==========================================START OF PAGE 1====== UNITED STATES OF AMERICA Before the SECURITIES AND EXCHANGE COMMISSION SECURITIES ACT OF 1933 Release No. 7306 / June 25, 1996 SECURITIES EXCHANGE ACT OF 1934 Release No. 37373 / June 25, 1996 ADMINISTRATIVE PROCEEDING File No. 3-8805 ----------------------------------- : In the Matter of: : : DANNY G. PINKERTON : ORDER OF THE COMMISSION : MAKING FINDINGS AND and : IMPOSING REMEDIAL : SANCTIONS AND A CEASE- AND-KEVIN N. CAMPBELL, : DESIST ORDER AS TO DANNY : G. PINKERTON Respondents. : : ----------------------------------- 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]- Respondent Danny G. Pinkerton (Pinkerton) has 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, and without admitting or denying the Commission's findings herein, except to admit the jurisdiction of the Commission over him and over the matters set forth in the Order, Pinkerton consents to the entry of this Order of the Commission Making Findings and Imposing Remedial Sanctions and Cease-and-desist Order as to Danny G. Pinkerton. ---------FOOTNOTES---------- -[1]- The Order for Public Proceeding in this matter was issued on September 11, 1995. ==========================================START OF PAGE 2====== II. On the basis of the Order Instituting Public Administrative Proceedings and Pinkerton's Offer, the Commission finds -[2]- that: A. Balance for Life, Inc. (BFL) is a public company subject to reporting obligations under Section 15(d) of the Exchange Act and headquartered in Beverly Hills, California. B. R.K. Steele, formerly known as Rockefeller, Rothschild & Steele (RRS) is a wholly-owned subsidiary of BFL and was a broker-dealer registered with the Commission pursuant to Section 15(b) of the Exchange Act. C. From March 1993 through August 1994, Pinkerton was the branch office manager and a registered representative of the Denver, Colorado office of RRS. D. From about March 1993 through about September 1993, Pinkerton willfully violated Section 17(a) of the Securities Act in that, directly or indirectly, in the offer or sale of securities by use of the means or instrumentalities of transportation or communication in interstate commerce or by use of the mails, he employed devices, schemes or artifices to defraud; obtained money or property by means of untrue statements of material facts or omissions to state material facts necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading; or engaged in transactions, practices, or courses of business which would or did operate as a fraud or deceit upon other persons in that he: 1. offered for sale, sold, or supervised others who sold to approximately 23 investors, securities of BFL, a company that purportedly was developing and intending to market both a personal wellness program and certain related health care products, for total proceeds of approximately $564,000; 2. failed to make inquiry appropriate under the circumstances or to verify the accuracy of the information provided to him by others before providing that information to RRS' registered representatives and to investors and prospective investors, including information concerning ---------FOOTNOTES---------- -[2]- The findings herein are made pursuant to Pinkerton's Offer of Settlement and are not binding on any other person or entity named as a respondent in this or any other proceeding. ==========================================START OF PAGE 3====== matters set forth in sub-paragraph II.D.3. below; and 3. made false statements of, or misrepresented material facts to registered representatives concerning: (a) the potential for public trading of BFL stock on Nasdaq; (b) price(s) or range(s) of prices at which BFL would publicly trade in the future; (c) future "spinoffs" of companies that BFL purportedly owned or intended to acquire; (d) the amount of BFL securities sold or proceeds from sales of such securities; and (e) the closing date of private placement offerings of BFL securities. E. From about February 1993 through about September 1993, Pinkerton willfully violated Section 10(b) of the Exchange Act and Rule 10b-5 thereunder in that, directly or indirectly, in connection with the purchase or sale of securities, by use of the means or instrumentalities of interstate commerce, or of the mails, he employed devices, schemes or artifices to defraud; made untrue statements of material facts or omitted to state material facts necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading; or engaged in transactions, practices, or courses of business which would or did operate as a fraud or deceit upon other persons with respect to those matters set forth in sub- paragraphs II.D.1. through II.D.3. above. F. From the beginning of his employment at RRS through about September 1993, Pinkerton violated Section 5(a) and (c) of the Securities Act by directing and/or participating in the offer and sale through interstate commerce of BFL securities for which no registration was filed or in effect with the Commission and without benefit of an exemption from registration. G. Accordingly, Pinkerton willfully violated Sections 5(a) and (c), and 17(a) of the Securities Act, Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. H. The Commission has reviewed Pinkerton's sworn financial statement and other evidence adduced by Pinkerton, and provided that he has submitted a true, accurate and complete sworn affidavit establishing his inability to pay concerning his financial condition, including his assets, liabilities, income and expenses, and has determined that Pinkerton does not have the financial ability to pay disgorgement of $22,440.00, which Pinkerton received as commissions from the sale of BFL's securities described in Section II. paragraphs D. through G. above, and an administrative penalty. ==========================================START OF PAGE 4====== ==========================================START OF PAGE 5====== III. In view of the foregoing, the Commission finds that it is in the public interest to impose the sanctions specified in the Offer of Settlement. Accordingly, IT IS ORDERED that: A. Pinkerton cease and desist from committing or causing any violations and future violations of Sections 5(a) and (c), and 17(a) of the Securities Act, Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. B. Pinkerton be barred from association in any capacity with any broker, dealer, municipal securities dealer, investment company or investment adviser; provided that Pinkerton may reapply to become associated after three years from the date of the Order. Such application shall be made to the appropriate self-regulatory organization or, where there is none, to the Commission. C. Pinkerton pay disgorgement in the amount of $22,440.00, plus pre-judgment interest thereon dating to the date of this Order, provided, however, that the payment of such disgorgement is waived based upon Pinkerton's demonstrated inability to pay disgorgement and that the Division of Enforcement (Division) may petition the Administrative Law Judge (ALJ) to reopen this matter to consider Pinkerton's inability to disgorge funds if the Division obtains information from any source that the financial information provided by Pinkerton was inaccurate or incomplete in any material respect. In connection with such petition, the ALJ may consider ordering Pinkerton to pay $22,440.00 in disgorgement, plus interest. Pinkerton may not, by way of defense to such petition, contest the allegations and findings of this Order or assert that disgorgement and/or a civil penalty shall not be ordered for the violations of the federal securities laws alleged therein. By the Commission. Jonathan G. Katz Secretary