UNITED STATES OF AMERICA before the SECURITIES AND EXCHANGE COMMISSION Securities Exchange Act of 1934 Release No. 40682 / November 16, 1998 Administrative Proceeding File No. 3-9779 : In the Matter of : ORDER INSTITUTING PUBLIC : ADMINISTRATIVE PROCEEDINGS : PURSUANT TO SECTION 15(b)OF LEANDRO JAVIER OBENAUER : THE SECURITIES EXCHANGE ACT OF 1934, and BRIAN LYNCH : MAKING FINDINGS AND IMPOSING REMEDIAL Respondents. : SANCTIONS : I. The Securities and Exchange Commission deems it appropriate and in the public interest that administrative proceedings be instituted against Leandro Javier Obenauer ("Obenauer") and Brian Lynch ("Lynch") (collectively, "Respondents") pursuant to Section 15(b) of the Securities Exchange Act of 1934 ("Exchange Act"). In anticipation of the institution of these proceedings, Obenauer and Lynch have submitted Offers of Settlement (respectively, the "Obenauer Offer" and the "Lynch Offer") which the Commission has determined to accept. Solely for the purpose of these proceedings and any other proceeding brought by or on behalf of the Commission or in which the Commission is a party, and without admitting or denying any of the findings contained herein, except as to the jurisdiction of the Commission over them and over the subject matter of these proceedings, and as to the findings contained in Section II.A. and the entry of the injunction set forth in Section II.E., which are admitted, Respondents consent to the entry by the Commission of this Order Instituting Public Administrative Proceedings Pursuant to Section 15(b) of the Exchange Act, Making Findings and Imposing Remedial Sanctions ("Order"). Accordingly, IT IS HEREBY ORDERED that proceedings against Respondents be and hereby are instituted. II. On the basis of this Order and the Offer, the Commission finds that: A. Respondents have never been registered with the Commission as a broker-dealer or in any other capacity. B. On September 23, 1998, the Commission filed a complaint in the United States District Court for the Southern District of Florida, SEC v. VII Visionary Investments, Inc., d/b/a Historic Hotel Holdings, Inc., et al., Civil Action No. 98-8675- CIV_Middlebrooks (S.D. Fla. September 23, 1998), against, among others, Respondents (the "Complaint"). Among other things, the Complaint charged Obenauer with violations of certain provisions of the antifraud, securities registration, and broker-dealer registration provisions of the federal securities laws and charged Lynch with violations of certain provisions of the antifraud and broker-dealer registration provisions of the federal securities laws. C. With regard to Obenauer, the Commission's Complaint alleged, among other things, as follows: 1. In the summer of 1996, the President of both a Delaware private corporation, VII Visionary Investments, Inc. and a Florida "shell" corporation purported to merge them. Subsequently, the purportedly merged corporation issued stock certificates in the name of Historic Harder Hall, Inc. ("HHH"). 2. Between October 1996 and January 1997, Obenauer and others solicited investors to purchase HHH stock. During that period of time, Obenauer and others fraudulently offered and sold at least approximately $553,000 worth of HHH stock to investors. 3. Among other things, Obenauer misrepresented to investors (i) that HHH owned the Historic Harder Hall hotel in Sebring, Florida; (ii) that funds raised from investors would be used to renovate the hotel; (iii) the status of the merger and HHH's corporate name; and (iv) that a medical facility would be able to lease out hotel rooms before the hotel even opened. 4. None of the HHH securities that Obenauer sold were ever registered with the Commission. 5. HHH's common stock was a penny stock as defined by the Exchange Act and rules promulgated thereunder at all times that Obenauer was selling it. D. With regard to Obenauer and Lynch, the Commission's Complaint alleged, among other things, that from approximately January to June 1997, Respondents and others solicited investors to purchase stock in another corporation (the "Company"), which purported to intend to build high priced condominiums near West Palm Beach, Florida. Respondents and others fraudulently offered and sold approximately $309,000 worth of that Company's stock. During the course of telephone calls soliciting investors, Respondents and others misrepresented that the Company already owned the land upon which it planned to build the condominiums and that it had obtained a construction loan. At least some of the stock certificates that Respondents and others delivered to investors were fictitious; they had been created without the Company's knowledge, using materials obtained at an office supply store. Obenauer did not give the funds he raised from investors to the Company, but instead kept those funds himself. E. On September 10, 1998 and September 17, 1998 (as supplemented on October 27, 1998), without admitting or denying any of the allegations contained in the Commission's complaint, except as to jurisdiction, Respondents consented to the entry of a final judgment of permanent injunction. On October 22, 1998 (as supplemented on October 30, 1998), the Court permanently enjoined Obenauer from future violations of Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933 ("Securities Act") and from Sections 10(b) and 15(a)(1) of the Exchange Act and Rule 10b-5 promulgated thereunder and permanently enjoined Lynch from future violations of Section 17(a) of the Securities Act and from Sections 10(b) and 15(a)(1) of the Exchange Act and Rule 10b-5 promulgated thereunder. III. Based on the foregoing, the Commission deems it appropriate and in the public interest to accept the Obenauer Offer and the Lynch Offer, and accordingly, IT IS HEREBY ORDERED, that: A. Obenauer is hereby (a) barred from association with any broker, dealer, municipal securities dealer, investment adviser or investment company and (b) barred from participating in any offering of a penny stock, including: (i) acting as a promoter, finder, consultant, or other person who engages in actions with a broker, dealer or issuer for purposes of the issuance or trading in any penny stock; or (ii) inducing or attempting to induce the purchase or sale of any penny stock. B. Lynch is hereby barred from association with any broker, dealer, municipal securities dealer, investment adviser or investment company, with the right to reapply for association after three years to the appropriate self-regulatory organization, or if there is none, to the Commission. By the Commission. Jonathan G. Katz Secretary