) -- engaged in a 
scheme to fraudulently inflate revenues by improperly recognizing revenue on at least nineteen 
different software license transactions involving at least fifteen different customers world-wide.  
Motivated by a desire to boost revenues and meet securities analyst earnings expectations, Aspen’s 
CEO, CFO and COO were directly involved in negotiating and improperly recognizing revenue on 
certain of these transactions.  The scheme involved premature recognition of revenue where 
revenue was not recognizable under generally accepted accounting principles (“GAAP”) in the 
quarters claimed by Aspen either because contracts were not signed within the appropriate quarter 
or because the earnings process was incomplete due to side letters or other contingency 
arrangements.  In several reporting periods, Aspen would not have met analysts’ earnings 
expectations without the improperly recognized revenue.
2 
2. On March 15, 2005, Aspen restated its financial statements for fiscal years ended 
June 30, 2000 through June 30, 2004.  Among other things, the restatement revealed that Aspen 
had overstated previously reported license revenue for the fiscal year ended June 30, 2000 by 5.5% 
and for the fiscal year ended June 30, 2001 by 9.3%, resulting in net income dropping from $5.4 
million to a loss of $3.2 million for fiscal 2000 and increasing the previously reported loss for 
fiscal 2001 by $16 million.  
B.        RESPONDENT
            3.            Aspen
, a Delaware corporation based in Cambridge, Massachusetts, sells computer 
software used in chemical, petroleum and other industrial operations.  Aspen’s stock is registered 
with the Commission under Section 12(g) of the Exchange Act and trades on the NASDAQ 
National Market System.  Aspen reports its results of operations on a fiscal year basis ending on 
June 30. 
1 
The findings herein are made pursuant to Respondent's Offer of Settlement and are not binding 
on any other person or entity in this or any other proceeding. 
2 
From June 1, 2000 through May 9, 2002, Aspen financed six acquisitions through private placements of 
common stock exempt from registration under Section 4(2) of the Securities Act.  In addition, Aspen filed Forms S-
8 with the Commission to register shares in each of the years 2000, 2001 and 2004; those registration statements 
incorporated by reference the periodic reports discussed herein. 
2


C.        BACKGROUND        
License Revenue Fraudulently Recognized in the Fiscal Year Ended June 30, 1999 
4. On September 28, 1999, Aspen filed with the Commission its Form 10-K for the 
year ended June 30, 1999.  The financial statements in the Form 10-K overstated Aspen’s software 
license revenue for the quarter ended June 30, 1999 by 25% due to fraudulent accounting on two 
software license transactions.  As described below, Aspen’s CFO was directly involved in at least 
one of the transactions and was aware that recognition of revenue from that transaction was 
improper.   
5. In or about late June or early July 1999, Aspen’s outside auditor expressed concern 
that the terms of a $9.9 million software license agreement with a Texas-based oil company (“the 
Texas oil company”), would prevent Aspen from recognizing the revenue up front because the 
agreement included a requirement that Aspen provide additional, as yet undetermined, software 
products at no additional cost.  Under GAAP, revenue may not be recognized up-front where there 
is a future obligation to provide as yet undetermined products.  Aspen’s CFO, motivated by a 
desire to recognize the revenue up-front and thereby meet consensus analyst earnings expectations, 
evaded the auditor’s concerns by causing the sales documents to be revised to remove that 
provision and by putting the obligation to provide additional products into a separate side 
agreement, which she signed on August 20, 1999.  Aspen then improperly accounted for the 
license revenue up front: approximately $4.5 million was recorded in Aspen’s books and records 
and improperly recognized as revenue in the quarter ended June 30, 1999 (18% of total license 
revenue) and approximately $5.4 million was recorded in Aspen’s books and records and 
recognized as revenue in the quarter ended September 30, 2000 (25 % of total license revenue).  
For the quarter and year ended June 30, 1999 and for the quarter ended September 30, 1999, Aspen 
exceeded the consensus analyst earnings estimates.  Had the revenue from the Texas oil company 
not been recorded in those periods, Aspen would have significantly missed analyst earnings 
expectations for each of those periods.   
6. Similarly, for the quarter and fiscal year ended June 30, 1999, Aspen recorded in its 
books and records and recognized $1.7 million in license revenue pursuant to a software license 
agreement dated June 30, 1999 with a large petroleum refining company based in India (“the 
Indian refining company”).  That revenue should also not have been recognized up front because 
an Aspen salesman had entered into a side letter with the Indian refining company pursuant to 
which Aspen agreed to provide additional, as yet undetermined, software products.  As noted 
above, under GAAP, the commitment to provide additional future software required that Aspen 
record and recognize the license revenue for the transaction with the Indian refining company over 
a longer period of time. 
License Revenue Fraudulently Recognized in the Fiscal Year Ended June 30, 2000 
7. During the fiscal year ended June 30, 2000, again as a result of side letter 
agreements, Aspen fraudulently recorded in its books and records and recognized revenue from 
two software license transactions.  The first transaction involved a Korean engineering and 
3


construction firm (“the Korean company”).  For the quarter ended March 31, 2000, Aspen recorded 
in its books and records and recognized $1.1 million in license revenue pursuant to a software 
license agreement dated March 31, 2000 with the Korean company.  The revenue should not have 
been recognized because an Aspen salesman entered into two contemporaneous side letter 
agreements with the Korean company which obligated Aspen to provide $300,000 in cash and 
$800,000 in services to the Korean company.  Under GAAP, because the total amount of software 
license revenue was offset by Aspen’s obligations under the side letters, Aspen should not have 
recorded or recognized revenue on the transaction.  On May 15, 2000, Aspen filed its Form 10-Q 
for the quarter ended March 31, 2000; the financial statements in the Form 10-Q improperly 
included approximately $1.1 million in software license revenue from the transaction.    
8. The second transaction involved a software license agreement dated March 31, 
2000 with a French company (“the French company”).  For the quarter ended June 30, 2000, 
Aspen fraudulently recorded in its books and records and recognized license revenue of $1.5 
million relating to that agreement.  The revenue should not have been recognized because an 
Aspen salesman entered into a contemporaneous side letter agreement which created contingencies 
to the French company’s obligations.  Under GAAP, the existence of those contingencies 
prohibited up-front recognition of the license revenue.  On September 28, 2000, Aspen filed its 
Form 10-K for the year ended June 30; the financial statements in the Form 10-K improperly 
included approximately $1.5 million in software license revenue from the transaction.   
License Revenue Fraudulently Recognized in the Fiscal Year Ended June 30, 2001 
Second Quarter 2001 Revenue
            9.            On            February            14, 2001, Aspen filed its Form 10-Q for the quarter ended December 
31, 2000. In the financial statements included in that filing, Aspen’s software license revenue for 
the quarter was fraudulently inflated by 18.6% as a result of the improper recognition of revenue 
from five software transactions.  As described below, Aspen’s CEO, CFO and COO were all aware 
that the recognition was improper in at least two of those transactions.   
10. Aspen’s CEO, motivated by a desire to increase revenue at the end of a quarter, was 
the architect of a fraudulent revenue transaction with an information technology company based in 
New York (“the New York company”).  For the quarter ended December 31, 2000, Aspen 
improperly recorded in its books and records and recognized $2.8 million in license revenue 
pursuant to a software license agreement with the New York company. Under GAAP, the revenue 
from the transaction with the New York company should not have been recognized for two 
independent reasons: (i) the transaction was still being negotiated after quarter end; and (ii) the 
New York company’s payment to Aspen was contingent on Aspen finding end users to which the 
New York company could resell the software. 
11. Just before the close of the second quarter, around December 25, 2000, the CEO 
asked the New York company to buy approximately $3 million worth of software.  In order to 
induce the New York company to make the deal, the CEO promised that Aspen would arrange for 
end-users to purchase the software from the New York company.  The CEO further promised that 
4


the New York company would not be required to pay for the licenses until Aspen arranged for 
those end-users to purchase the software, and that if the New York company was unable to resell 
all $3 million in licenses, Aspen would arrange financing for the transaction until the licenses were 
sold through to end-users.  On or about January 6, 2001, an employee of the New York company 
observed to a coworker in an email that: AAspenTech needs to realize the $3M sale in Dec. 2000 
business, and they are willing to make some extraordinary concessions for this.”  Aspen’s CEO, 
CFO, and COO all knew that Aspen and the New York company were still negotiating the terms of 
the license sale through mid-January 2001, and also knew that, in order to legitimately recognize 
the revenue in the quarter ended December 31, the deal had to have been signed before December 
31, 2000. In an attempt to make it appear that the deal was signed before the close of the quarter, 
an Aspen salesman asked the New York company representative in January 2001 to sign the 
software license agreement and to back date it December 29, 2000.  The CEO, CFO and COO 
were motivated to prematurely recognize the revenue by a desire to increase revenues in the 
quarter and to meet analyst earnings expectations.  Including the revenue from the New York 
company allowed Aspen to exceed analyst earnings expectations for the quarter; without that 
revenue, Aspen would have missed analyst earnings expectations.     
12. Similarly, in a transaction with a British software company (“the British 
company”), Aspen’s CEO, CFO and COO all participated in a deal which resulted in Aspen 
fraudulently recording in its books and records and recognizing $1.75 million in license revenue 
for the quarter ended December 31, 2000.  Under GAAP, the revenue should not have been 
recorded or recognized for two independent reasons: (1) the transaction was still being negotiated 
after quarter end; and (2) the British company’s payment for the licenses was contingent on Aspen 
finding customers who would purchase a minimum amount of software implementation services 
from the British company.  Aspen’s CEO was aware that the transaction was being negotiated after 
quarter end, and both Aspen’s CFO and COO knew that the British company’s payment was 
contingent on Aspen finding customers to purchase services from the British company.  Despite 
this, all three caused Aspen to improperly recognize revenue on the transaction in the quarter ended 
December 31, 2000. Including the revenue from the British company allowed Aspen to exceed 
analyst earnings expectations for the quarter.     
13. In addition, for the quarter ended December 31, 2000, Aspen also fraudulently 
recorded in its books and records and recognized license revenue of $1.2 million pursuant to a 
software license agreement dated December 29, 2000 with a South African construction company 
that was a reseller of Aspen products in Africa, $824,000 pursuant to an agreement dated 
December 29, 2000 with an Indian reseller of Aspen’s software, and $978,000 pursuant to a 
software license agreement dated December 30, 2000 with a Thailand chemical company.  Aspen 
should not have recognized the revenue up-front on each of these transactions due to the existence 
of contingencies that, among other reasons, under GAAP made collectibility not probable. 
Fourth Quarter 2001 Revenue 
14. On September 26, 2001, Aspen filed with the Commission its Form 10-K for the 
year ended June 30, 2001.  Aspen’s quarterly and yearly financial results for fiscal 2001 were also 
reported in a Form 8-K filed with the Commission on August 8, 2001.  As a result of fraudulent 
5


revenue recognition from three software license transactions, Aspen’s software license revenue for 
the fourth quarter of 2001 was inflated by 15.8%.  Aspen’s CEO, CFO and COO knew that the 
recognition of revenue from at least one of those transactions was improper.   
15. Among the fourth quarter 2001 transactions, Aspen fraudulently recorded in its 
books and records and recognized $4.3 million in license revenue pursuant to a software license 
agreement with a large petroleum company in Russia (“the Russian company”).  Aspen’s CEO, 
CFO and COO all participated in the scheme to improperly recognize revenue from the deal.  
Under GAAP, the revenue from the transaction with the Russian company should not have been 
recorded or recognized for two independent reasons: (1) the transaction was still being negotiated 
after quarter end; and (2) a separate side agreement signed by Aspen’s COO created significant 
contingencies to the Russian company’s obligations under the license agreement. 
16. Aspen’s CEO, COO, and CFO all knew that the deal with the Russian company 
was not completed within the quarter ended June 30, 2001.  The COO, with the knowledge of 
Aspen’s CEO and CFO, had the Russian company sign the software license agreement in July 
2001 but back date it June 2001 so that Aspen could fraudulently recognize the revenue in the 2001 
fiscal year. On or about July 5, 2001, the COO sent an e-mail, marked “destroy after reading,” to 
the CEO and CFO attaching a draft letter to the Russian company’s president.  The attached letter 
to the Russian company’s president proposed, in part, that the Russian company sign the 
contemplated software agreement by July 10, 2001 and stated that “[a]s a quarterly driven software 
company, our business model requires that we book significant software license revenue.  ... By 
[the Russian company] committing to the software license agreement [by July 10, 2001] ... we can 
recognize the revenue for our fiscal year ending June 30, 2001 . . . .”  In addition, in mid-July 2001, 
Aspen’s COO entered into a side agreement with the Russian company which created significant 
contingencies.  The side agreement gave the Russian company the  “unconditional right[]” to 
withdraw from the software agreement if the parties failed to reach any one of three additional 
agreements by August 1, 2001.  Because the parties failed to enter into any of the additional 
agreements referenced in the side agreement, the Russian company had no obligation to purchase 
any software pursuant to the software agreement.  Aspen’s CEO, CFO and COO were all 
motivated to prematurely recognize the revenue from the Russian company transaction by a desire 
to meet consensus analysts’ earnings expectations.  Without the revenue from the Russian 
company transaction, Aspen would not have met quarterly analysts’ earning expectations. 
17. In addition, on or about August 7, 2001, Aspen’s CEO, CFO and COO signed a 
letter to Aspen’s outside auditors which falsely represented that “there are no contingencies, 
amendments or modifications to the original agreement, side agreements (verbal or written) or 
expected future concessions under [the software agreement] between Aspen and [the Russian 
company].” 
18.            Aspen            also            fraudulently            recorded in its books and records and recognized $1.8 
million in license revenue pursuant to software license agreements dated June 8, 2001 with a large 
petroleum refining company in Asia and $225,000 pursuant to a software license agreement dated 
June 30, 2001 with a Canadian systems integrator.  Aspen should not have recognized revenue in 
6


the quarter ended June 30, 2001 on either of these transactions due to contingencies that, among 
other reasons, under GAAP, caused the fees not to be fixed or determinable. 
License Revenue Fraudulently Recognized in the Fiscal Year Ended June 30, 2002 
19. On September 30, 2002, Aspen filed with the Commission its Form 10-K for the 
year ended June 30, 2002. The financial statements in the filing overstated revenue as a result of 
fraudulent revenue recognition from at least three software license transactions.  As described 
below, Aspen’s CFO and COO, again motivated by a desire to increase revenues for the quarter, 
were directly involved in the improper revenue recognition on at least one of the transactions.      
20. In a second instance of improper revenue recognition involving the New York 
company referenced above, Aspen’s CFO and COO caused revenue to be recognized despite 
knowing that the New York company’s obligations were contingent and that revenue could not be 
recognized.  As a result, for the quarter ended March 30, 2002, Aspen fraudulently recorded in its 
books and records and recognized $1.7 million in license revenue pursuant to a software license 
agreement with the New York company dated March 28, 2002. This transaction totaled 
approximately 4.5% of Aspen’s license revenue for the quarter and was reported on Aspen’s Form 
10-Q/A for the quarter ended March 31, 2002, filed with the Commission on September 6, 2002.     
21. The revenue from the second New York company deal should not have been 
recognized up-front because, similar to the prior deal, the New York company’s obligation to pay 
Aspen was contingent upon resale to an end-user, and thus, the license fee did not meet the 
requirements for up-front revenue recognition. Aspen’s CFO and COO were aware of this 
contingency at the time the revenue was fraudulently recognized.  For example, in early March 
2002, an Aspen salesman copied Aspen’s CFO on an email, stating in part that “We are in the 
closing stages of completing a deal with [an Italian company]. . . . The deal is most likely to be 
sold through [the New York company] as they have an existing agreement with [the Italian 
company] . . . . The timing of [the Italian company] deal will mean we run close to the end of Q3.  
My question is, if [the New York company] sign [sic] up the deal with us in March but the [Italian 
company] deal with [the New York company] completes in early April, would we be able to 
recognize the deal in Q3?  [The New York company] would purchase the software on behalf of 
[the Italian company] as part of the larger project.  Let me know asap, as this has a bearing on how 
much pressure we put on [the Italian company].”  Aspen’s CFO responded to this email by stating 
“We have tried this several times with [the New York company] and it hasn’t worked as they 
always want the end customer to be committed before they are committed - SO I am willing to 
give it a try but don’t count on it!!”  The CFO then forwarded the email string to, among others, the 
COO, with a note stating:  “THis [sic] is risky!!”   Despite the CFO and COO’s knowledge that the 
New York company’s commitment was contingent upon resale to a third party, Aspen fraudulently 
recognized the revenue from the transaction.  Recognizing the revenue from the New York deal 
allowed Aspen to exceed analyst earnings expectations; without the revenue, Aspen would have 
missed expectations.    
7


22. In a second transaction with the South African company referenced above, for the 
fiscal quarter ended June 30, 2002, Aspen recorded in its books and records and fraudulently 
recognized $440,000 in license revenue pursuant to a software license agreement dated June 30, 
2002. In mid-2002, an Aspen salesman offered the South African company a $45,000 payment to 
simply sign a software license agreement to buy $450,000 in software licenses and then transfer the 
software on to an end-user that Aspen had previously lined-up.  The Aspen salesman entered into a 
letter agreement with the South African company on July 1, 2002 confirming that Aspen, in 
recognition of the South African company’s signing of the license agreement, would sell the 
software to an end user and pay the South African company a commission of $45,000.  Under 
GAAP, this transaction was not a bona fide sale and thus the revenue should not have been 
recognized. 
23. Lastly, Aspen’s COO, motivated by a desire to partially offset a large revenue 
shortfall in the final days of the quarter, entered into contemporaneous side agreements with a 
Kuwait company (“the Kuwait company”) which affected delivery and caused the fee under the 
license agreement not to be fixed or determinable.  As a result, for the quarter ended June 30, 2002, 
Aspen fraudulently recorded in its books and records and recognized $1.9 million in license 
revenue pursuant to a software license agreement with the Kuwait company.  Had the revenue 
from the Kuwait company transaction not been recorded in this period, Aspen would have missed 
consensus analyst expectations by a greater margin. 
The Restatement 
24. On October 27, 2004, Aspen announced that its board of directors’ audit committee 
began an investigation of accounting for software license and service agreements entered into 
during fiscal years 2000 through 2002.  On November 24, 2004, Aspen announced that it would 
file a restatement of its financial statements due to certain accounting improprieties.  On March 15, 
2005, Aspen restated its financial statements for fiscal years 2000 through 2004.  The restatement 
revealed that Aspen had overstated previously reported license revenue for fiscal 2000 by 5.5% 
and for fiscal 2001 by 9.3%, resulting in net income dropping from $5.4 million to a loss of $3.2 
million in 2000 and increasing the previously reported loss for fiscal 2001 by $16 million.  License 
revenue for the years ended June 30, 2002, 2003, and 2004 was understated by 1.8%, 13.9%, and 
4.0% respectively.  As a result of prematurely recognized revenue from several transactions in 
fiscal 2001 and prior, the revenue was moved to these later periods. 
D.        VIOLATIONS        
25. As a result of the conduct described above, Aspen violated Section 17(a) of the 
Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, which prohibit 
fraudulent conduct in the offer or sale or in connection with the purchase or sale of securities. 
26. Also as a result of the conduct described above, Aspen violated Section 13(a) of the 
Exchange Act and Rules 13a-1, 13a-11, and 13a-13 and 12b-20 thereunder. 
8


27. Because Aspen improperly recorded revenue, its books, records and accounts did 
not, in reasonable detail, accurately and fairly reflect its transactions and dispositions of assets. 
28. In addition, Aspen failed to implement internal accounting controls relating to its 
revenue accounts sufficient to provide reasonable assurances that these accounts were accurately 
stated in accordance with GAAP.       
29. As a result of the conduct described above, Aspen violated Section 13(b)(2)(A) of 
the Exchange Act, which requires reporting companies to make and keep books, records, and 
accounts which, in reasonable detail, accurately and fairly reflect their transactions and dispositions 
of their assets.  
30. Lastly, as a result of the conduct described above, Aspen violated Section 
13(b)(2)(B) of the Exchange Act, which requires all reporting companies to devise and maintain a 
system of internal accounting controls sufficient to provide reasonable assurances that transactions 
are recorded as necessary to permit preparation of financial statements in accordance with 
generally accepted accounting principles.  
E. ONGOING COOPERATION 
31. In determining to accept the Offer, the Commission has considered the following 
undertaking by the Respondent – Aspen shall cooperate fully with the Commission in any and all 
investigations, litigations or other proceedings relating to or arising from the matters described in 
this Order.  Aspen shall: (i) produce, without service of a notice or subpoena, any and all 
documents and other information requested by the Commission staff; (ii) use its best efforts to 
cause its employees to be interviewed by the Commission staff at such times as the staff reasonably 
may direct; and (iii) use its best efforts to cause its employees to appear and testify truthfully and 
completely without service of a notice or subpoena in such investigations, depositions, hearings or 
trials as may be reasonably requested by the Commission staff. 
F.         UNDERTAKINGS         
Respondent undertakes to: 
a. Retain, through its Board of Directors, within thirty days after the entry of this 
Order, an Independent Consultant (“Independent Consultant”), not unacceptable to the staff of the 
Commission, to review Aspen’s financial and accounting policies and procedures relating to: (i) 
revenue recognition on software licensing agreements, including the consideration of SOP 97-2 
and documentation of that consideration; (ii) the signing and dating of material sales contracts and 
purchase orders and the retention by Aspen’s corporate finance organization of all such contracts 
and purchase orders; (iii) written documentation that all sales contingencies have been met in 
material revenue transactions; (iv) the generation and issuance to customers of sales invoices; and 
(v) the preparation and review of accounts receivable confirmations.  Aspen shall require the 
Independent Consultant to also consider, based on his/her review, the nature and extent of Aspen’s 
Board of Directors training required to minimize the possibility of future violations of the federal 
9


securities laws by Aspen, acting through its finance and accounting employees.  At the conclusion 
of the review, which in no event shall be more than 90 days after the Independent Consultant’s 
retention, Aspen shall require the Independent Consultant to submit a Report to Aspen and to the 
Boston Regional Office of the Commission.  The Report shall address the issues described above 
and shall include a description of the review performed, the conclusions reached and the 
Independent Consultant's recommendations for changes in or improvements to policies and 
procedures, including recommendations as to the nature and extent of Board of Directors’ training. 
b. Respondent shall adopt all of the Independent Consultant’s recommendations for 
changes in or improvements to policies and procedures as set forth below; provided however, that 
within 45 days from the date of submission of the Independent Consultant’s report, Respondent 
shall in writing advise the Independent Consultant and the staff of the Commission’s Boston 
Regional Office of any recommendation that Respondent considers to be unnecessary, 
inappropriate, unreasonable, impractical or infeasible.  Respondent need not adopt any such 
recommendation at that time but shall propose in writing an alternative policy or procedure 
designed to achieve the same objective. 
c. As to any recommendation with respect to Respondent’s policies and procedures on 
which Respondent and the Independent Consultant do not agree, they shall make a good faith 
attempt to reach agreement within 60 days from the date of submission of the Independent 
Consultant’s report.  In the event the Respondent and the Independent Consultant are unable to 
agree on an alternative proposal, Respondent will follow the recommendation of the Independent 
Consultant. To the extent the Independent Consultant proposes, in his/her report, alternative 
recommendations, any one of which is intended to address a given matter, Respondent may adopt 
one of the proposed alternatives and need not notify the Independent Consultant or the staff of the 
Commission’s Boston Regional Office of alternative recommendations not adopted. 
d. Aspen (i) shall not have the authority to terminate the Independent 
Consultant, without the prior written approval of the Commission’s Boston Regional Office; (ii) 
shall compensate the Consultant, and persons engaged to assist the Consultant, for services 
rendered pursuant to this Order at their reasonable and customary rates; and, (iii) shall not be in 
and shall not have an attorney-client relationship with the Consultant and shall not seek to invoke 
the attorney-client or any other doctrine or privilege to prevent the Consultant from transmitting 
any information, reports, or documents to the staff of the Commission; and 
e. Aspen shall require the Independent Consultant to enter into an agreement that 
provides that for the period of engagement and for a period of two years from completion of the 
engagement, the Independent Consultant shall not enter into any employment, consultant, attorney-
client, auditing or other professional relationship with Aspen, or any of its present or former 
affiliates, directors, officers, employees, or agents, respectively, acting in their capacity as such.  
The agreement will also provide that the Independent Consultant will require that any firm with 
which he/she is affiliated or of which he/she is a member, and any person engaged to assist the 
Independent Consultant in performance of his/her duties under this Order shall not, without prior 
written consent of the Commission’s Boston Regional Office, enter into any employment, 
consultant, attorney-client, auditing or other professional relationship with Aspen, or any of its 
10


present or former affiliates, directors, officers, employees, or agents acting in their capacity as such 
for the period of the engagement and for a period of two years after the engagement. 
IV. 
In view of the foregoing, the Commission deems it appropriate to impose the sanctions 
agreed to in Respondent Aspen’s Offer. 
Accordingly, pursuant to Section 8A of the Securities Act and Section 21C of the Exchange 
Act, it is hereby ORDERED that:
            A.            Respondent            Aspen            cease and desist from committing or causing any 
violations and any future violations of Section 17(a) of the Securities Act and Sections 10(b), 13(a), 
13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act and Rules 10b-5, 12b-20, 13a-1, 13a-11, and 13a-
13 thereunder.  
B.            Respondent            shall            comply with the undertakings enumerated in Section III.F, 
above. 
C. Deadlines: For good cause shown, the Commission staff may extend any of 
the procedural deadlines set forth herein. 
            By            the            Commission.            
       Nancy M. Morris
       Secretary 
11

UNITED STATES OF AMERICA 

 Before the 


SECURITIES AND EXCHANGE COMMISSION 


SECURITIES ACT OF 1933 
Release No. 8827 / July 31, 2007 

SECURITIES EXCHANGE ACT OF 1934 
Release No. 56170 / July 31, 2007 

ACCOUNTING AND AUDITING ENFORCEMENT 
Release No. 2660 / July 31, 2007 

ADMINISTRATIVE PROCEEDING 
File No. 3-12718 

In the Matter of 

   ASPEN TECHNOLOGY, INC.,  

Respondent. 

ORDER INSTITUTING CEASE-AND-DESIST 
PROCEEDINGS, MAKING FINDINGS, AND 
IMPOSING A CEASE-AND-DESIST ORDER 
PURSUANT TO SECTION 8A OF THE 
SECURITIES ACT OF 1933 AND SECTION 
21C OF THE SECURITIES EXCHANGE ACT 
OF 1934 

I. 

The Securities and Exchange Commission (“Commission”) deems it appropriate that cease-
and-desist proceedings be, and hereby are, instituted pursuant to Section 8A of the Securities Act 
of 1933 (“Securities Act”) and Section 21C of the Securities Exchange Act of 1934 (“Exchange 
Act”), against Aspen Technology, Inc. (“Aspen” or “Respondent”). 

II. 

In anticipation of the institution of these proceedings, Respondent has submitted an Offer 
of Settlement (the “Offer”) which the Commission has determined to accept.  Solely for the 
purpose of these proceedings and any other proceedings brought by or on behalf of the 
Commission, or to which the Commission is a party, and without admitting or denying the findings 
herein, except as to the Commission’s jurisdiction over it and the subject matter of these 
proceedings, which are admitted, Respondent consents to the entry of this Order Instituting Cease



and-Desist Proceedings, Making Findings, and Imposing a Cease-and-Desist Order Pursuant to 
Section 8A of the Securities Act and Section 21C of the Exchange Act (“Order”), as set forth 
below. 

III. 

On the basis of this Order and Respondent’s Offer, the Commission finds1 that: 

A. SUMMARY 

1. From at least 1999 through 2002, Aspen -- often acting through its Chief Executive 
Officer (CEO), Chief Financial Officer (CFO) and Chief Operating Officer (COO) -- engaged in a 
scheme to fraudulently inflate revenues by improperly recognizing revenue on at least nineteen 
different software license transactions involving at least fifteen different customers world-wide.  
Motivated by a desire to boost revenues and meet securities analyst earnings expectations, Aspen’s 
CEO, CFO and COO were directly involved in negotiating and improperly recognizing revenue on 
certain of these transactions.  The scheme involved premature recognition of revenue where 
revenue was not recognizable under generally accepted accounting principles (“GAAP”) in the 
quarters claimed by Aspen either because contracts were not signed within the appropriate quarter 
or because the earnings process was incomplete due to side letters or other contingency 
arrangements.  In several reporting periods, Aspen would not have met analysts’ earnings 
expectations without the improperly recognized revenue.2 

2. On March 15, 2005, Aspen restated its financial statements for fiscal years ended 
June 30, 2000 through June 30, 2004.  Among other things, the restatement revealed that Aspen 
had overstated previously reported license revenue for the fiscal year ended June 30, 2000 by 5.5% 
and for the fiscal year ended June 30, 2001 by 9.3%, resulting in net income dropping from $5.4 
million to a loss of $3.2 million for fiscal 2000 and increasing the previously reported loss for 
fiscal 2001 by $16 million.  

B. RESPONDENT

 3. Aspen, a Delaware corporation based in Cambridge, Massachusetts, sells computer 
software used in chemical, petroleum and other industrial operations.  Aspen’s stock is registered 
with the Commission under Section 12(g) of the Exchange Act and trades on the NASDAQ 
National Market System.  Aspen reports its results of operations on a fiscal year basis ending on 
June 30. 

1 The findings herein are made pursuant to Respondent's Offer of Settlement and are not binding 
on any other person or entity in this or any other proceeding. 

2 From June 1, 2000 through May 9, 2002, Aspen financed six acquisitions through private placements of 
common stock exempt from registration under Section 4(2) of the Securities Act.  In addition, Aspen filed Forms S
8 with the Commission to register shares in each of the years 2000, 2001 and 2004; those registration statements 
incorporated by reference the periodic reports discussed herein. 

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C. BACKGROUND 

License Revenue Fraudulently Recognized in the Fiscal Year Ended June 30, 1999 

4. On September 28, 1999, Aspen filed with the Commission its Form 10-K for the 
year ended June 30, 1999.  The financial statements in the Form 10-K overstated Aspen’s software 
license revenue for the quarter ended June 30, 1999 by 25% due to fraudulent accounting on two 
software license transactions.  As described below, Aspen’s CFO was directly involved in at least 
one of the transactions and was aware that recognition of revenue from that transaction was 
improper.   

5. In or about late June or early July 1999, Aspen’s outside auditor expressed concern 
that the terms of a $9.9 million software license agreement with a Texas-based oil company (“the 
Texas oil company”), would prevent Aspen from recognizing the revenue up front because the 
agreement included a requirement that Aspen provide additional, as yet undetermined, software 
products at no additional cost.  Under GAAP, revenue may not be recognized up-front where there 
is a future obligation to provide as yet undetermined products.  Aspen’s CFO, motivated by a 
desire to recognize the revenue up-front and thereby meet consensus analyst earnings expectations, 
evaded the auditor’s concerns by causing the sales documents to be revised to remove that 
provision and by putting the obligation to provide additional products into a separate side 
agreement, which she signed on August 20, 1999.  Aspen then improperly accounted for the 
license revenue up front: approximately $4.5 million was recorded in Aspen’s books and records 
and improperly recognized as revenue in the quarter ended June 30, 1999 (18% of total license 
revenue) and approximately $5.4 million was recorded in Aspen’s books and records and 
recognized as revenue in the quarter ended September 30, 2000 (25 % of total license revenue).  
For the quarter and year ended June 30, 1999 and for the quarter ended September 30, 1999, Aspen 
exceeded the consensus analyst earnings estimates.  Had the revenue from the Texas oil company 
not been recorded in those periods, Aspen would have significantly missed analyst earnings 
expectations for each of those periods.   

6. Similarly, for the quarter and fiscal year ended June 30, 1999, Aspen recorded in its 
books and records and recognized $1.7 million in license revenue pursuant to a software license 
agreement dated June 30, 1999 with a large petroleum refining company based in India (“the 
Indian refining company”).  That revenue should also not have been recognized up front because 
an Aspen salesman had entered into a side letter with the Indian refining company pursuant to 
which Aspen agreed to provide additional, as yet undetermined, software products.  As noted 
above, under GAAP, the commitment to provide additional future software required that Aspen 
record and recognize the license revenue for the transaction with the Indian refining company over 
a longer period of time. 

License Revenue Fraudulently Recognized in the Fiscal Year Ended June 30, 2000 

7. During the fiscal year ended June 30, 2000, again as a result of side letter 
agreements, Aspen fraudulently recorded in its books and records and recognized revenue from 
two software license transactions.  The first transaction involved a Korean engineering and 

3




construction firm (“the Korean company”).  For the quarter ended March 31, 2000, Aspen recorded 
in its books and records and recognized $1.1 million in license revenue pursuant to a software 
license agreement dated March 31, 2000 with the Korean company.  The revenue should not have 
been recognized because an Aspen salesman entered into two contemporaneous side letter 
agreements with the Korean company which obligated Aspen to provide $300,000 in cash and 
$800,000 in services to the Korean company.  Under GAAP, because the total amount of software 
license revenue was offset by Aspen’s obligations under the side letters, Aspen should not have 
recorded or recognized revenue on the transaction.  On May 15, 2000, Aspen filed its Form 10-Q 
for the quarter ended March 31, 2000; the financial statements in the Form 10-Q improperly 
included approximately $1.1 million in software license revenue from the transaction.    

8. The second transaction involved a software license agreement dated March 31, 
2000 with a French company (“the French company”).  For the quarter ended June 30, 2000, 
Aspen fraudulently recorded in its books and records and recognized license revenue of $1.5 
million relating to that agreement.  The revenue should not have been recognized because an 
Aspen salesman entered into a contemporaneous side letter agreement which created contingencies 
to the French company’s obligations.  Under GAAP, the existence of those contingencies 
prohibited up-front recognition of the license revenue.  On September 28, 2000, Aspen filed its 
Form 10-K for the year ended June 30; the financial statements in the Form 10-K improperly 
included approximately $1.5 million in software license revenue from the transaction.   

License Revenue Fraudulently Recognized in the Fiscal Year Ended June 30, 2001 

Second Quarter 2001 Revenue

 9. On February 14, 2001, Aspen filed its Form 10-Q for the quarter ended December 
31, 2000. In the financial statements included in that filing, Aspen’s software license revenue for 
the quarter was fraudulently inflated by 18.6% as a result of the improper recognition of revenue 
from five software transactions.  As described below, Aspen’s CEO, CFO and COO were all aware 
that the recognition was improper in at least two of those transactions.   

10. Aspen’s CEO, motivated by a desire to increase revenue at the end of a quarter, was 
the architect of a fraudulent revenue transaction with an information technology company based in 
New York (“the New York company”).  For the quarter ended December 31, 2000, Aspen 
improperly recorded in its books and records and recognized $2.8 million in license revenue 
pursuant to a software license agreement with the New York company. Under GAAP, the revenue 
from the transaction with the New York company should not have been recognized for two 
independent reasons: (i) the transaction was still being negotiated after quarter end; and (ii) the 
New York company’s payment to Aspen was contingent on Aspen finding end users to which the 
New York company could resell the software. 

11. Just before the close of the second quarter, around December 25, 2000, the CEO 
asked the New York company to buy approximately $3 million worth of software.  In order to 
induce the New York company to make the deal, the CEO promised that Aspen would arrange for 
end-users to purchase the software from the New York company.  The CEO further promised that 

4




the New York company would not be required to pay for the licenses until Aspen arranged for 
those end-users to purchase the software, and that if the New York company was unable to resell 
all $3 million in licenses, Aspen would arrange financing for the transaction until the licenses were 
sold through to end-users.  On or about January 6, 2001, an employee of the New York company 
observed to a coworker in an email that: AAspenTech needs to realize the $3M sale in Dec. 2000 
business, and they are willing to make some extraordinary concessions for this.”  Aspen’s CEO, 
CFO, and COO all knew that Aspen and the New York company were still negotiating the terms of 
the license sale through mid-January 2001, and also knew that, in order to legitimately recognize 
the revenue in the quarter ended December 31, the deal had to have been signed before December 
31, 2000. In an attempt to make it appear that the deal was signed before the close of the quarter, 
an Aspen salesman asked the New York company representative in January 2001 to sign the 
software license agreement and to back date it December 29, 2000.  The CEO, CFO and COO 
were motivated to prematurely recognize the revenue by a desire to increase revenues in the 
quarter and to meet analyst earnings expectations.  Including the revenue from the New York 
company allowed Aspen to exceed analyst earnings expectations for the quarter; without that 
revenue, Aspen would have missed analyst earnings expectations.     

12. Similarly, in a transaction with a British software company (“the British 
company”), Aspen’s CEO, CFO and COO all participated in a deal which resulted in Aspen 
fraudulently recording in its books and records and recognizing $1.75 million in license revenue 
for the quarter ended December 31, 2000.  Under GAAP, the revenue should not have been 
recorded or recognized for two independent reasons: (1) the transaction was still being negotiated 
after quarter end; and (2) the British company’s payment for the licenses was contingent on Aspen 
finding customers who would purchase a minimum amount of software implementation services 
from the British company.  Aspen’s CEO was aware that the transaction was being negotiated after 
quarter end, and both Aspen’s CFO and COO knew that the British company’s payment was 
contingent on Aspen finding customers to purchase services from the British company.  Despite 
this, all three caused Aspen to improperly recognize revenue on the transaction in the quarter ended 
December 31, 2000. Including the revenue from the British company allowed Aspen to exceed 
analyst earnings expectations for the quarter.     

13. In addition, for the quarter ended December 31, 2000, Aspen also fraudulently 
recorded in its books and records and recognized license revenue of $1.2 million pursuant to a 
software license agreement dated December 29, 2000 with a South African construction company 
that was a reseller of Aspen products in Africa, $824,000 pursuant to an agreement dated 
December 29, 2000 with an Indian reseller of Aspen’s software, and $978,000 pursuant to a 
software license agreement dated December 30, 2000 with a Thailand chemical company.  Aspen 
should not have recognized the revenue up-front on each of these transactions due to the existence 
of contingencies that, among other reasons, under GAAP made collectibility not probable. 

Fourth Quarter 2001 Revenue 

14. On September 26, 2001, Aspen filed with the Commission its Form 10-K for the 
year ended June 30, 2001.  Aspen’s quarterly and yearly financial results for fiscal 2001 were also 
reported in a Form 8-K filed with the Commission on August 8, 2001.  As a result of fraudulent 

5




revenue recognition from three software license transactions, Aspen’s software license revenue for 
the fourth quarter of 2001 was inflated by 15.8%.  Aspen’s CEO, CFO and COO knew that the 
recognition of revenue from at least one of those transactions was improper.   

15. Among the fourth quarter 2001 transactions, Aspen fraudulently recorded in its 
books and records and recognized $4.3 million in license revenue pursuant to a software license 
agreement with a large petroleum company in Russia (“the Russian company”).  Aspen’s CEO, 
CFO and COO all participated in the scheme to improperly recognize revenue from the deal.  
Under GAAP, the revenue from the transaction with the Russian company should not have been 
recorded or recognized for two independent reasons: (1) the transaction was still being negotiated 
after quarter end; and (2) a separate side agreement signed by Aspen’s COO created significant 
contingencies to the Russian company’s obligations under the license agreement. 

16. Aspen’s CEO, COO, and CFO all knew that the deal with the Russian company 
was not completed within the quarter ended June 30, 2001.  The COO, with the knowledge of 
Aspen’s CEO and CFO, had the Russian company sign the software license agreement in July 
2001 but back date it June 2001 so that Aspen could fraudulently recognize the revenue in the 2001 
fiscal year. On or about July 5, 2001, the COO sent an e-mail, marked “destroy after reading,” to 
the CEO and CFO attaching a draft letter to the Russian company’s president.  The attached letter 
to the Russian company’s president proposed, in part, that the Russian company sign the 
contemplated software agreement by July 10, 2001 and stated that “[a]s a quarterly driven software 
company, our business model requires that we book significant software license revenue.  ... By 
[the Russian company] committing to the software license agreement [by July 10, 2001] ... we can 
recognize the revenue for our fiscal year ending June 30, 2001 . . . .”  In addition, in mid-July 2001, 
Aspen’s COO entered into a side agreement with the Russian company which created significant 
contingencies.  The side agreement gave the Russian company the  “unconditional right[]” to 
withdraw from the software agreement if the parties failed to reach any one of three additional 
agreements by August 1, 2001.  Because the parties failed to enter into any of the additional 
agreements referenced in the side agreement, the Russian company had no obligation to purchase 
any software pursuant to the software agreement.  Aspen’s CEO, CFO and COO were all 
motivated to prematurely recognize the revenue from the Russian company transaction by a desire 
to meet consensus analysts’ earnings expectations.  Without the revenue from the Russian 
company transaction, Aspen would not have met quarterly analysts’ earning expectations. 

17. In addition, on or about August 7, 2001, Aspen’s CEO, CFO and COO signed a 
letter to Aspen’s outside auditors which falsely represented that “there are no contingencies, 
amendments or modifications to the original agreement, side agreements (verbal or written) or 
expected future concessions under [the software agreement] between Aspen and [the Russian 
company].” 

18. Aspen also fraudulently recorded in its books and records and recognized $1.8 
million in license revenue pursuant to software license agreements dated June 8, 2001 with a large 
petroleum refining company in Asia and $225,000 pursuant to a software license agreement dated 
June 30, 2001 with a Canadian systems integrator.  Aspen should not have recognized revenue in 

6




the quarter ended June 30, 2001 on either of these transactions due to contingencies that, among 
other reasons, under GAAP, caused the fees not to be fixed or determinable. 

License Revenue Fraudulently Recognized in the Fiscal Year Ended June 30, 2002 

19. On September 30, 2002, Aspen filed with the Commission its Form 10-K for the 
year ended June 30, 2002. The financial statements in the filing overstated revenue as a result of 
fraudulent revenue recognition from at least three software license transactions.  As described 
below, Aspen’s CFO and COO, again motivated by a desire to increase revenues for the quarter, 
were directly involved in the improper revenue recognition on at least one of the transactions.      

20. In a second instance of improper revenue recognition involving the New York 
company referenced above, Aspen’s CFO and COO caused revenue to be recognized despite 
knowing that the New York company’s obligations were contingent and that revenue could not be 
recognized.  As a result, for the quarter ended March 30, 2002, Aspen fraudulently recorded in its 
books and records and recognized $1.7 million in license revenue pursuant to a software license 
agreement with the New York company dated March 28, 2002. This transaction totaled 
approximately 4.5% of Aspen’s license revenue for the quarter and was reported on Aspen’s Form 
10-Q/A for the quarter ended March 31, 2002, filed with the Commission on September 6, 2002.     

21. The revenue from the second New York company deal should not have been 
recognized up-front because, similar to the prior deal, the New York company’s obligation to pay 
Aspen was contingent upon resale to an end-user, and thus, the license fee did not meet the 
requirements for up-front revenue recognition. Aspen’s CFO and COO were aware of this 
contingency at the time the revenue was fraudulently recognized.  For example, in early March 
2002, an Aspen salesman copied Aspen’s CFO on an email, stating in part that “We are in the 
closing stages of completing a deal with [an Italian company]. . . . The deal is most likely to be 
sold through [the New York company] as they have an existing agreement with [the Italian 
company] . . . . The timing of [the Italian company] deal will mean we run close to the end of Q3.  
My question is, if [the New York company] sign [sic] up the deal with us in March but the [Italian 
company] deal with [the New York company] completes in early April, would we be able to 
recognize the deal in Q3?  [The New York company] would purchase the software on behalf of 
[the Italian company] as part of the larger project.  Let me know asap, as this has a bearing on how 
much pressure we put on [the Italian company].”  Aspen’s CFO responded to this email by stating 
“We have tried this several times with [the New York company] and it hasn’t worked as they 
always want the end customer to be committed before they are committed - SO I am willing to 
give it a try but don’t count on it!!”  The CFO then forwarded the email string to, among others, the 
COO, with a note stating:  “THis [sic] is risky!!”   Despite the CFO and COO’s knowledge that the 
New York company’s commitment was contingent upon resale to a third party, Aspen fraudulently 
recognized the revenue from the transaction.  Recognizing the revenue from the New York deal 
allowed Aspen to exceed analyst earnings expectations; without the revenue, Aspen would have 
missed expectations.    

7




22. In a second transaction with the South African company referenced above, for the 
fiscal quarter ended June 30, 2002, Aspen recorded in its books and records and fraudulently 
recognized $440,000 in license revenue pursuant to a software license agreement dated June 30, 
2002. In mid-2002, an Aspen salesman offered the South African company a $45,000 payment to 
simply sign a software license agreement to buy $450,000 in software licenses and then transfer the 
software on to an end-user that Aspen had previously lined-up.  The Aspen salesman entered into a 
letter agreement with the South African company on July 1, 2002 confirming that Aspen, in 
recognition of the South African company’s signing of the license agreement, would sell the 
software to an end user and pay the South African company a commission of $45,000.  Under 
GAAP, this transaction was not a bona fide sale and thus the revenue should not have been 
recognized. 

23. Lastly, Aspen’s COO, motivated by a desire to partially offset a large revenue 
shortfall in the final days of the quarter, entered into contemporaneous side agreements with a 
Kuwait company (“the Kuwait company”) which affected delivery and caused the fee under the 
license agreement not to be fixed or determinable.  As a result, for the quarter ended June 30, 2002, 
Aspen fraudulently recorded in its books and records and recognized $1.9 million in license 
revenue pursuant to a software license agreement with the Kuwait company.  Had the revenue 
from the Kuwait company transaction not been recorded in this period, Aspen would have missed 
consensus analyst expectations by a greater margin. 

The Restatement 

24. On October 27, 2004, Aspen announced that its board of directors’ audit committee 
began an investigation of accounting for software license and service agreements entered into 
during fiscal years 2000 through 2002.  On November 24, 2004, Aspen announced that it would 
file a restatement of its financial statements due to certain accounting improprieties.  On March 15, 
2005, Aspen restated its financial statements for fiscal years 2000 through 2004.  The restatement 
revealed that Aspen had overstated previously reported license revenue for fiscal 2000 by 5.5% 
and for fiscal 2001 by 9.3%, resulting in net income dropping from $5.4 million to a loss of $3.2 
million in 2000 and increasing the previously reported loss for fiscal 2001 by $16 million.  License 
revenue for the years ended June 30, 2002, 2003, and 2004 was understated by 1.8%, 13.9%, and 
4.0% respectively.  As a result of prematurely recognized revenue from several transactions in 
fiscal 2001 and prior, the revenue was moved to these later periods. 

D. VIOLATIONS 

25. As a result of the conduct described above, Aspen violated Section 17(a) of the 
Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, which prohibit 
fraudulent conduct in the offer or sale or in connection with the purchase or sale of securities. 

26. Also as a result of the conduct described above, Aspen violated Section 13(a) of the 
Exchange Act and Rules 13a-1, 13a-11, and 13a-13 and 12b-20 thereunder. 

8




27. Because Aspen improperly recorded revenue, its books, records and accounts did 
not, in reasonable detail, accurately and fairly reflect its transactions and dispositions of assets. 

28. In addition, Aspen failed to implement internal accounting controls relating to its 
revenue accounts sufficient to provide reasonable assurances that these accounts were accurately 
stated in accordance with GAAP.       

29. As a result of the conduct described above, Aspen violated Section 13(b)(2)(A) of 
the Exchange Act, which requires reporting companies to make and keep books, records, and 
accounts which, in reasonable detail, accurately and fairly reflect their transactions and dispositions 
of their assets.  

30. Lastly, as a result of the conduct described above, Aspen violated Section 
13(b)(2)(B) of the Exchange Act, which requires all reporting companies to devise and maintain a 
system of internal accounting controls sufficient to provide reasonable assurances that transactions 
are recorded as necessary to permit preparation of financial statements in accordance with 
generally accepted accounting principles.  

E. ONGOING COOPERATION 

31. In determining to accept the Offer, the Commission has considered the following 
undertaking by the Respondent – Aspen shall cooperate fully with the Commission in any and all 
investigations, litigations or other proceedings relating to or arising from the matters described in 
this Order.  Aspen shall: (i) produce, without service of a notice or subpoena, any and all 
documents and other information requested by the Commission staff; (ii) use its best efforts to 
cause its employees to be interviewed by the Commission staff at such times as the staff reasonably 
may direct; and (iii) use its best efforts to cause its employees to appear and testify truthfully and 
completely without service of a notice or subpoena in such investigations, depositions, hearings or 
trials as may be reasonably requested by the Commission staff. 

F. UNDERTAKINGS 

Respondent undertakes to: 

a. Retain, through its Board of Directors, within thirty days after the entry of this 
Order, an Independent Consultant (“Independent Consultant”), not unacceptable to the staff of the 
Commission, to review Aspen’s financial and accounting policies and procedures relating to: (i) 
revenue recognition on software licensing agreements, including the consideration of SOP 97-2 
and documentation of that consideration; (ii) the signing and dating of material sales contracts and 
purchase orders and the retention by Aspen’s corporate finance organization of all such contracts 
and purchase orders; (iii) written documentation that all sales contingencies have been met in 
material revenue transactions; (iv) the generation and issuance to customers of sales invoices; and 
(v) the preparation and review of accounts receivable confirmations.  Aspen shall require the 
Independent Consultant to also consider, based on his/her review, the nature and extent of Aspen’s 
Board of Directors training required to minimize the possibility of future violations of the federal 

9




securities laws by Aspen, acting through its finance and accounting employees.  At the conclusion 
of the review, which in no event shall be more than 90 days after the Independent Consultant’s 
retention, Aspen shall require the Independent Consultant to submit a Report to Aspen and to the 
Boston Regional Office of the Commission.  The Report shall address the issues described above 
and shall include a description of the review performed, the conclusions reached and the 
Independent Consultant's recommendations for changes in or improvements to policies and 
procedures, including recommendations as to the nature and extent of Board of Directors’ training. 

b. Respondent shall adopt all of the Independent Consultant’s recommendations for 
changes in or improvements to policies and procedures as set forth below; provided however, that 
within 45 days from the date of submission of the Independent Consultant’s report, Respondent 
shall in writing advise the Independent Consultant and the staff of the Commission’s Boston 
Regional Office of any recommendation that Respondent considers to be unnecessary, 
inappropriate, unreasonable, impractical or infeasible.  Respondent need not adopt any such 
recommendation at that time but shall propose in writing an alternative policy or procedure 
designed to achieve the same objective. 

c. As to any recommendation with respect to Respondent’s policies and procedures on 
which Respondent and the Independent Consultant do not agree, they shall make a good faith 
attempt to reach agreement within 60 days from the date of submission of the Independent 
Consultant’s report.  In the event the Respondent and the Independent Consultant are unable to 
agree on an alternative proposal, Respondent will follow the recommendation of the Independent 
Consultant. To the extent the Independent Consultant proposes, in his/her report, alternative 
recommendations, any one of which is intended to address a given matter, Respondent may adopt 
one of the proposed alternatives and need not notify the Independent Consultant or the staff of the 
Commission’s Boston Regional Office of alternative recommendations not adopted. 

d. Aspen (i) shall not have the authority to terminate the Independent 
Consultant, without the prior written approval of the Commission’s Boston Regional Office; (ii) 
shall compensate the Consultant, and persons engaged to assist the Consultant, for services 
rendered pursuant to this Order at their reasonable and customary rates; and, (iii) shall not be in 
and shall not have an attorney-client relationship with the Consultant and shall not seek to invoke 
the attorney-client or any other doctrine or privilege to prevent the Consultant from transmitting 
any information, reports, or documents to the staff of the Commission; and 

e. Aspen shall require the Independent Consultant to enter into an agreement that 
provides that for the period of engagement and for a period of two years from completion of the 
engagement, the Independent Consultant shall not enter into any employment, consultant, attorney-
client, auditing or other professional relationship with Aspen, or any of its present or former 
affiliates, directors, officers, employees, or agents, respectively, acting in their capacity as such.  
The agreement will also provide that the Independent Consultant will require that any firm with 
which he/she is affiliated or of which he/she is a member, and any person engaged to assist the 
Independent Consultant in performance of his/her duties under this Order shall not, without prior 
written consent of the Commission’s Boston Regional Office, enter into any employment, 
consultant, attorney-client, auditing or other professional relationship with Aspen, or any of its 

10




present or former affiliates, directors, officers, employees, or agents acting in their capacity as such 
for the period of the engagement and for a period of two years after the engagement. 

IV. 

In view of the foregoing, the Commission deems it appropriate to impose the sanctions 
agreed to in Respondent Aspen’s Offer. 

Accordingly, pursuant to Section 8A of the Securities Act and Section 21C of the Exchange 
Act, it is hereby ORDERED that:

 A. Respondent Aspen cease and desist from committing or causing any 
violations and any future violations of Section 17(a) of the Securities Act and Sections 10(b), 13(a), 
13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act and Rules 10b-5, 12b-20, 13a-1, 13a-11, and 13a
13 thereunder.  

B. Respondent shall comply with the undertakings enumerated in Section III.F, 
above. 

C. Deadlines: For good cause shown, the Commission staff may extend any of 
the procedural deadlines set forth herein. 

 By the Commission. 

       Nancy  M.  Morris
       Secretary  

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