==========================================START OF PAGE 1====== UNITED STATES OF AMERICA before the SECURITIES AND EXCHANGE COMMISSION SECURITIES ACT OF 1933 Release No. 7395 / February 21, 1997 SECURITIES EXCHANGE ACT OF 1934 Release No. 38320 / February 21, 1997 ADMINISTRATIVE PROCEEDING File No. 3-8772 ______________________________ : In the Matter of : : M. RIMSON & CO., INC., : ORDER MAKING FINDINGS,IMPOSING MOSHE RIMSON, : REMEDIAL SANCTIONS AND ISSUING JONATHAN MENDE & : CEASE-AND-DESIST ORDERS AGAINST ASSOCIATES, INC., : RESPONDENTS JONATHAN MENDE & JONATHAN AURIELIO MENDE, : ASSOCIATES, INC.JONATHAN AURIELIO TODD LEVAUGHN HICKMAN, : MENDE, TODD LEVAUGHN HICKMAN, CHRISTIAN JEAN-MARIE GIRODET, : MITCHELL ARGUIRRE AND YEVGENY G. MITCHELL AGUIRRE, : SHKOLKO CLAUDIO PETER IODICE, III, : ALEX DAVID SHINDMAN, : YEVGENY G. SHKILKO, : DAVID FEYJIN, and : ROGER DANTONI, III, : : Respondents. : ______________________________: I. On August 3, 1995, the Securities and Exchange Commission ("Commission") issued an Order Instituting Public Administrative and Cease-and-Desist Proceedings and Notice of Hearing Pursuant to Section 8A of the Securities Act of 1933 and Sections 15(b), 19(h), and 21C of the Securities Exchange Act of 1934 (the "Order Instituting Proceedings") against twelve respondents, including Jonathan Mende & Associates, Inc. ("Mende & Assoc."), Jonathan Aurielio Mende ("Mende"), Todd Levaughn Hickman ("Hickman"), Mitchell Aguirre ("Aguirre"), and Yevgeny G. Shkilko ("Shkilko") (these five being the "Settling Respondents"), to determine whether the allegations contained in the Order Instituting ==========================================START OF PAGE 2====== Proceedings were true, what remedial sanctions, if any, were appropriate in the public interest, whether cease-and-desist orders should issue, and whether disgorgement and civil penalties should be imposed. The Settling Respondents have submitted Offers of Settlement ("Offers") which the Commission has determined to accept. Solely for purposes 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 allegations contained in the Order Instituting Proceedings or the findings contained in this Order Making Findings, Imposing Remedial Sanctions and Issuing Cease-and-Desists Orders Against Respondents Mende & Assoc., Mende, Hickman, Aguirre, and Shkilko ("Order"), except as to the jurisdiction of the Commission, which is admitted, the Settling Respondents, by their Offers, consent to the entry of the findings, sanctions and cease-and-desist orders set forth below. II. On the basis of the Order Instituting Proceedings, this Order and the Offers submitted by the Settling Respondents, the Commission makes the following findings.-[1]- A. Mende & Assoc. 1. Mende & Assoc. was incorporated in New York on March 1, 1993, has never been registered as a broker-dealer with the Commission, and was owned and operated by Respondents Mende and Hickman. 2. Mende, 28, of Staten Island, New York, was associated with M. Rimson & Co., Inc. ("Rimson & Co.") from May to December 1993, and was a registered representative ("RR") at the firm from June 15, 1993 to December 1993. Mende was the president and a co-owner and operator of Mende & Assoc., an unregistered broker-dealer. 3. J.A. Industries, Inc. ("JIND") is a Delaware corporation organized on July 21, 1987. JIND securities are registered with the Commission (as of March 1, 1994) pursuant to Section 12(g) of the Securities Exchange Act of 1934 ("Exchange Act"), and have been quoted on the National Association of Securities Dealers, Inc.'s ("NASD") Over-the-Counter Bulletin ---------FOOTNOTES---------- -[1]- Any findings contained in this Order are made pursuant to the Offers submitted by the Settling Respondents and are not binding on any other person or entity named as a respondent in this or any other proceeding. ==========================================START OF PAGE 3====== Board ("OTC BB") since June 1990, originally under the symbol "JAII" and later "JIND." At all relevant times, JIND was a penny stock within the meaning of Section 3(a)(51) of the Exchange Act and Rule 3a51-1 thereunder. 4. During the period from about March 1993 through October 1993, Mende & Assoc. willfully violated Section 15(a) of the Exchange Act, in that Mende & Assoc. made use of the mails or other means or instrumentalities of interstate commerce to effect transactions in, or to induce or attempt to induce the purchase or sale of, a security, without being registered in accordance with Section 15(b) of the Exchange Act. For example, from about March through October 1993, Mende & Assoc., without being registered as a broker-dealer with the Commission, operated in offices at 26 Broadway, New York, New York, and employed several salespersons who solicited and effected transactions in JIND securities, and other securities, with public customers. 5. Mende & Assoc. willfully violated Section 17(a) of the Securities Act of 1933 ("Securities Act") in that, in the offer or sale of securities, by the use of the means or instruments of transportation or communication in interstate commerce or by the use of the mails, directly or indirectly, it 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 the light of the circumstances under which they were made, not misleading; or engaged in transactions, practices or courses of business which operated or would operate as a fraud or deceit upon the purchaser. For example: During the period from about March 1993 through October 1993, Mende & Assoc. salesmen, acting at the direction of the firm's principals, made material misrepresentations and omissions in the offer or sale of securities, including, but not limited to, JIND securities, by, for example: a. making baseless price predictions; b. making false or misleading statements that JIND shares would be listed on the American Stock Exchange or on Nasdaq; c. making materially false or misleading statements or omissions concerning the experience and expertise of Mende & Assoc. personnel; d. disseminating false or misleading written materials concerning the financial condition and history of JIND, and the experience and expertise of Mende & Assoc. personnel; ==========================================START OF PAGE 4====== e. falsely identifying themselves to customers; f. failing to disclose the risks of investing in JIND common stock, including failing to disclose that JIND is a speculative penny stock; g. failing to disclose that Mende & Assoc. was an unregistered broker-dealer, and impliedly holding Mende & Assoc. out as a registered broker- dealer; and h. failing to disclose that Mende & Assoc. and its salesmen received their compensation from a promoter of JIND securities. 6. Mende & Assoc. willfully violated Section 10(b) of the Exchange Act and Rule 10b-5 thereunder in that, directly or indirectly, by use of the means or instrumentalities of interstate commerce, or of the mails, in connection with the purchase or sale of securities, it 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 acts, practices or courses of business which operated or would operate as a fraud or deceit. For example, it engaged in the conduct described in paragraph II.,A.,5. above. 7. During the period from about March 1993 through October 1993, Mende & Assoc. willfully violated Section 15(c) of the Exchange Act and Rule 15c1-2 thereunder in that it made use of the mails or other means or instrumentalities of interstate commerce to effect transactions in, or to induce or attempt to induce the purchase or sale of, securities otherwise than on a national securities exchange of which it is a member by means of manipulative, deceptive, or other fraudulent devices or contrivances; engaged in acts, practices or courses of business which operated or would operate as a fraud upon any person; and made untrue statements of material fact and omitted to state material facts necessary in order to make the statement made, in light of the circumstances under which they were made, not misleading, which statements or omissions were made with knowledge or reasonable grounds to believe that they were untrue or misleading. For example, Mende & Assoc., by and through its officers and salesmen, engaged in the conduct described in paragraphs II.,A.,5. and 6., above. 8. During the period from about March through October 1993, Mende & Assoc. willfully violated Section 15(g) of the Exchange Act and Rules 15g-2 through 15g-6 and 15g-9 thereunder, in that, by the use of the means or instrumentalities of interstate commerce or by the use of the mails, Mende & Assoc., ==========================================START OF PAGE 5====== without complying with the requirements of Section 15(g) of the Exchange Act and Rules 15g-2 through 15g-6 and 15g-9 thereunder, induced or attempted to induce customers to purchase or sell JIND securities, a penny stock. For example, Mende & Assoc., among other things, failed to: (1) furnish to their customers a Schedule 15G Risk Disclosure Document prior to effecting their transactions in JIND shares, as required by Rule 15g-2; (2) comply with the requirements to disclose to customers within the required time period such information as bid and offer quotations, the aggregate amount of the firm's compensation, and the aggregate amount of any associated person's compensation, as required by Rules 15g-3 through 15g-5; and (3) comply with the requirement to provide customers with monthly statements containing market value and other information, as required by Rule 15g-6. Mende & Assoc. failed to approve customer accounts for transactions in penny stocks in accordance with the procedures set forth in Rule 15g-9(b). B. Mende 1. Mende willfully aided and abetted and caused Mende & Assoc.'s violations of Section 15(a) of the Exchange Act in that he was the president of, and directed the securities business conducted by, Mende & Assoc. For example: On or about March 1, 1993, Mende caused Mende & Assoc. to be formed as a New York corporation. Soon after the firm's formation, Mende established office space in lower Manhattan, recruited and hired a sales force of approximately ten salesmen, and operated Mende & Assoc. as an unregistered broker-dealer from about March through October 1993. As part of that conduct, Mende arranged for Mende & Assoc. to sell JIND securities to customers and to be compensated for these sales by a promoter of JIND, or otherwise; 2. Mende willfully violated Section 17(a) of the Securities Act in that, in the offer or sale of securities, by the use of the means or instruments of transportation or communication in interstate commerce or by the use of the mails, directly or indirectly, he 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 the light of the circumstances under which they were made, not misleading; or engaged in transactions, practices or courses of business which operated or would operate as a fraud or deceit upon the purchaser. For example: During the period from about March 1993 through October 1993, Mende, and the Mende & Assoc. salesmen acting at his direction, made material misrepresentations and omissions in the offer or sale of securities, including, but not limited to, JIND securities, by, for example: a. making baseless price predictions; ==========================================START OF PAGE 6====== b. making false or misleading statements that JIND shares would be listed on the American Stock Exchange or on Nasdaq; c. making materially false or misleading statements or omissions concerning the experience and expertise of Mende & Assoc. personnel; d. disseminating false or misleading written materials concerning the financial condition and history of JIND, and the experience and expertise of Mende & Assoc. personnel; e. falsely identifying themselves to customers; f. failing to disclose the risks of investing in JIND common stock, including failing to disclose that JIND is a speculative penny stock; g. failing to disclose that Mende & Assoc. was an unregistered broker-dealer, and impliedly holding Mende & Assoc. out as a registered broker- dealer; and h. failing to disclose that Mende & Assoc. and its salesmen received their compensation from a promoter of JIND securities. 3. Mende willfully violated Section 10(b) of the Exchange Act and Rule 10b-5 thereunder in that, directly or indirectly, by use of the means or instrumentalities of interstate commerce, or of the mails, in connection with the purchase or sale of securities, 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 acts, practices or courses of business which operated or would operate as a fraud or deceit. For example, he engaged in the conduct described in paragraph II.,B.,2. above. 4. During the period from about March 1993 through October 1993, Mende willfully aided and abetted and caused Mende & Assoc.'s violations of Section 15(c) of the Exchange Act and Rule 15c1-2 thereunder in that it made use of the mails or other means or instrumentalities of interstate commerce to effect transactions in, or to induce or attempt to induce the purchase or sale of, securities otherwise than on a national securities exchange of which it is a member by means of manipulative, deceptive, or other fraudulent devices or contrivances; engaged in acts, practices or courses of business which operated or would operate as a fraud upon any person; and made untrue statements of ==========================================START OF PAGE 7====== material fact and omitted to state material facts necessary in order to make the statement made, in light of the circumstances under which they were made, not misleading, which statements or omissions were made with knowledge or reasonable grounds to believe that they were untrue or misleading. For example, Mende & Assoc., by and through its officers and salesmen, engaged in the conduct described in paragraphs II.,B.,2. and 3., above. 5. During the period from about March through October 1993, Mende willfully aided and abetted and caused Mende & Assoc.'s violations of Section 15(g) of the Exchange Act and Rules 15g-2 through 15g-6 and 15g-9 thereunder, in that, by the use of the means or instrumentalities of interstate commerce or by the use of the mails, Mende & Assoc., without complying with the rules promulgated under, or with the requirements of, Section 15(g) of the Exchange Act and Rules 15g-2 through 15g-6 and 15g-9 thereunder, induced or attempted to induce customers to purchase or sell JIND securities, a penny stock. Mende & Assoc. violated the penny stock disclosure rules in connection with their sales of JIND common stock at a time when Mende was responsible for identifying penny stocks and for ensuring that Mende & Assoc. complied with those rules. For example, Mende & Assoc., among other things, failed to: (1) furnish to their customers a Schedule 15G Risk Disclosure Document prior to effecting their transactions in JIND shares, as required by Rule 15g-2; (2) comply with the requirements to disclose to customers within the required time period such information as bid and offer quotations, the aggregate amount of the firm's compensation, and the aggregate amount of any associated person's compensation, as required by Rules 15g-3 through 15g-5; and (3) comply with the requirement to provide customers with monthly statements containing market value and other information, as required by Rule 15g-6. Mende & Assoc. also failed to approve customer accounts for transactions in penny stocks in accordance with the procedures set forth in Rule 15g-9(b). C. Hickman 1. Hickman, 31, of Bronx, New York, was associated with Rimson & Co. from August to November 1993, but was never approved by the NASD as a registered representative at the firm. Hickman was a co-owner, operator, and sales manager of Jonathan Mende & Associates, Inc., an unregistered broker-dealer. 2. Hickman willfully aided and abetted and caused Mende & Assoc.'s violations of Section 15(a) of the Exchange Act in that he participated as a principal in, and directed the securities business conducted by, Mende & Assoc. For example: Hickman was an officer of Mende & Assoc., and was designated and functioned as the Director of Retail Sales. Hickman recruited approximately eight salesmen and he directed and supervised the ==========================================START OF PAGE 8====== securities sales activities of Mende & Assoc. and its salesmen. In addition, Hickman distributed compensation to the Mende & Assoc. salesmen. 3. Hickman willfully violated Section 17(a) of the Securities Act in that, in the offer or sale of securities, by the use of the means or instruments of transportation or communication in interstate commerce or by the use of the mails, directly or indirectly, he 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 the light of the circumstances under which they were made, not misleading; or engaged in transactions, practices or courses of business which operated or would operate as a fraud or deceit upon the purchaser. For example: During the period from about March 1993 through October 1993, Hickman, and Mende & Assoc. salesmen acting at his direction, made material misrepresentations and omissions in the offer or sale of securities, including, but not limited to, JIND securities, by, for example: a. making baseless price predictions; b. making false or misleading statements that JIND shares would be listed on the American Stock Exchange or on Nasdaq; c. making materially false or misleading statements or omissions concerning the experience and expertise of Mende & Assoc. personnel; d. disseminating false or misleading written materials concerning the financial condition and history of JIND, and the experience and expertise of Mende & Assoc. personnel; e. falsely identifying themselves to customers; f. failing to disclose the risks of investing in JIND common stock, including failing to disclose that JIND is a speculative penny stock; g. failing to disclose that Mende & Assoc. was an unregistered broker-dealer, and impliedly holding Mende & Assoc. out as a registered broker- dealer; and h. failing to disclose that Mende & Assoc. and its salesmen received their compensation from a promoter of JIND securities. 4. Hickman willfully violated Section 10(b) of the ==========================================START OF PAGE 9====== Exchange Act and Rule 10b-5 thereunder in that, directly or indirectly, by use of the means or instrumentalities of interstate commerce, or of the mails, in connection with the purchase or sale of securities, 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 acts, practices or courses of business which operated or would operate as a fraud or deceit. For example, he engaged in the conduct described in paragraph II.,C.,3. above. 5. During the period from about March 1993 through October 1993, Hickman willfully aided and abetted and caused Mende & Assoc.'s violations of Section 15(c) of the Exchange Act and Rule 15c1-2 thereunder in that it made use of the mails or other means or instrumentalities of interstate commerce to effect transactions in, or to induce or attempt to induce the purchase or sale of, securities otherwise than on a national securities exchange of which it is a member by means of manipulative, deceptive, or other fraudulent devices or contrivances; engaged in acts, practices or courses of business which operated or would operate as a fraud upon any person; and made untrue statements of material fact and omitted to state material facts necessary in order to make the statement made, in light of the circumstances under which they were made, not misleading, which statements or omissions were made with knowledge or reasonable grounds to believe that they were untrue or misleading. For example, Mende & Assoc., by and through its officers and salesmen, engaged in the conduct described in paragraphs II.,C.,3. and 4., above. D. Aguirre 1. Aguirre, 32, of Queens, New York, was associated with Rimson & Co., a registered broker-dealer, from May 1993 to February 1994, but was never approved by the NASD as a RR of the firm. 2. World Entertainment Concepts, Inc. ("WECI") is a New York corporation organized on June 12, 1990. WECI securities are quoted on the NASD's OTC BB (symbol "WECI"). At all relevant times, WECI was a penny stock within the meaning of Section 3(a)(51) of the Exchange Act and Rule 3a51-1 thereunder, and was a speculative security. 3. Aguirre willfully violated Section 17(a) of the Securities Act in that, in the offer or sale of securities, by the use of the means or instruments of transportation or communication in interstate commerce or by the use of the mails, directly or indirectly, he 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 ==========================================START OF PAGE 10====== 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 operated or would operate as a fraud or deceit upon the purchaser. For example: a. In or about May and June 1993, in connection with an account of a customer who had purchased securities from Aguirre, Aguirre misappropriated the customer's funds, forged the customer's signatures on Rimson & Co. checks or otherwise made use of forged customer signatures on Rimson & Co. checks, and misappropriated or converted the customer's checks and customer funds. He also failed to disclose the misappropriation, conversion or forgeries to his customer; b. During the period from about May 1993 through February 1994, Aguirre made material misrepresentations and omissions in the offer or sale of securities, including, but not limited to, WECI securities, by, for example: (1) making baseless price predictions; (2) making false statements that WECI shares would be listed on Nasdaq; (3) effecting unauthorized trades and making material misrepresentations and omissions in connection therewith; and (4) failing to disclose the risks of investing in WECI securities, including failing to disclose that WECI is a speculative penny stock. 4. Aguirre willfully violated Section 10(b) of the Exchange Act and Rule 10b-5 thereunder in that, directly or indirectly, by use of the means or instrumentalities of interstate commerce, or of the mails, in connection with the purchase or sale of securities, 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 acts, practices or courses of business which operated or would operate as a fraud or deceit. For example, he engaged in the conduct described in paragraph II.D.3., above. 5. During the period from about June 10, 1993 to February 1994, Aguirre willfully aided and abetted and caused ==========================================START OF PAGE 11====== Rimson & Co.'s violations of Section 15(b) of the Exchange Act and Rule 15b7-1 thereunder, in that Rimson & Co., a registered broker-dealer, effected transactions in, or induced the purchase or sale of, securities where natural persons associated with Rimson & Co. who effected or were involved in effecting such transactions were not registered or approved in accordance with the standards of training, experience, competence, and other standards (including but not limited to submitting and maintaining all required forms, paying all required fees, and passing any required examinations) established by the rules of the NASD, the national securities association of which Rimson & Co. is a member. For example, from about May 1993 through February 1994, Aguirre worked at Rimson & Co., held himself out as a Rimson & Co. broker, effected transactions in securities, and was otherwise involved in effecting transactions in securities, while he was not registered or approved in accordance with NASD rules. 6. During the period from about May 1993 to February 1994, Aguirre willfully aided and abetted and caused Rimson & Co.'s violations of Section 17(a) of the Exchange Act and Rule 17a-3 thereunder, in that Rimson & Co. failed to make and keep for prescribed periods such records as the Commission, by rule, prescribes as necessary and appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Exchange Act. As part of that conduct, Rimson & Co. created and maintained forged or falsified books and records, or books and records containing otherwise inaccurate or untrue information. Aguirre willfully aided and abetted and caused that conduct by, for example, willfully aiding and abetting and causing the creation of new account forms and order tickets which contained false information including, but not limited to, false names and false RR numbers of RRs who were not actually involved in effecting any transactions with the customer. E. Shkilko 1. Shkilko, 25, of Queens, New York, was a RR at Rimson & Co. from October 1993 to April 1994, and again from June to November 1994. 2. Shkilko willfully aided and abetted and caused violations of Section 17(a) of the Securities Act by Respondent David Feyjin ("Feyjin") and Respondent Roger Dantoni III ("Dantoni") in that, in the offer or sale of securities, by the use of the means or instruments of transportation or communication in interstate commerce or by the use of the mails, directly or indirectly, he willfully aided and abetted and caused them to employ devices, schemes or artifices to defraud; obtain money or property by means of untrue statements of material facts or omitted to state material facts necessary in order to make the ==========================================START OF PAGE 12====== statements made, in the light of the circumstances under which they were made, not misleading; or engage in transactions, practices or courses of business which operated or would operate as a fraud or deceit upon the purchaser. For example, from about June 1994 through November 1994: a. while working in unregistered offices doing business as a broker-dealer, or in registered branch offices of another broker-dealer, Feyjin and Dantoni misrepresented themselves to be "Gene Shkilko", a Rimson & Co. RR, and solicited sales of securities with public customers. Shkilko authorized Feyjin and Dantoni to misrepresent themselves as "Gene Shkilko" while soliciting securities transactions with customers. Shkilko received customer orders transmitted by Feyjin and Dantoni from outside the offices of Rimson & Co., he opened the customer accounts at Rimson & Co., and he had the orders executed at Rimson & Co. under Shkilko's RR number; b. Feyjin and Dantoni willfully violated Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder in connection with their solicitations and sales of securities while misrepresenting themselves to be "Gene Shkilko of M. Rimson & Co., Inc." and transmitting their customers's orders to Shkilko at Rimson & Co.; and c. Feyjin and Dantoni received compensation from a person who owned or controlled the securities being offered and sold to their customers, and they failed to disclose the source of their compensation to their customers. 3. Shkilko willfully aided and abetted and caused violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder by Feyjin and Dantoni in that, directly or indirectly, by use of the means or instrumentalities of interstate commerce, or of the mails, in connection with the purchase or sale of securities, he willfully aided and abetted and caused them to employ devices, schemes or artifices to defraud; make 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 engage in acts, practices or courses of business which operated or would operate as a fraud or deceit. For example, he engaged in the conduct described in paragraph II.E.2., above. 4. During the period from about May 1993 to February 1994, Shkilko willfully aided and abetted and caused Rimson & ==========================================START OF PAGE 13====== Co.'s violations of Section 17(a) of the Exchange Act and Rule 17a-3 thereunder, in that Rimson & Co. failed to make and keep for prescribed periods such records as the Commission, by rule, prescribes as necessary and appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Exchange Act. As part of that conduct, Rimson & Co. created and maintained forged or falsified books and records, or books and records containing otherwise inaccurate or untrue information. Shkilko willfully aided and abetted and caused that conduct by, for example, creating new account forms and order tickets which contained false information including, but not limited to, false names and false RR numbers of RRs who were not actually involved in soliciting any transactions with the customer. III. In view of the foregoing, the Commission deems it appropriate and in the public interest to accept the Offers, impose the remedial and other sanctions, and issue cease-and- desist orders, as specified in the Offers. ACCORDINGLY, IT IS HEREBY ORDERED, that: A. Mende & Assoc. 1. Mende & Assoc. shall cease and desist from committing or causing any violation and any future violation of Section 17(a) of the Securities Act or Sections 10(b), 15(a), 15(c) or 15(g) of the Exchange Act and Rules 10b-5, 15c1-2, 15g-2 through 15g-6, and 15g-9 thereunder; 2. Mende & Assoc. shall pay disgorgement in the amount of $205,175, plus prejudgment interest thereon. However, based upon the sworn representations in Mende & Assoc.'s Statement of Financial Condition dated December 10, 1995, and submitted to the Commission, payment of all of the disgorgement and prejudgment interest is waived, contingent upon the accuracy and completeness of its Statement of Financial Condition; and 3. No civil money penalty is imposed against Mende & Assoc. based upon Mende & Assoc.'s sworn representations in its Statement of Financial Condition dated December 10, 1995, and submitted to the Commission. The determination not to impose a civil money penalty and to waive payment of the disgorgement and interest thereon is contingent upon the accuracy and completeness of its Statement of Financial Condition executed under oath by Mende & Assoc., by its president, Mende, on December 12, 1995. If at any time following the entry of the Order, the Division of ==========================================START OF PAGE 14====== Enforcement obtains information indicating that Mende & Assoc.'s representations to the Commission concerning its income, assets, liabilities or net worth were fraudulent, misleading, inaccurate or incomplete in any material respect as of the time such representations were made, the Division of Enforcement may, at its sole discretion and without prior notice to Mende & Assoc., petition the Administrative Law Judge for an order requiring Mende & Assoc. to pay disgorgement of $205,175, plus prejudgment and postjudgment interest thereon, and civil money penalties. In connection with any such petition, the only issues shall be whether the financial information provided by Mende & Assoc. was fraudulent, misleading, inaccurate or incomplete in any material respect as of the time such representations were made, and the amount of civil penalty to be imposed. In any such petition, the Division of Enforcement may move the Administrative Law Judge to consider all available remedies. Mende & Assoc. may not, by way of a defense to such a petition, challenge the validity of the Offer of Settlement or the Order, contest the allegations in the Order Instituting Proceedings, contest the findings contained in the Order, contest the amount of disgorgement and interest, or assert that disgorgement or the payment of a civil penalty should not be ordered. IT IS FURTHER ORDERED, that: B. Mende 1. Mende be, and hereby is, barred from association with any broker, dealer, investment company, investment adviser or municipal securities dealer, effective immediately; 2. Mende be and hereby is barred from participating in the offering of any 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; 3. Mende shall cease and desist from committing or causing any violation and any future violation of Section 17(a) of the Securities Act or Sections 10(b) and 15(a) of the Exchange Act and Rule 10b-5 thereunder; 4. Mende shall cease and desist from causing any violation and any future violation of Sections 15(c) and 15(g) of the Exchange Act and Rules 15c1-2, 15g-2 through 15g-6, and 15g-9 thereunder; 5. Mende shall pay disgorgement in the amount of $205,175, plus prejudgment interest thereon. However, based upon the sworn representations in Mende's Statement of Financial ==========================================START OF PAGE 15====== Condition dated December 10, 1995, and submitted to the Commission, payment of all of the disgorgement and prejudgment interest is waived, contingent upon the accuracy and completeness of his Statement of Financial Condition; and 6. No civil penalty is imposed against Mende based upon Mende's sworn representations in his Statement of Financial Condition dated December 10, 1995, and submitted to the Commission. The determination not to impose a civil money penalty and to waive payment of the disgorgement and interest thereon is contingent upon the accuracy and completeness of his Statement of Financial Condition executed under oath by Mende on December 12, 1995. If at any time following the entry of the Order, the Division of Enforcement obtains information indicating that Mende's representations to the Commission concerning his income, assets, liabilities or net worth were fraudulent, misleading, inaccurate or incomplete in any material respect as of the time such representations were made, the Division of Enforcement may, at its sole discretion and without prior notice to Mende, petition the Administrative Law Judge for an order requiring Mende to pay disgorgement of $205,175, plus prejudgment and postjudgment interest thereon, and civil money penalties. In connection with any such petition, the only issues shall be whether the financial information provided by Mende was fraudulent, misleading, inaccurate or incomplete in any material respect as of the time such representations were made, and the amount of civil penalty to be imposed. In any such petition, the Division of Enforcement may move the Administrative Law Judge to consider all available remedies. Mende may not, by way of a defense to such a petition, challenge the validity of this Offer of Settlement or the Order, contest the allegations of the Order Instituting Proceedings, contest the findings contained in the Order, contest the amount of disgorgement and interest, or assert that disgorgement or the payment of a civil penalty should not be ordered. IT IS FURTHER ORDERED, that: C. Hickman 1. Hickman be, and hereby is, barred from association with any broker, dealer, investment company, investment adviser or municipal securities dealer, effective immediately; 2. Hickman be, and hereby is, barred from participating in the offering of any 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; 3. Hickman shall cease and desist from committing or ==========================================START OF PAGE 16====== causing any violation and any future violation of Section 17(a) of the Securities Act or Sections 10(b) and 15(a) of the Exchange Act and Rule 10b-5 thereunder; 4. Hickman shall cease and desist from causing any violation and any future violation of Section 15(c) of the Exchange Act and Rule 15c1-2 thereunder; 5. Hickman shall pay disgorgement in the amount of $29,136, plus prejudgment interest thereon. However, based upon the sworn representations in Hickman's Statement of Financial Condition dated May 30, 1996, and submitted to the Commission, payment of all of the disgorgement and prejudgment interest is waived, contingent upon the accuracy and completeness of his Statement of Financial Condition; and 6. No civil penalty is imposed against Hickman based upon Hickman's sworn representations in his Statement of Financial Condition dated May 30, 1996, and submitted to the Commission. The determination not to impose a civil money penalty and to waive payment of the disgorgement and interest thereon is contingent upon the accuracy and completeness of his Statement of Financial Condition executed under oath by Hickman on May 30, 1996. If at any time following the entry of the Order, the Division of Enforcement obtains information indicating that Hickman's representations to the Commission concerning his income, assets, liabilities or net worth were fraudulent, misleading, inaccurate or incomplete in any material respect as of the time such representations were made, the Division of Enforcement may, at its sole discretion and without prior notice to Hickman, petition the Administrative Law Judge for an order requiring Hickman to pay disgorgement of $29,136, plus prejudgment and postjudgment interest thereon, and civil money penalties. In connection with any such petition, the only issues shall be whether the financial information provided by Hickman was fraudulent, misleading, inaccurate or incomplete in any material respect as of the time such representations were made, and the amount of civil penalty to be imposed. In any such petition, the Division of Enforcement may move the Administrative Law Judge to consider all available remedies. Hickman may not, by way of a defense to such a petition, challenge the validity of this Offer of Settlement or the Order, contest the allegations of the Order Instituting Proceedings, contest the findings contained in the Order, contest the amount of disgorgement and interest, or assert that disgorgement or the payment of a civil penalty should not be ordered. IT IS FURTHER ORDERED, that: D. Aguirre 1. Aguirre be, and hereby is, barred from association ==========================================START OF PAGE 17====== with any broker, dealer, investment company, investment adviser or municipal securities dealer, effective immediately; 2. Aguirre be, and hereby is, barred from participating in the offering of any 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; 3. Aguirre shall cease and desist from committing or causing any violation and any future violation of Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder; 4. Aguirre shall cease and desist from causing any violation and any future violation of Sections 15(b) and 17(a) of the Exchange Act and Rules 15b7-1 and 17a-3 thereunder; 5. Aguirre shall pay disgorgement in the amount of $64,598.36, plus prejudgment interest thereon. However, based upon the sworn representations in Aguirre's Statement of Financial Condition dated May 20, 1996, and submitted to the Commission, payment of all of the disgorgement and prejudgment interest is waived, contingent upon the accuracy and completeness of his Statement of Financial Condition; and 6. No civil penalty is imposed against Aguirre based upon Aguirre's sworn representations in his Statement of Financial Condition dated May 20, 1996, and submitted to the Commission. The determination not to impose a civil money penalty and to waive payment of the disgorgement and interest thereon is contingent upon the accuracy and completeness of his Statement of Financial Condition executed under oath by Aguirre on May 20, 1996. If at any time following the entry of the Order, the Division of Enforcement obtains information indicating that Aguirre's representations to the Commission concerning his income, assets, liabilities or net worth were fraudulent, misleading, inaccurate or incomplete in any material respect as of the time such representations were made, the Division of Enforcement may, at its sole discretion and without prior notice to Aguirre, petition the Administrative Law Judge for an order requiring Aguirre to pay disgorgement of $64,598.36, plus prejudgment and postjudgment interest thereon, and civil money penalties. In connection with any such petition, the only issues shall be whether the financial information provided by Aguirre was fraudulent, misleading, inaccurate or incomplete in any material respect as of the time such representations were made, and the amount of civil penalty to be imposed. In any such petition, the Division of Enforcement may move the Administrative Law Judge to consider all available remedies. Aguirre may not, by way of a defense to such a petition, challenge the validity of ==========================================START OF PAGE 18====== this Offer of Settlement or the Order, contest the allegations of the Order Instituting Proceedings, contest the findings contained in the Order, contest the amount of disgorgement and interest, or assert that disgorgement or the payment of a civil penalty should not be ordered. IT IS FURTHER ORDERED, that: E. Shkilko 1. Shkilko be, and hereby is, barred from association with any broker, dealer, investment company, investment adviser or municipal securities dealer, effective immediately, provided, however, that Shkilko shall have the right to reapply for such association to the appropriate self-regulatory organization or, where there is none, to the Commission, after two years from the date of the entry of this Order; 2. Shkilko be, and hereby is, barred from participating in the offering of any 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; 3. Shkilko shall cease and desist from committing or causing any violation and any future violation of Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder; 4. Shkilko shall cease and desist from causing any violation and any future violation of Section 17(a) of the Exchange Act and Rule 17a-3 thereunder; 5. Shkilko shall pay disgorgement in the amount of $2,000, plus prejudgment interest thereon. However, based upon the sworn representations in Shkilko's Statement of Financial Condition dated November 28, 1995, and submitted to the Commission, payment of all of the disgorgement and prejudgment interest is waived, contingent upon the accuracy and completeness of his Statement of Financial Condition; and 6. No civil money penalty is imposed against Shkilko based upon Shkilko's sworn representations in his Statement of Financial Condition dated November 28, 1995, and submitted to the Commission. The determination not to impose a civil money penalty and to waive payment of the disgorgement and interest thereon is contingent upon the accuracy and completeness of his Statement of Financial Condition executed under oath by Shkilko on November 29, 1995. If at any time following the entry of the Order, the Division of Enforcement obtains information indicating that Shkilko's representations to the Commission concerning his ==========================================START OF PAGE 19====== income, assets, liabilities or net worth were fraudulent, misleading, inaccurate or incomplete in any material respect as of the time such representations were made, the Division of Enforcement may, at its sole discretion and without prior notice to Shkilko, petition the Administrative Law Judge for an order requiring Shkilko to pay disgorgement of $2,000, plus prejudgment and postjudgment interest thereon, and civil money penalties. In connection with any such petition, the only issues shall be whether the financial information provided by Shkilko was fraudulent, misleading, inaccurate or incomplete in any material respect as of the time such representations were made, and the amount of civil penalty to be imposed. In any such petition, the Division of Enforcement may move the Administrative Law Judge to consider all available remedies. Shkilko may not, by way of a defense to such a petition, challenge the validity of this Offer of Settlement or the Order, contest the allegations of the Order Instituting Proceedings, contest the findings contained in the Order, contest the amount of disgorgement and interest, or assert that disgorgement or the payment of a civil penalty should not be ordered. By the Commission. Jonathan G. Katz Secretary