UNITED STATES OF AMERICA
SECURITIES AND EXCHANGE COMMISSION
SECURITIES ACT OF 1933
Release No. 7586 / September 24, 1998
SECURITIES EXCHANGE ACT OF 1934
Release No. 40469 / September 24, 1998
File No. 3-9719
ORDER INSTITUTING PUBLIC CEASE-AND-DESIST PROCEEDINGS PURSUANT TO SECTION 8A OF THE SECURITIES ACT OF 1933 AND SECTION 21C OF THE SECURITIES EXCHANGE ACT OF 1934, AND MAKING FINDINGS AND IMPOSING A CEASE-AND-DESIST ORDER
In the Matter of Global Casinos, Inc. and William P. Martindale, Respondents.
The Securities and Exchange Commission ("Commission") deems it appropriate to institute public cease and desist proceedings against Global Casinos, Inc. "(Global Casinos") and William P. Martindale ("Martindale") pursuant to Section 8A of the Securities Act of 1933 ("Securities Act") and Section 21C of the Securities Exchange Act of 1934 ("Exchange Act").
In anticipation of the institution of these proceedings, Global Casinos and Martindale have submitted Offers of Settlement ("Offers"), 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 in which the Commission is a party, and without admitting or denying the findings herein, except to admit the jurisdiction of the Commission over them and over the matters set forth herein, Global Casinos and Martindale have consented to the entry of this Order instituting proceedings, making findings and imposing sanctions set forth below.
On the basis of this Order and the Offers submitted by Global Casinos and Martindale, the Commission finds that: 1
A. The Respondents
1. Respondent Global Casinos is a Utah corporation headquartered in Denver, Colorado. Global Casinos formerly was known as Morgro Chemical Co. ("Morgro") and manufactured lawn care and other chemical products. In late 1993, the company sold its chemical assets, changed its name to Global Casinos, and acquired interests in various casino properties.
2. Respondent Martindale, age 57, a Texas resident, was the chairman of Global Casinos' board of directors between late 1993 and November 1996.
1. From about December 1993 through about May 1995, Martindale and Global Casinos violated Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder in that, directly or indirectly, in or in connection with the offer, purchase or sale of securities by use of the means or instrumentalities of transportation or communication in interstate commerce or by use of the mails, they employed devices, schemes or artifices to defraud; obtained money or property by means of untrue statements of material facts or omissions 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 would or did operate as a fraud or deceit upon the sellers and purchasers of securities, namely common stock of Global Casinos.
2. As part of and in furtherance of such conduct and activities, Global Casinos and Martindale made untrue statements of material facts and omitted to state material facts to the public, and to investors and to prospective investors in press releases and newsletters, concerning:
a. the financial condition of Global Casinos and its casino properties, including current net income and revenue;
b. the financial potential of Global Casinos and its casino properties, including projected net income and revenue;
c. Global Casinos' actual and/or proposed operation of certain casino properties;
d. Global Casinos' development of additional casino properties; and
e. Global Casinos' financial ability to develop additional casino properties.
In view of the foregoing, the Commission finds that it is appropriate to impose the sanctions specified in the Offers.
Accordingly, IT IS ORDERED that, pursuant to Section 8A of the Securities Act and Section 21C of the Exchange Act:
A. Global Casinos cease and desist from committing or causing any violations and future violations of Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder; and
B. Martindale cease and desist from committing or causing any violations and future violations of Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder.
By the Commission.
Jonathan G. Katz