When news of Digital Lightwave's accounting woes made it to the public, in the form of an obliquely worded earning "restatement" issued by the company on January 22, 1998, the revelations were greeted not only by the inevitable tumble in Digital's stock price and a flurry of class action lawsuits, but also sparked an investigation by the Securities and Exchange Commission.
In 1998, Zwan resigned as Chief Executive Officer of Digital Lightwave, although he remained on the Board of Directors.
In March, 2000, the SEC announced that it had launched a suit against Digital Lightwave and Bryan Zwan for "financial fraud in connection with an earning management scheme." According to the SEC release, related administrative suits against other Digital officers, including Seth Joseph, former Digital accounting officer Beth Morris and Chief Financial Officer Steven Grant had already been settled.
Zwan resigned from the Board of Directors of Digital Lightwave in August, 2000, stating that he planned to "pursue other interests." In 2001, however, he quietly returned to Digital's board, and also served as an "advisor to management." On December 7, 2001, the SEC announced that the suit against Zwan had been settled, with Dr. Zwan paying a $10,000 civil penalty and agreeing not to break the law in future.
On January 23, 2002, a company news release announced that Zwan would be returning as chairman, president and Chief Executive Officer of Digital Lightwave, replacing Gerry Chastelet, who had served as CEO for the three years since Zwan's "departure" from the company. On February 2, 2002, a full page advertisement in the St. Petersburg Times expressed, ostensibly on behalf of Digital's employees, a "warm welcome back" to Dr. Zwan.
Laissez les bons temps roulez, indeed.