UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION

Securities Exchange Act of 1934
Release No. 51287 / March 2, 2005

Admin. Proc. File No. 3-11646

The Securities and Exchange Commission (Commission) initiated this proceeding on September 13, 2004, pursuant to Section 15(b) of the Securities Exchange Act of 1934 (Exchange Act). Respondent Roberto E. Veitia (Veitia) was served with the Order Instituting Proceedings (OIP) on January 11, 2005. On January 28, 2005, I held a prehearing conference, which Veitia failed to attend. By order dated January 31, 2005, I reminded Veitia of his obligation to file an Answer or be deemed in default. As of today, Respondent has not filed an Answer.

On February 16, 2005, I issued an order requiring Veitia to show cause by February 25, 2005, why he should not be held in default. To date, Veitia has failed to show such cause.

Veitia is in default for failing to file an Answer and failing to appear at a prehearing conference. 17 C.F.R. §§ 201.155(a), .221(f). Pursuant to Rule 155(a) of the Commission's Rules of Practice, 17 C.F.R. § 201.155(a), I find the following allegations in the OIP to be true.

Veitia, age fifty-six, lived in Florida during the relevant time period. He was the president and chairman of Corporate Relations Group, Inc. (CRG), a public relations firm located in Winter Park, Florida. Veitia also served as the president, chief executive officer, and chairman of Stratcomm Media Ltd. (Stratcomm), CRG's parent. For most of the relevant period, Veitia was the sole director of Gulf Atlantic Publishing, Inc. (Gulf/Atlantic), a wholly owned subsidiary of Stratcomm that, in late 1995, succeeded CRG as the entity publishing certain promotional materials.

On September 27, 1999, the Commission filed a civil injunctive action in the United States District Court for the Middle District of Florida against Veitia, CRG, Stratcomm, Gulf/Atlantic and other defendants. SEC v. Corporate Relations Group, Inc., Civ. No. 6:99-CV-1222-Orl-28A. The complaint alleged that Veitia violated Sections 5(a), 5(c), 17(a), and 17(b) of the Securities Act of 1933 (Securities Act), and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, and that Veitia was liable for CRG's violations of the federal securities laws as a controlling person under Section 20 of the Exchange Act.

The complaint alleged that from at least September 1994 through December 1996, Veitia participated in a fraudulent scheme in which CRG acquired control of large blocks of securities from at least fifteen small public companies either free of charge or at a steep discount, touted these securities to the public, and then sold the securities while promoting them. According to the complaint, CRG failed to disclose its compensation from these issuers, and at the same it was promoting the issuers' stock to the public, it was selling its positions in these stocks. The complaint further alleged that Veitia was the mastermind behind CRG's fraudulent scheme, that he directed and controlled the activities of CRG, Stratcomm, and Gulf/Atlantic, and that he was the publisher of most CRG and Gulf/Atlantic promotional materials. Lastly, the complaint stated that Veitia convinced CRG clients that two Costa Rican entities, both defendants in the Commission's action, were legitimate, independent offshore purchasers qualified to acquire United States securities under Regulation S, a special exemption from the registration provisions of the federal securities laws, and that Veitia negotiated on behalf of the Costa Rican entities with CRG clients.

On March 28, 2003, the court granted the Commission's motion for summary judgment and made the following findings of facts and conclusions of law: Veitia was the president and chairman of CRG and the president, chief executive officer, and chairman of Stratcomm. Veitia was listed as "publisher" on the masthead of the promotion materials produced by CRG, Stratcomm, and Gulf/Atlantic. Further, CRG operated as a stock promotion firm, and CRG touted securities in its publications and forwarded investors' inquiries to brokers who then sold the securities featured in CRG publications to those investors.

Gulf/Atlantic touted stock to the public through promotional materials. CRG entered into contracts with issuers for the provision of promotional services in exchange for monetary compensation, stock, or both. Because many of these issuer-clients were cash-poor, these issuers offered only shares of their stock as consideration. Shortly after the promotion of an issuer appeared in the promotional materials, the stock price of that issuer would rise in response to the promotion, and CRG would sell its position for a profit.

Veitia was intricately involved in the management of CRG, Stratcomm, and Gulf/Atlantic. Veitia had the power to control the general affairs of CRG, and he had the power to directly or indirectly control the specific CRG corporate policy that resulted in primary liability of CRG for each of CRG's violations of the federal securities laws.

Veitia directed the affairs of the two Costa Rican entities. Neither entity had any business activity other than to serve as apparent foreign purchasers of securities on behalf of Veitia and CRG, so that CRG's client companies could sell securities to these entities in the belief that they were exempt from the Securities Act's registration requirements.

On May 13, 2003, the district court, entered final judgment against Veitia and CRG permanently enjoining them from violating Sections 5, 17(a), and 17(b) of the Securities Act, Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, and Section 15(a) of the Exchange Act as to CRG. The final judgment further ordered that as a controlling person of CRG, pursuant to Section 20(a) of the Exchange Act, Veitia was permanently enjoined from violating Sections 5, 17(a), and 17(b) of the Securities Act, and Sections 10(b) and 15(a) of the Exchange Act and Rule 10b-5 thereunder. The final judgment ordered that Veitia, CRG, and Stratcomm were jointly and severally liable for disgorgement of $25,571,443, together with prejudgment interest in the amount of $19,280,551, for a total amount of $44,851,994. Lastly, the final judgment ordered Veitia to pay a civil monetary penalty of $1,400,000.¹

The securities of at least one of the companies that Veitia and CRG promoted, Tracker Corporation of America, constituted a penny stock within the meaning of Section 3(a)(51) of the Exchange Act and Rule 3a51-1 thereunder.

Based on the foregoing, I find that it is appropriate and in the public interest to bar Veitia from participating in an offering of penny stock.

Order

IT IS ORDERED that, pursuant to Section 15(b) of the Securities Exchange Act of 1934, that Respondent Roberto E. Veitia is hereby BARRED from participating in an offering of penny stock.

Endnotes

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¹ In June 2003, Veitia appealed the district court's judgment to the United States Court of Appeals for the Eleventh Circuit. On March 2, 2004, the court of appeals affirmed the district court's decision. Veitia did not appeal the court of appeals judgment.

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