UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION
SECURITIES ACT OF 1933
Release No. 7740 / September 22, 1999
SECURITIES EXCHANGE ACT OF 1934
Release No. 41895 / September 22, 1999
ADMINISTRATIVE PROCEEDING
File No. 3-9201
_________________________________________________
:
In the Matter of :
:
Sky Scientific, Inc.; W.A. Dorow, Jr.; :
Jerry L. Foster; Gilbert Marshall & Co., Inc.;
Michael A. Usher; Strategic Resource :
Management, Inc.; William A. Moler; Daniel :
R. Lehl; Thomas Patrick Meehan; Douglas A. :
Glaser; Smith, Benton & Hughes, Inc.; :
Michael Zaman; George T. Hellen; Robert :
Schlien; American Capital Network, Inc.; :
Philip M. Georgeson; Melvin L. Levine; :
William David Jones, :
:
Respondents. :
:
_______________________________________________ :
ORDER OF THE COMMISSION REGARDING WILLIAM A. MOLER AND STRATEGIC RESOURCE MANAGEMENT, INC., MAKING FINDINGS AND IMPOSING REMEDIAL SANCTIONS AND A CEASE-AND-DESIST ORDER
I.
In these proceedings ordered pursuant to Section 8A of the Securities Act of 1933 ("Securities Act") and Sections 15(b), 19(h) and 21C of the Securities Exchange Act of 1934 ("Exchange Act"), 1 Respondents Strategic Resource Management, Inc. ("Strategic") and William A. Moler ("Moler") have submitted an Offer of Settlement ("Offer") which the Securities and Exchange 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 in which the Commission is a party, Strategic and Moler consent to the entry of this Order of the Commission Making Findings and Imposing Remedial Sanctions and Cease-and-Desist Order and admit the jurisdiction of the Commission with respect to the matters set forth in this Order.
II.
On the basis of Moler's and Strategic's Offer, the Commission finds 2 that:
A. The Initial Decision of the Administrative Law Judge issued March 5, 1999 ("Initial Decision"), shall become the final order of the Commission except as set forth below in paragraph II. D.
B. As found in the Initial Decision, Moler was the president of Strategic, a broker dealer registered with the Commission. As set forth in more detail in the Initial Decision, Moler and Strategic from December 21, 1993 through February 17, 1994 in 115 transactions, sold Sky Scientific, Inc. common stock to customers of Strategic at excessive undisclosed markups. As a result of these excessive markups Strategic realized excessive trading profits of $68,469. In making these sales of stock, Strategic was not a market maker for purposes of calculating markups because it did not regularly make a two sided market in which it both bought and sold Sky stock. Yet it calculated its markups based on inter-dealer quotes rather than its contemporaneous cost of acquisition.
C. As found in the Initial Decision, Moler and Strategic willfully violated Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder.
D. It is appropriate in this matter for Moler and Strategic to pay disgorgement and a civil penalty. Respondents have submitted sworn financial statements and other evidence and have asserted their financial inability to pay disgorgement or a civil penalty. The Commission has reviewed the sworn financial statement and other evidence provided by the Respondents and has determined that the Respondents do not have the financial ability to pay disgorgement of $68,469 plus prejudgment interest or a civil penalty.
III.
In view of the foregoing, the Commission finds that it is in the public interest to impose sanctions specified in the Offer of Settlement.
Accordingly, IT IS ORDERED that:
A. Moler is barred from association with any broker-dealer with a right to reapply for association after 18 months to the appropriate self-regulatory organization, of if there is none, to the Commission.
B. The broker-dealer registration of Strategic is suspended for 90 days.
C. Moler and Strategic cease and desist from committing or causing any violations and future violations of Section 17(a) of the Securities Act (10(b) of the Exchange Act and Rule 10b-5 thereunder.
D. Disgorgement is fixed in the amount of $68,469 plus prejudgment interest, but the payment of such amount be waived based upon Respondents' demonstrated financial inability to pay. The Division of Enforcement ("Division") may, at any time following the entry of this Order, petition the Commission to: 1) reopen this matter to consider whether Respondent provided accurate and complete financial information at the time such representations were made; 2) determine the amount of civil penalty to be imposed; 3) determine the amount of disgorgement and prejudgment interest to order; and 4) seek any additional remedies that the Commission would be authorized to impose in this proceeding if Respondent's offer of settlement had not been accepted. No other issues shall be considered in connection with this petition other than whether the financial information provided by Respondent was fraudulent, misleading, inaccurate or incomplete in any material respect, the amount of civil penalty to be imposed and whether any additional remedies should be imposed. Respondent may not, by way of defense to any such petition, contest the findings in this Order or the Commission's authority to impose any additional remedies that were available in the original proceeding.
By the Commission.
Jonathan G. Katz
Secretary
Footnotes
-[1]- The Order for Public Proceeding in this matter was issued on December 16, 1996.
-[2]- The findings herein are made pursuant to Moler's and Strategic's Offer of Settlement and are not binding on any other person or entity in this or any other proceeding.
http://www.sec.gov/litigation/admin/34-41895.htm
