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U.S. Securities and Exchange Commission

UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION

SECURITIES EXCHANGE ACT OF 1934
Release No. 41587 / July 1, 1999

ADMINISTRATIVE PROCEEDING
File No. 3-9931

In the Matter of

JAMES T. STAPLES,
Respondent.

ORDER INSTITUTING
ADMINISTRATIVE PROCEEDINGS
PURSUANT TO SECTION 15(b)
OF THE SECURITIES
EXCHANGE ACT OF 1934, MAKING
FINDINGS AND IMPOSING
REMEDIAL SANCTIONS

I.

The Securities and Exchange Commission (“Commission”) deems it appropriate and in the public interest that public administrative proceedings be instituted pursuant to Section 15(b) of the Securities Exchange Act of 1934 (“Exchange Act”) against Respondent James T. Staples (“Staples” or “Respondent”).

II.

In anticipation of the institution of these proceedings, Staples has submitted an Offer of Settlement (“Offer”) for the purpose of resolving these proceedings, which Offer 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, Respondent, by his Offer, consents to the entry of this Order Instituting Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934, Making Findings and Imposing Remedial Sanctions (“Order”), admits the jurisdiction of the Commission and, without admitting or denying the findings set forth herein, except with respect to paragraphs III.A. and III.D., below, which are admitted, consents to the entry of the findings and remedial sanctions set forth below.

Accordingly, it is ordered that proceedings pursuant to Section 15(b) of the Exchange Act be, and hereby are, instituted.

III.

On the basis of this Order and Respondent’s Offer, the Commission finds that:

A. From at least 1992 to early 1998, Staples was Chief Executive Officer (“CEO”) and/or president of LSI Holdings, Inc. f/k/a Legend Sports, Inc. and, its subsidiary, Legend Sports, Inc. f/k/a Sirrine & Associates, Inc. (hereinafter collectively referred to as “Legend Sports”).

B. From at least 1992 to early 1998, Legend Sports’ principal place of business was Altamonte Springs, Florida and was engaged in the business of acquiring, developing an operating golf entertainment facilities in central Florida. Staples was a control person of Legend Sports.

C. Staples: (a) directed the day-to-day activities of Legend Sports, including the hiring and firing of directors, officers, employees and other agents, and authorized and set salaries and commissions; (b) determined the amount and terms of Legend Sports’ securities offerings, authorized the use of and participated in the drafting and review of promotional and disclosure materials relating to the offerings, and directed the distribution of these materials to investors and prospective investors; and (c) authorized the acquisition and disposition of company assets and was a signatory on Legend Sport’s bank accounts.

D. On March 2, 1999, a final judgment of permanent injunction was entered, by consent, against Staples, permanently enjoining Staples, directly, indirectly and/or as a control person, from violations of Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933, Section 10(b) of the Exchange Act, and Rule 10b-5 thereunder. SEC v. James T. Staples et. al., Case No. 98-1061-CV-22-C(M.D. Fla. Sept. 23, 1998).

E. The Commission’s complaint alleged, in part, that Staples, in connection with the offer and sale of preferred stock and promissory notes by Legend Sports, violated the registration and antifraud provisions of the federal securities laws. In particular, the complaint alleged that Staples, as CEO and/or president, and as a control person of Legend Sports, defrauded investors and prospective investors between at least 1994 and 1996 by operating a Ponzi scheme and by making misrepresentations to investors and prospective investors concerning, among other things, the financial condition of Legend Sports, the use of investor funds and the safety of the securities offered and sold by Legend Sports. The complaint further alleged that Staples omitted to disclose material facts including the commissions and overrides Legend Sports paid the agents selling the preferred stock and promissory notes on its behalf.

F. At all relevant times, the Legend Sports preferred stock offered and sold by Staples was a penny stock as defined in the Exchange Act and Rules promulated thereunder.

IV.

In view of the foregoing, the Commission deems it appropriate and in the public interest to impose the sanctions specified in Respondent’s Offer.

ACCORDINGLY, IT IS FURTHER ORDERED that:

Staples is hereby barred from participating in any offering of a penny stock.

By the Commission.

Jonathan G. Katz

Secretary

http://www.sec.gov/litigation/admin/34-41587.htm


Modified:07/01/1999