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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): November 22, 1995
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PAIRGAIN TECHNOLOGIES, INC.
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(Exact name of registrant as specified in charter)
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<S> <C> <C>
Delaware 0-22202 33-0282809
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
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14402 Franklin Avenue, Tustin, California 92680
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(Address of principal executive offices) (Zip Code)
Company's telephone number, including area code: (714) 832-9922
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(Former name or former address, if changed since last report.)
Exhibit Index on Page 4
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ITEM 5. OTHER EVENTS.
PairGain Technologies, Inc. (the "Registrant") recently learned that
unauthorized trading in one of its brokerage accounts had resulted in
non-operating losses as described in the press release by the Registrant issued
on December 1, 1995, a copy of which is attached hereto as Exhibit 99.1.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits:
99.1 Press Release of the Registrant dated December 1, 1995.
2.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
PAIRGAIN TECHNOLOGIES, INC.
Date: December 5, 1995 By: /s/ CHARLES W. McBRAYER
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Charles W. McBrayer
Vice President, Finance and
Administration, Chief
Financial Officer (Duly
authorized officer)
3.
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EXHIBIT INDEX
DESCRIPTION OF DOCUMENT
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Sequentially
Exhibit Numbered
Number Page
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99.1 Press Release of the Registrant dated
December 1, 1995 . . . . . . . . . . . . . . . . . . . 6
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4.
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EXHIBIT 99.1
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Press Release of the Registrant dated December 1, 1995
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EXHIBIT 99.1
FOR IMMEDIATE RELEASE FOR INFORMATION:
CHARLES STRAUCH
CHARLES MCBRAYER
(714) 832-9922
PAIRGAIN REPORTS UNAUTHORIZED ACTIONS BY EXTERNAL FIRMS
RESULTING IN NON-OPERATIONAL LOSS
TUSTIN, CA --- (Dec. 1, 1995) --- PairGain Technologies, Inc. (NASDAQ:
PAIR) announced today that unauthorized trading activity in one of the
company's brokerage accounts had resulted in non-operating losses of
$15.9 million. The company stated that certain of its outside brokers engaged
in substantial unauthorized trading activities in Treasury securities. These
losses were concealed from the company until last week. PairGain has made
demands seeking restitution in the ensuing days, without satisfactory response.
The company intends to initiate legal action against the firms involved upon
completion of a full investigation.
Mr. Charles S. Strauch, chairman and chief executive officer of
PairGain, emphasized that the activities of these outside brokers were in
violation of the company's specific investment guidelines. A minority portion
of PairGain's excess cash was on account with these brokers with specific
instructions that it be invested only in US Treasury notes of mixed maturities.
"Flagrant misrepresentations regarding account status and false monthly
statements delayed the company's awareness that losses had occurred," remarked
Mr. Strauch. He stated that the company would reflect the full amount of the
loss in its 1995 financial statements, and that it may be necessary to restate
prior quarters to properly reflect the period or periods in which the losses
occurred.
Mr. Strauch emphasized that the losses were non-operational in nature
and the company has over $55 million in cash reserves with no long-term debt.
Mr. Strauch stated that, "All aspects of PairGain's operations, bookings,
revenues and operating profits continue to be very strong through eleven months
and we are entering December in an excellent position."
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NOTE TO INVESTORS, ANALYSTS AND EDITORS
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THE COMPANY WILL HOLD A CONFERENCE CALL ON FRIDAY, DECEMBER 1, 1995 AT 2:00PM
(PACIFIC STANDARD TIME).
CALL IN NUMBER: 212-346-0202
A SECOND CONFERENCE CALL WILL BE CONDUCTED ON MONDAY, DECEMBER 4, 1995 AT
5:00AM (PACIFIC STANDARD TIME).
CALL IN NUMBER: 212-346-6600
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