UNITED STATES OF AMERICA Before the SECURITIES AND EXCHANGE COMMISSION Securities Act of 1933 Release No. 7365 / November 18, 1996 Securities Exchange Act of 1934 Release No. 37961 / November 18, 1996 Accounting and Auditing Enforcement Release No. 858 / November 18, 1996 Administrative Proceeding File No. 3-9187 ____________________________________ : ORDER INSTITUTING : CEASE-AND-DESIST AND In the Matter of Carmel Equity Partners,: PUBLIC ADMINISTRATIVE Richard L. Goodrich, Lawrence D. : PROCEEDINGS AND NOTICE Isen, Peter P. Kim, Bruce E. Mesnekoff, : OF HEARING PURSUANT TO John B. Morris and Kelsey Van Deventer : SECTION 8A OF THE : SECURITIES ACT OF 1933 : AND SECTIONS 15(b), : 19(H)AND 21C OF THE : SECURITIES EXCHANGE : ACT OF 1934 __________________________________________ I. The Commission's official public files disclose that: A. At all times relevant to this proceeding, Eagle Holdings, Inc. ("Eagle") was a Colorado corporation with its principal place of business in Mesa, Arizona. Eagle's common stock has been registered with the Commission pursuant to Section 12(g) of the Securities Exchange Act of 1934 ("Exchange Act") (File No. 0- 15216) since December 1986. Eagle makes periodic filings with the Commission on Forms 10-Q, 10-K and 8-K. Eagle is presently called Chariot Entertainment, Inc. ("Chariot") and is a Nevada corporation with its principal place of business in Salt Lake City, Utah. Between January 3, 1992, and October 21, 1993, Chariot was incorporated in Colorado as Eagle. On October 21, 1993, it redomiciled to Nevada and became Eagle Automotive Enterprises, Inc. On April 14, 1994, it was renamed Chariot. B. Cohig & Associates Inc. ("Cohig") is a broker-dealer that has been registered with the Commission pursuant to Section 15(b) ==========================================START OF PAGE 2====== of the Exchange Act (File No. 8-33481) since March 1985, with its principal place of business in Denver, Colorado. II. As a result of an investigation, the Division of Enforcement alleges that: A. From at least January 1992 until December 1993, Eagle common stock was publicly traded. B. From at least January 1992 until December 1993, Cohig purchased and sold Eagle common stock for its account and for the accounts of investors. C. Carmel Equity Partners is a Colorado general partnership with its principal place of business in San Diego, California. D. John B. Morris ("Morris"), a resident of San Diego, California, was employed by Cohig from about October 1991 to about April 1995. From about October 1991 to about June 1994, Morris was employed by Cohig as branch manager of its Solana Beach, California, branch. Morris was employed by Cohig as branch manager of its La Jolla, California, branch from about June 1994 to about December 1994 and as assistant branch manager of that branch from about December 1994 to about April 1995. Morris was a general partner of Carmel Equity Partners. E. Richard L. Goodrich ("Goodrich"), a resident of San Diego, California, was the president of Colton Ventures, Inc. ("Colton Ventures"), a Utah corporation with its principal place of business in Colton, California. Colton Ventures was incorporated on November 10, 1992, and involuntarily dissolved on February 1, 1994, for failure to file an annual report. Goodrich also was a registered representative at Cohig from about July 1993 to about April 1994. F. Lawrence D. Isen ("Isen"), a resident of San Diego, California, was a registered representative at Cohig's Solana Beach, California, branch from about November 1991 to about May 1995. G. Peter P. Kim ("Kim"), a resident of Manhattan Beach, California, was a registered representative at Cohig's Solana Beach, California, branch from about December 1991 to about August 1993. H. Bruce E. Mesnekoff ("Mesnekoff"), a resident of Indian Rocks Beach, Florida, was a registered representative at Cohig's Solana Beach, California, branch from about March 1992 to about October 1993. ==========================================START OF PAGE 3====== I. Kelsey Van Deventer ("Van Deventer"), a resident of Decatur, Illinois, was a registered representative at Cohig's Solana Beach, California, branch from about June 1992 to about August 1993. III. As a result of an investigation, the Division of Enforcement further alleges that: A. From at least February 1993 to at least June 1993, Morris, Carmel Equity Partners, Isen, Kim, Mesnekoff and Van Deventer willfully violated Section 17(a) of the Securities Act of 1933 ("Securities Act") and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder in that, in connection with the offer, purchase or sale of Eagle securities, by use of the means or instruments of transportation or communication in interstate commerce or by use of the mails, they, and each of them, directly or indirectly, employed devices, schemes or artifices to defraud, obtained money or property by means of untrue statements of material facts or omitted to state material facts necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading, and engaged in transactions, practices, or courses of business which operated as a fraud or deceit upon the purchasers of said securities. 1. As part of and in furtherance of this conduct, respondents received undisclosed compensation as set forth below that was paid to them by persons controlling or otherwise associated with Eagle or at the behest of such persons and recommended that investors and prospective investors purchase Eagle stock, and recommended Eagle stock to other registered representatives: a. Morris and Carmel Equity Partners: $56,412; b. Isen: $31,0 00; c. Kim: $24,0 00; d. Mesnekoff: $ 5,461 ; and e. Van Deventer: $ 9,000 . 2. Of the at least $56,412 Morris and Carmel Equity Partners received as described in Paragraph III.A.1., Morris paid ==========================================START OF PAGE 4====== additional undisclosed compensation to the respondents listed below in at least the amounts listed below and such persons recommended that investors and prospective investors purchase Eagle stock, and recommended Eagle stock to other registered representatives: a. Kim: $ 1,690; b. Isen: $18,520; c. Mesnekoff: $ 5,800; and d. Van Deventer: $ 9,828. B. From at least February 1993 to at least June 1993, Goodrich willfully caused or aided and abetted violations of Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder in that, in connection with the offer, purchase or sale of Eagle securities, by use of the means or instruments of transportation or communication in interstate commerce or by use of the mails, he, directly or indirectly, employed devices, schemes or artifices to defraud, obtained money or property by means of untrue statements of material facts or omitted to state material facts necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading, and engaged in transactions, practices, or courses of business which operated as a fraud or deceit upon the purchasers of said securities. As part of and in furtherance of this conduct, Goodrich and Colton Ventures received at least $76,440 from persons controlling or otherwise associated with Eagle or at the behest of such persons. To induce them to recommend that investors and prospective investors purchase Eagle stock and to induce them to recommend Eagle stock to other registered representatives Goodrich and Colton Ventures paid at least the following amounts of undisclosed compensation to the following respondents: 1. Morris and Carmel Equity Partners: $22,562; 2. Kim: $ 7,000 ; and 3. Mesnekoff: $ 5,511 . IV. In view of the allegations by the Division of Enforcement, the Commission deems it necessary and appropriate in the public ==========================================START OF PAGE 5====== interest and for the protection of investors that public proceedings be instituted to determine: A. Whether the allegations set forth in Parts II. and III. hereof are true and, in connection therewith, to afford the Respondents an opportunity to establish any defenses to such allegations. B. Whether an order should be issued pursuant to Section 8A of the Securities Act and Section 21C of the Exchange Act requiring Morris, Isen, Kim, Mesnekoff, Van Deventer, Goodrich and Carmel Equity Partners to cease and desist from committing or causing violations of and any future violations of Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. C. What, if any, remedial action against Morris, Isen, Kim, Mesnekoff, Van Deventer and Goodrich is appropriate in the public interest pursuant to Sections 15(b) and 19(h) of the Exchange Act. D. Whether disgorgement of all illegally obtained monies, plus reasonable interest, should be required of Morris, Carmel Equity Partners, Isen, Kim, Mesnekoff, Van Deventer and Goodrich pursuant to Section 8A of the Securities Act and Section 21C of the Exchange Act. E. Whether a money penalty should be assessed against Morris, Isen, Kim, Mesnekoff, Van Deventer and Goodrich pursuant to Section 21B of the Exchange Act. V. IT IS HEREBY ORDERED that a public hearing, for the purpose of taking evidence on the questions set forth in Part IV. hereof, be convened not earlier than thirty (30) days and not later than sixty (60) days from service of this Order Instituting Public Administrative Proceedings at a time and place to be fixed, and before an Administrative Law Judge to be designated by further Order as provided by Rule 200 of the Commission's Rules of Practice [17 C.F.R. 201.200]. IT IS FURTHER ORDERED that the Respondents shall file an Answer to these allegations contained in this Order Instituting Public Administrative Proceedings within twenty (20) days after service of this Order as provided by Rule 220 of the Commission's Rules of Practice [17 C.F.R. 201.220]. If any Respondent fails to file an Answer or fails to appear at a hearing after being duly notified, that Respondent shall be deemed in default and the proceeding may be determined against ==========================================START OF PAGE 6====== that Respondent upon consideration of this Order Instituting Public Administrative Proceedings, the allegations of which may be deemed to be true as provided by Rules 155(a), 220 and 310 of the Commission's Rules of Practice [17 C.F.R.  201.155(a), 201.220 and 201.310]. This Order Instituting Public Administrative Proceedings shall be promptly served upon John B. Morris, Carmel Equity Partners, Lawrence D. Isen, Peter P. Kim, Bruce E. Mesnekoff, Kelsey Van Deventer, and Richard L. Goodrich, personally or by certified mail. In the absence of an appropriate waiver, no officer or employee of the Commission engaged in the performance of investigative or prosecuting functions in this or any factually related proceeding will be permitted to participate or advise in the decision upon this matter, ==========================================START OF PAGE 7====== except as witness or counsel in the proceedings held pursuant to notice. Since this proceeding is not "rule making" within the meaning of Section 4(c) of the Administrative Procedure Act, it is not deemed subject to the provisions of that Section delaying the effective date of any final Commission action. By the Commission. Jonathan G. Katz Secretary