UNITED STATES OF AMERICA Before the SECURITIES AND EXCHANGE COMMISSION SECURITIES ACT OF 1933 Release No. 7595 / October 27, 1998 ADMINISTRATIVE PROCEEDING File No. 3-9762 ______________________________________ In the Matter of THE HIGH GROWTH PUBLISHING GROUP and EVERETT GUST, Respondents. ______________________________________ ORDER INSTITUTING PUBLIC CEASE-AND-DESIST PROCEEDING, MAKING FINDINGS AND ISSUING A CEASE-AND-DESIST ORDER I. The Securities and Exchange Commission ("Commission") deems it appropriate that a public cease-and-desist proceeding pursuant to Section 8A of the Securities Act of 1933 ("Securities Act") be instituted against The High Growth Publishing Group ("HGPG") and Everett Gust ("Gust"). II. In anticipation of the institution of this proceeding, HGPG and Gust have each submitted an Offer of Settlement, each of which the Commission has determined to accept. Solely for the purpose of this proceeding 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 the findings contained herein, except that HGPG and Gust each admits the jurisdiction of the Commission over each of them and over the subject matter of this proceeding, HGPG and Gust each consents to the entry of this Order Instituting Public Cease-and-Desist Proceeding, Making Findings and Issuing a Cease-and-Desist Order ("Order") set forth below. Accordingly, IT IS ORDERED that a proceeding pursuant to Section 8A of the Securities Act be, and hereby is, instituted. III. On the basis of this Order and the Offers of Settlement submitted by HGPG and Gust, the Commission finds that: A. RESPONDENTS 1. The High Growth Publishing Group ("HGPG") is a Costa Mesa, California publishing business owned and operated under a fictitious business name by Everett Gust. HGPG publishes two Internet newsletters, The High Growth Newsletter and Portfolio Prospects. 2. Everett Gust ("Gust") is 64 years old and resides in Costa Mesa, California. B. FACTS 1. From March 1991 through March 1998, HGPG published The High Growth Newsletter, and from September 1994 through March 1998, HGPG published Portfolio Prospects. Both newsletters described the securities of small, low- priced, publicly-held companies that purportedly had strong growth potential and targeted "high-risk-reward investors." The newsletters were posted on HGPG's website on the Internet in or about September 1995. The High Growth Newsletter was also available to subscribers via the mail. HGPG claimed that in early 1998, The High Growth Newsletter had a circulation of between 5,000 and 10,000. 2. Gust owns and operates HGPG. He currently operates HGPG out of his home. Gust wrote HGPG's newsletters and was responsible for their content. 3. Issuers paid HGPG a fee to appear in the "PayDirt" section of The High Growth Newsletter and in Portfolio Prospects. The HGPG website contained a disclaimer that HGPG may be paid a fee by companies referred to in the newsletters and requested that viewers read the disclaimer before accessing HGPG's newsletters. In addition, HGPG disclosed in the "PayDirt" section of The High Growth Newsletter that HGPG received compensation from the companies listed, but did not disclose the amount of compensation received. HGPG did, in fact, receive compensation from certain issuers featured in the newsletters. 4. Section 17(b) of the Securities Act prohibits any person from publishing, giving publicity to, or circulating any notice, circular, advertisement, newspaper, article, letter, investment service or communication which describes a security for a consideration received or to be received, directly or indirectly, from an issuer, underwriter or dealer, without fully disclosing the receipt, whether past or prospective, of such consideration and the amount thereof. As a result of the conduct identified in paragraphs III.B.1. through III.B.3., HGPG and Gust violated Section 17(b) of the Securities Act by publishing investment newsletters, available on the Internet, which described certain securities without disclosing the amount of consideration received from the issuers of such securities. IV. Based on the foregoing, the Commission deems it appropriate to accept the Offers of Settlement submitted by HGPG and Gust. Accordingly, IT IS HEREBY ORDERED that: 1. Pursuant to Section 8A of the Securities Act, HGPG cease and desist from committing or causing any violation and any future violation of Section 17(b) of the Securities Act; and 2. Pursuant to Section 8A of the Securities Act, Gust cease and desist from committing or causing any violation and any future violation of Section 17(b) of the Securities Act. By the Commission. Jonathan G. Katz Secretary