UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION

Securities Act of 1933
Release No. 8524 / January 19, 2005

Admin. Proc. File No. 3-11798

I.

The Securities and Exchange Commission ("Commission") deems it appropriate that public cease-and-desist proceedings be, and hereby are, instituted pursuant to Section 8A of the Securities Exchange Act of 1933 ("Securities Act") against John M. Dutton ("Dutton" 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 Respondent and the subject matter of these proceedings, 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 of 1933 ("Order"), as set forth below.

III.

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

Respondent

1. Dutton, a resident of El Dorado Hills, California was, during the relevant period set forth below, president and a principal shareholder of J.M. Dutton and Associates LLC.

Relevant Entity

2. J.M. Dutton & Associates LLC ("Dutton Associates"), a California business entity with its principal offices in El Dorado Hills, California, provided during the relevant period, and continues to provide, paid-for stock research reports published on its website.

Background

3. From July 2002 through the present, Dutton was the president and a principal shareholder of Dutton Associates, a business entity that published paid-for stock analysis reports for issuers.

4. In or around July 2002, the Commission's staff notified Dutton, through counsel, that the general disclaimers used by Dutton in published research reports were insufficient and violated Section 17(b) of the Securities Act because they failed to specifically disclose that compensation came from an issuer, underwriter, or dealer.

5. From August through December 2002, Dutton published through Dutton Associates stock analysis reports with general disclaimers that failed to disclose that compensation was received from the issuer that was the subject of the report. These issuers included, among others, EasyLink Services Corp., Century Casinos, Inc., Rawlings Sporting Goods Company, Inc., and Panhandle Royalty Company. None of these issuers is alleged to have committed any wrongdoing. All of the compensation for the issuance and publication of Dutton Associates' reports from August through December 2002 came from the issuers covered by Dutton Associates' reports.

6. Dutton Associates' general disclaimers from August through December 2002 stated that anyone may enroll a company for research coverage for a payment of $25,000 per year, and that its reports were performed on behalf of the public and were not a service to any company.

7. Based on the foregoing acts, Dutton violated Section 17(b) of the Securities Act by publishing through Dutton Associates stock analyst reports without fully disclosing the receipt of compensation for the reports from issuers.

8. From August through December 2002, Dutton's continued use of, and his causing Dutton Associates to use, general disclaimers that did not disclose that the issuers had paid for the reports was in reliance on advice of counsel and entailed no fraudulent intent.²

9. From early January 2003, through the present, Dutton Associates' disclaimers have fully disclosed compensation received from issuers as required by Section 17(b) of the Securities Act.

IV.

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

Accordingly, it is hereby ORDERED:

Pursuant to Section 8A of the Securities Act, Respondent John M. Dutton cease and desist from committing or causing any violation or future violation of Section 17(b) of the Securities Act.

By the Commission.

Endnotes

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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 Scienter is not an element of a Section 17(b) violation. SEC v. Wall Street Publishing, 851 F.2d 365, 375-376 (D.C. Cir. 1988). State of mind may be considered in determining sanction.

http://www.sec.gov/litigation/admin/33-8524.htm