UNITED STATES OF AMERICA
In the Matter of
Marc Barhonovich and
Equity Advisors, Inc.,
| ORDER INSTITUTING CEASE-|
PURSUANT TO SECTION 8A OF THE
SECURITIES ACT OF 1933, MAKING
FINDINGS, AND IMPOSING A CEASE-
AND-DESIST ORDER AGAINST
MARC BARHONOVICH AND
EQUITY ADVISORS, INC.
The Securities and Exchange Commission ("Commission") deems it appropriate that cease-and-desist proceedings be, and hereby are, instituted pursuant to Section 8A of the Securities Act of 1933 ("Securities Act") against Respondents Marc Barhonovich ("Barhonovich") and Equity Advisors, Inc. ("Equity Advisors") (collectively "Respondents").
In anticipation of the institution of these proceedings, Respondents have submitted an Offer of Settlement (the "Offer"), which the 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 to which the Commission is a party, and without admitting or denying the findings herein, except as to the Commission's jurisdiction over them and the subject matter of these proceedings, Respondents consent to the entry of this Order Instituting Cease-and-Desist Proceedings Pursuant to Section 8A of the Securities Act of 1933, Making Findings, and Imposing a Cease-and-Desist Order against Marc Barhonovich and Equity Advisors, Inc. ("Order").
On the basis of this Order and Respondents' Offer, the Commission finds that:
1. Barhonovich, 41, is a resident of Lutz, Florida. He is the president and sole director of Equity Advisors.
2. Equity Advisors is a Florida corporation whose sole officer and director is Barhonovich.
3. New Millennium Media International, Inc. ("New Millennium"), is a public electronic advertising display company with its principal place of business in Safety Harbor, Florida. During the relevant period as described below, New Millennium retained Barhonovich to provide investor relations services.
4. Dtomi, Inc. ("Dtomi") is a public business-to-business research company also located in Safety Harbor, Florida. During the relevant period as described below, Dtomi also paid Barhonovich to provide investor relations services.
5. In the spring or early summer of 2001, New Millennium hired Barhonovich to provide investor relations services. New Millennium paid Barhonovich by giving him warrants to purchase 500,000 shares of New Millennium stock.
6. In approximately July 2001, acting on behalf of New Millennium, Barhonovich hired Paul A. Spray ("Spray") to prepare and help distribute a newsletter entitled OTC Investor's Edge to provide information on New Millennium. As a fee, Barhonovich gave Spray warrants to purchase 18,000 shares of New Millennium stock.
7. Spray and Thomas Loyd ("Loyd") of Houston, Texas together wrote an OTC Investor's Edge newsletter dated July 2001 discussing New Millennium. Barhonovich, through Equity Advisors, paid Loyd to fax the newsletter to the public between July 10 and August 16, 2001.8. The July 2001 newsletter contained misleading statements about New Millennium and unrealistic projections about New Millennium's potential revenue and projected share price. The information in the newsletter was inconsistent with or contradicted by New Millennium's public filings with the Commission.
9. Although Barhonovich hired Spray to write the newsletter and paid for the faxing, he did not review the newsletter before it was publicly disseminated.
10. The price and trading volume of New Millennium stock rose during the dates the newsletter was being faxed. During those dates, Barhonovich sold shares of New Millennium stock.
11. Later in 2001, Barhonovich hired Spray again to update the newsletter and redistribute it. Spray, again with Loyd's help, wrote another OTC Investor's Edge newsletter about New Millennium, dated October 2001. This newsletter contained misleading statements about the company similar to those in the July 2001 newsletter. Barhonovich again did not review the newsletter before it was publicly disseminated.
12. Loyd arranged for the faxing of the October 2001 newsletter to the public between October 19 and October 31, 2001. Barhonovich sold shares of New Millennium stock during that time.
13. In the fall of 2001, Dtomi hired Barhonovich to provide investor relations services. Dtomi paid Barhonovich in shares of stock. Barhonovich again retained Spray to write an OTC Investor's Edge newsletter about Dtomi.
14. Spray and Loyd together wrote a newsletter about Dtomi in November 2001 that contained misleading statements about the company and unrealistic revenue projections. The information in the newsletter was inconsistent with or contradicted by Dtomi's public filings with the Commission.
15. Although Spray sent Barhonovich a copy of the newsletter before it was publicly disseminated, Barhonovich did not review it.
16. Barhonovich, through Equity Advisors, paid Loyd to fax the newsletter to the public between November 19 and December 19, 2001. The price and trading volume of Dtomi stock rose during that time. During those dates, Barhonovich sold shares of Dtomi stock.
17. Based upon the aforesaid conduct, Barhonovich and Equity Advisors violated Sections 17(a)(2) and 17(a)(3) of the Securities Act.
In view of the foregoing, the Commission deems it appropriate to accept the Respondents' Offer.
Accordingly, it is hereby ORDERED that:
A. Respondents cease and desist from committing or causing any violations and any future violations of Sections 17(a)(2) and 17(a)(3) of the Securities Act; and
B. Respondent Barhonovich pay disgorgement and prejudgment interest totaling $82,041 to the United States Treasury within nine months of the entry of the Order as follows: (1) $20,511 shall be due and payable within seven days of the entry of the Order; (2) $20,510 shall be due and payable within three months of the entry of the Order; (3) $20,510 shall be due and payable within six months of the entry of the Order; and (4) $20,510 shall be due and payable within nine months of the entry of the Order. All payments shall be: (A) made by United States postal money order, certified check, bank cashier's check or bank money order; (B) made payable to the Securities and Exchange Commission; (C) hand-delivered or mailed to the Office of Financial Management, Securities and Exchange Commission, Operations Center, 6432 General Green Way, Alexandria, Stop 0-3, VA 22312; and (D) submitted under cover letter that identifies Marc Barhonovich as a Respondent in these proceedings and the file number of these proceedings. A copy of the cover letter and money order or check shall be sent to Robert K. Levenson, Senior Trial Counsel, Securities and Exchange Commission, 801 Brickell Avenue, Suite 1800, Miami, Florida, 33131. If Barhonovich fails to pay any single payment, or part of any single payment, within the precise time specified for such payment above, the installment payment terms of this section shall no longer apply, and the full amount of Barhonovich's remaining unpaid disgorgement and prejudgment interest shall be immediately due, owing, and payable, plus post-judgment interest on such remaining unpaid amount calculated at the rate of interest set forth in Rule 600(b) of the Commission's Rules of Practice, 17 C.F.R. § 201.600(b), from the date of the entry of the Order until such amount is paid in full.
By the Commission.
Jonathan G. Katz
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