UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION

Securities Exchange Act of 1934
Release No. 50966 / January 5, 2005

Accounting and Auditing Enforcement
Release No. 2158 / January 5, 2005

Admin. Proc. File No. 3-11788

I.

The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest that proceedings be, and hereby are, instituted pursuant to Section 15(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 102(e)(3)(i) of the Commission's Rules of Practice against Richard M. Wooten ("Wooten" or "Respondent").¹

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 him and the subject matter of these proceedings, and the findings contained in Section III. B. below, which are admitted, Respondent consents to the entry of this Order Instituting Administrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934 and Rule 102(e) of the Commission's Rules of Practice, Making Findings, and Imposing Remedial Sanctions ("Order"), as set forth below.

III.

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

A. Richard M. Wooten, 45 years of age, resides in South Carolina and has been a licensed certified public accountant in South Carolina. Wooten served as the president, chief financial officer, a director, general securities principal and FINOP for the Southern Financial Group, Inc. ("Southern"), a registered broker-dealer from March 1986 until May 2002.

B. On November 29, 2004, a final judgment was entered by consent against Wooten, permanently enjoining him from future violations of Section 17(a) of the Securities Act of 1933 ("Securities Act"), and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder and from aiding and abetting violations of Sections 15(c)(3) and 17(a) of the Exchange Act and Rules 15c3-1, 17a-3, 17a-4, 17a-5 and 17a-11 thereunder , in the civil action entitled Securities and Exchange Commission v. Southern Financial Group, Inc., Richard M. Wooten, Charles Dennis McKittrick and Gerald F. Hunter, Jr.d, Civil Action Number 2:02-1806-18, in the United States District Court for District of South Carolina, Charleston Division. The final judgment against Wooten set disgorgement at $418,900, with prejudgment interest in the amount of $80,171, for a total of $499,071, provided that payment of disgorgement and prejudgment interest shall be waived and no civil penalties be imposed, based on the representations in his sworn financial statements

C. The Commission's complaint alleged that Southern Financial Group, Inc. ("Southern"), a broker-dealer registered with the Commission, Wooten and others, in connection with the sale of nineteen series of one-month and three-month promissory notes bearing interest at the rate of ten-percent (10%) per month, operated a Ponzi scheme, and falsely stated to investors that the notes were secured by sufficient capital to pay off the notes in the event of default, failed to disclose to investors that some of the notes were in default, omitted to disclose that the issuer of the notes was unable to make timely payments on the notes to some investors and otherwise engaged in a variety of conduct which operated as a fraud and deceit on investors in violation of Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder.

D. The Commission's complaint also alleged that Southern was required to maintain $100,000 of net capital and that from at least October 30, 2001 through May, 2002, Southern's books and financial records inaccurately reflected a cash balance in an account ranging from $226,931.80 to $240,906.80. When that amount was corrected, Southern's net capital deficiency at the ends of the months of October 2001, November 2001, January 2002, February 2002, and March 2002 ranged from ($156,815) to ($198,568). The complaint alleged that Southern failed to promptly give notice to the Commission and others of the net capital deficiencies as required by law. Wooten, as chief financial officer and financial principal at Southern, was responsible for Southern's books and records and signed its reports pursuant to Section 17(a) of the Exchange Act and Rule 17a-5 thereunder. The complaint also alleged that the reports filed by Southern were inaccurate in that they misrepresented Southern's cash position and failed to include certain liabilities. The complaint also alleged that Wooten directed the firm to continue to transact business while he knew it was below the required net capital. As a result of this conduct, the complaint alleged that Wooten had aided and abetted violations of Sections 15(c)(3) and 17(a) of the Exchange Act and Rules 15c3-1, 17a-3, 17a-4, 17a-5 and 17a-11 thereunder.

IV.

In view of the foregoing, the Commission deems it appropriate and in the public interest to impose the sanction agreed to in Respondent Wooten's Offer.

Accordingly, it is hereby ORDERED, effective immediately, that:

A. Pursuant to Section 15(b)(6) of the Exchange Act, Respondent Wooten be, and hereby is, barred from association with any broker or dealer;

B. Wooten is suspended from appearing or practicing before the Commission as an accountant.

C. Any reapplication for association by the Respondent will be subject to the applicable laws and regulations governing the reentry process, and reentry may be conditioned upon a number of factors, including, but not limited to, the satisfaction of any or all of the following: (a) any disgorgement ordered against the Respondent, whether or not the Commission has fully or partially waived payment of such disgorgement; (b) any arbitration award related to the conduct that served as the basis for the Commission order; (c) any self-regulatory organization arbitration award to a customer, whether or not related to the conduct that served as the basis for the Commission order; and (d) any restitution order by a self-regulatory organization, whether or not related to the conduct that served as the basis for the Commission order.

By the Commission.

Endnotes

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¹ Rule 102(e)(3)(i)(A) provides, in relevant part, that:

The Commission, with due regard to the public interest and without preliminary hearing, may, by order, . . . suspend from appearing or practicing before it any . . . accountant . . . who has been by name . . . permanently enjoined by any court of competent jurisdiction, by reason of his or her misconduct in an action brought by the Commission, from violating or aiding and abetting the violation of any provision of the Federal securities laws or of the rules and regulations thereunder.

http://www.sec.gov/litigation/admin/34-50966.htm