1 

UNITED STATES DISTRICT COURT 

DISTRICT OF NEW HAMPSHIRE 

 

UNITED STATES SECURITIES ) 

AND EXCHANGE COMMISSION ) 

 ) 

Plaintiff, )

 ) 

v. ) Civ. No. 07-39-SM

 ) 

ERIC JAEGER and ) 

JERRY A. SHANAHAN, ) 

 ) 

Defendants. ) 

JERRY SHANAHAN’S MOTION FOR LEAVE TO FILE SUPPLEMENTARY 

SUBMISSION IN SUPPORT OF HIS MOTION FOR SUMMARY JUDGMENT 

Jerry Shanahan moves this Court for leave to file a fivepage supplementary submission in support of his motion for 

summary judgment, accompanied by a two-page declaration of a 

witness, Joe Guth. Copies of the proposed submission and Guth 

declaration is attached hereto as Exhibit A. 

 The grounds for leave to file are as follows: 

1. In the course of their summary judgment submissions, the 

parties disputed the meaning of a certain entry in a 

spreadsheet authored by Joe Guth. The entry is relevant 

on the issue of whether the amount of the over-stated 

revenue attributable to the questioned Tech Data Canada 

transaction was immaterial. After the completion of the 

briefing cycle, the parties jointly interviewed Mr. Guth 

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and he has signed a declaration which clarifies the 

meaning of the disputed entry. This supplementary 

submission clarifies the record pertaining to materiality 

and, for that reason, is necessary to prevent 

misunderstanding of the documentary record. 

2. Undersigned counsel is authorized to state that Nancy 

Gegenheimer does not assent to the allowance of this 

motion for leave to file. 

Respectfully submitted, 

 Jerry A. Shanahan 

 By his attorneys, 

 /s/ Andrew Good 

 Andrew Good 

 /s/ Philip G. Cormier 

 Philip G. Cormier 

 Good & Cormier 

 83 Atlantic Avenue 

 Boston, MA 02110 

 (617) 523-5933 

DATED: July 30, 2012 

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Certificate of Service 

I hereby certify that a copy of the foregoing Motion was hereby 

served, via the ECF system, upon the following: 

Nancy Gegenheimer gegenheimern@sec.gov

Leslie J. Hughes hugheslj@sec.gov 

Jeffrey S. Lyons lyonsj@sec.gov

Jeffrey B. Rudman jeffrey.rudman@wilmerhale.com

James A. Scoggins, II scogginsj@sec.gov 

Jonathan A. Shapiro jonathan.shapiro@wilmerhale.com

DATED: July 30, 2012 

 /s/ Andrew Good 

 Andrew Good 

Case 1:07-cv-00039-SM Document 304 Filed 07/30/12 Page 3 of 13
Exhibit A 

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UNITED STATES DISTRICT COURT 

DISTRICT OF NEW HAMPSHIRE 

 

UNITED STATES SECURITIES ) 

AND EXCHANGE COMMISSION ) 

 ) 

Plaintiff, )

 ) 

v. ) Civ. No. 07-39-SM

 ) 

ERIC JAEGER and ) 

JERRY A. SHANAHAN, ) 

 ) 

Defendants. ) 

JERRY SHANAHAN’S SUPPLEMENTARY SUBMISSION 

 IN SUPPORT OF HIS MOTION FOR SUMMARY JUDGMENT 

 Jerry Shanahan submits this supplementary submission 

in support of his motion for summary judgment. 

 The grounds for this submission are as follows: 

1. In addition to his contention that the 

uncontradicted evidence shows that the Tech Data 

Canada transaction did not involve a “side letter 

scheme” at all, Mr. Shanahan has argued that the 

dollar amount of the alleged overstatement 

attributable to the August transaction with Tech 

Data Canada was mathematically immaterial. 

Specifically, Mr. Shanahan has argued that the 

$2.863 million of revenue recognized from the 

questioned transaction was immaterial because it 

Case 1:07-cv-00039-SM Document 304 Filed 07/30/12 Page 5 of 13
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amounted to 1.2% of the $240,818,000 total revenue 

reported for the quarter ended September 1, 2011. 

Doc. 280 at 19-20. This 1.2% figure does not take 

the $1 million reserve into account at all. But it 

is certainly low enough to render the over-reported 

revenue immaterial, according to the standard this 

Court applied when dismissing SEC claims against 

Piyush Patel and Lawrence Collins. 

2. However, an important document which provides 

further support for Mr. Shanahan’s mathematical 

immateriality contention is a spreadsheet authored 

by Joe Guth that included a $1 million reserve 

against revenue totaling $3.8 million for two 

transactions – one in July and one in August of 

2001. Doc. 281-10 at 3 (Shanahan Ex. 30). 

Application of the reserve reduced the revenue 

amount that was over-reported. Mr. Shanahan has 

argued that the $1 million reserve applied to the 

August transaction which the SEC alleges involved a 

side letter scheme. See Doc. 280 at 8 n.3. 

3. The SEC’s submission argued that the $1 million 

reserve applied exclusively to the July 2001 

transaction and did not apply at all to the August 

2001 transaction at issue. 

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Shanahan points out that Guth’s spreadsheet took a 

$1 million reserve for total sales to Tech Data 

Canada of $3.8 million. Shanahan does not argue that 

the $1 million in reserves against revenue was for 

the August 29, 2001 sale to Tech Data Canada, and it 

was not. The $1 million in reserve was for the $1 

million sale to Tech Data Canada in July 2001. Kay 

agreed to the return provisions in the first 

transaction with Tech Data Canada and said they 

could reserve against the revenue if necessary. (SEC 

Ex. 25). 

SEC Reply In Support of SEC’s Summary Judgment and 

Response to Shanahan’s Summary Judgment 

(doc.228)(1/20/12) at 7 (emphasis added) (footnotes 

omitted). In his reply memorandum, Mr. Shanahan 

maintained that the $1 million reserve was entered 

in the spreadsheet in a column that refers to endof-quarter deals so that the reserve applied to the 

August transaction. Doc. 297 at 15 n.4. 

4. After this cycle of summary judgment submissions 

was completed, counsel for both parties interviewed 

the spreadsheet’s author, Joe Guth. As a result of 

the Guth interview, Mr. Guth executed a Supplemental 

Declaration dated April 24, 2012, a copy of which is 

appended here to as Exhibit 1. Mr. Guth’s 

Supplemental Declaration conclusively rejects the 

SEC’s argument that the $1 million reserve applies 

entirely and exclusively to the July transaction. 

In pertinent part, Mr. Guth states: 

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When I wrote the $1 million reserve on the Tech Data 

Canada line, that reserve did not apply exclusively 

to $1 million transaction in July 2001. I did not 

recommend a 100% reserve for the July transaction 

and 0% reserve for the August transaction. As far as 

I know and remember, the $1 million reserve entry 

applied to both the July and the August transactions 

which totaled $3,863,000, so that the reserve entry 

constituted approximately 25% of that total. 

Supplemental Declaration of Joe Guth at 2 ¶5. 

5. Mr. Guth’s Supplemental Declaration conclusively 

resolves the parties’ dispute about the 

applicability of the $1 million reserve to the 

August 2001 Tech Data Canada transaction. In 

accordance with Mr. Guth’s declaration, the $1 

million reserve applied to both the July and August 

transactions. The $2.683 million August transaction 

constituted 74% of the total for both transactions 

of $3.683 million. Hence, the reserve applicable to 

the $2.683 million August transaction was $740,000 

so that the net amount of over-reported revenue was 

$2,123,000, which amounts to only .9% of the $240 

million in revenue reported for the quarter. Thus, 

the percentage of over-reported revenue was actually 

less than the 1.2% argued previously by Mr. 

Shanahan. This is somewhat stronger evidence that 

even-handed application of the materiality standard 

applied to the SEC’s claims against Piyush Patel and 

Case 1:07-cv-00039-SM Document 304 Filed 07/30/12 Page 8 of 13
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Larry Collins should afford summary judgment against 

the SEC. 

 Respectfully submitted, 

 Jerry A. Shanahan 

 By his attorneys, 

 /s/ Andrew Good 

 Andrew Good 

 /s/ Philip G. Cormier 

 Philip G. Cormier 

 Good & Cormier 

 83 Atlantic Avenue 

 Boston, MA 02110 

 (617) 523-5933 

DATED: July 30, 2012 

Case 1:07-cv-00039-SM Document 304 Filed 07/30/12 Page 9 of 13
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Certificate of Service 

I hereby certify that a copy of the foregoing Motion was 

hereby served, via the ECF system, upon the following: 

Nancy Gegenheimer gegenheimern@sec.gov

Leslie J. Hughes hugheslj@sec.gov 

Jeffrey S. Lyons lyonsj@sec.gov

Jeffrey B. Rudman jeffrey.rudman@wilmerhale.com

James A. Scoggins, II scogginsj@sec.gov 

Jonathan A. Shapiro jonathan.shapiro@wilmerhale.com

DATED: July 30, 2012 

 /s/ Andrew Good 

 Andrew Good 

Case 1:07-cv-00039-SM Document 304 Filed 07/30/12 Page 10 of 13
Exhibit 1 

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