UNITED STATES OF AMERICA
|In the Matter of
William E. Willoughby,
|ORDER INSTITUTING CEASE-
PURSUANT TO SECTION 21C OF
THE SECURITIES EXCHANGE ACT
OF 1934 AND FINDINGS AND
ORDER OF THE COMMISSION
The Commission deems it appropriate and in the public interest that public administrative proceedings be, and they hereby are, instituted pursuant to Section 21C of the Securities Exchange Act of 1934 ("Exchange Act") to determine whether William E. Willoughby ("Willoughby") violated (or caused violations of) Sections 13(d), 13(g) and 16(a) of the Exchange Act and Rules 13d-1, 13d-2, 16a-2, 16a-3 and former Rule 16a-1 promulgated thereunder.
In anticipation of the institution of these administrative proceedings, Willoughby ("the Respondent") has submitted an Offer of Settlement 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 to which the Commission is a party, the Respondent, without admitting or denying the matters set forth herein, consents to the issuance of this Order Instituting Cease-and-Desist Proceedings Pursuant to Section 21C of the Securities Exchange Act of 1934 and Findings and Order of the Commission ("the Order"), and to the entry of the findings, and imposition of the remedial sanctions set forth below.
On the basis of this Order and the Respondent's Offer of Settlement ("Offer"), the Commission finds the following:
William E. Willoughby, age 78, founded Wedco Technology, Inc., served as its Chairman, President, and director, from 1960 until April 1996, and is a former beneficial owner of more than ten percent of the equity securities of Wedco. Willoughby has been a Director of ICO, Inc. since April 1996 and is a former beneficial owner of more than ten percent of the equity securities of ICO.
a. Wedco Technology, Inc.
Wedco Technology, Inc. provides plastics grinding services and related machinery to the petrochemical industry.
Wedcos common stock was registered with the Commission pursuant to Section 12 of the Exchange Act at relevant times prior to its acquisition by ICO on April 30, 1996, and was at relevant times listed on the American Stock Exchange and thereafter on the NASDAQ National Market System ("NASDAQ").
ICO, Inc., a Texas corporation with principal offices in Houston, provides oilfield and petrochemical processing services.
According to ICOs Annual Report on Form 10-K for the year ended September 30, 1998, ICO had total assets of over $328 million and shareholders equity of over $128 million as of September 30, 1998. ICO had 22,108,153 shares of common stock outstanding as of December 18, 1998. ICO reported net income of approximately $3.8 million, or $.18 per common share, for its 1998 fiscal year. ICOs common stock is registered with the Commission pursuant to Section 12 of the Exchange Act, and is listed on NASDAQ.
Section 13(d) of the Exchange Act and Rule 13d-1 thereunder, in relevant part, provide that any person who, after acquiring directly or indirectly the beneficial ownership of any equity security of a company registered pursuant to Section 12 of the Exchange Act, is directly or indirectly the beneficial owner of more than 5 percent of such security, shall, within 10 days after such acquisition, file a Schedule 13D with the Commission and the appropriate Exchange. 1 Rule 13d-2(a) requires that amendments to Schedule 13D be promptly filed if any material change to the facts set forth in the Schedule 13D occurs. A change of one percent or more in the reporting persons beneficial ownership of the specified securities is deemed material for the purposes of Rule 13d-2(a).
Section 13(g) of the Exchange Act and Rule 13d-1(c) thereunder, in relevant part, require any person who, as of December 31, 1978 or as of the end of any calendar year thereafter, beneficially owns more than 5 percent of any equity security of a company registered pursuant to Section 12 of the Exchange Act, and who is not otherwise required to file a Schedule 13D, to file a Schedule 13G with the Commission within 45 days of the end of the calendar year in which the obligation arises. Rule 13d-2(b) provides that yearly amendments shall be filed to Schedule 13G reporting changes in the information previously reported.
Section 16(a) of the Exchange Act 2 requires that beneficial owners of more than ten percent of any class of any equity security registered pursuant to Section 12 of the Exchange Act and the officers and directors of the issuer of any such security (hereinafter "insider") file a statement with the Commission by the effective date of a registration statement filed pursuant to Section 12 of the Exchange Act, or within ten days of becoming such officer, director or beneficial owner, reporting the amount of all equity securities of such issuer of which they are a beneficial owner. Section 16(a) also requires an insider to file with the Commission within ten days after the close of each calendar month, if there has been a change in the insider's ownership of the issuer's equity securities during such month, a statement indicating such changes. The rules enacted pursuant to Section 16(a) provide that an initial statement by an insider is to be made on a Form 3 and subsequent statements of changes in beneficial ownership are to be made on a Form 4 or a Form 5.
C. WILLOUGHBY'S VIOLATIONS OF SECTIONS 13(d), 13(g) and 16(a) OF THE EXCHANGE ACT AND THE RULES THEREUNDER
As shown in the attached Tables, in connection with changes in his ownership of Wedco securities, Willoughby has failed to file eleven amendments to a Schedule 13G, resulting in delinquencies ranging from over two years to over thirteen years. He was also over one month late filing one Schedule 13G amendment. In addition, Willoughby has failed to file six Forms 4 and one Form 5, resulting in delinquencies ranging from four years and nine months to over eleven years. He also was two weeks late filing a Form 3, and was from one month to over one year late filing eighteen Forms 4.
In connection with changes in his ownership of ICO securities, Willoughby has failed to file three Schedule 13D amendments, resulting in delinquencies ranging from two years and three months to two years and seven months. He also filed two Schedule 13D amendments that were from two months to over six months late. In addition, Willoughby has failed to file two Forms 4, resulting in delinquencies of over two years and three months and two years and nine months. Finally, for periods ranging from three weeks to five months, Willoughby was delinquent in filing nine Forms 4. The total value of the transactions in Wedco and ICO stock for which Willoughby filed late Forms 4 is approximately $3.69 million.
Willoughby's history of delinquency, compiled from the ownership reports he has filed with the Commission for Wedco and ICO, is set forth in the attached document. Please click here to view report [Webmaster Note: report, in Adobe Acrobat® format].
Based on the above, the Commission finds that Willoughby violated Sections 13(d), 13(g) and 16(a) of the Exchange Act, Rules 13d-1, 13d-2, 16a-2, 16a-3 and former Rule 16a-1 promulgated thereunder.
OFFER OF SETTLEMENT
Willoughby has submitted an Offer of Settlement in this proceeding which the Commission has determined to accept. Willoughby, in his Offer, consents to this Order making findings, as set forth above, and ordering him to cease and desist from committing or causing any violations of, and committing or causing any future violations of, Sections 13(d), 13(g) and 16(a) of the Exchange Act and Rules 13d-1, 13d-2, 16a-2 and 16a-3 promulgated thereunder.
Accordingly, IT IS HEREBY ORDERED, pursuant to Section 21C of the Exchange Act, that Willoughby cease and desist from committing or causing any violations of, and committing or causing any future violations of, Sections 13(d), 13(g) and 16(a) of the Exchange Act and Rules 13d-1, 13d-2, 16a-2 and 16a-3 promulgated thereunder.
By the Commission.
Jonathan G. Katz
|1||The Commission adopted amendments to Regulation 13D-G under the Exchange Act, permitting certain large shareholders to use short form Schedule 13G, rather than long form Schedule 13D, to report accumulations and changes in stock holdings. The shareholders that will be permitted to use Schedule 13G under these amendments are ones that own less than 20% and that do not have the purpose or effect of changing or influencing control of the issuer. See Release No. 34- 39538, January 12, 1998 (63 Fed. Reg. 2854, January 16, 1998.)|
|2||Until May 1, 1991, the statutory filing requirements under Section 16 of the Exchange Act were implemented by Rule 16a- 1. On January 10, 1991, the Commission adopted a comprehensive revision of the rules under Section 16 which became effective on May 1, 1991. See Rel. 34-28869, 56 Fed. Reg. 7242 (Feb. 21, 1991). Among other things, these amendments place the implementation of the former Rule 16a-1 filing requirements in new Rules 16a-2 and 16a-3. Accordingly, this Order, at Section VI below, orders that Respondent cease and desist from violating Rules 16a-2 and 16a-3.|
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