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U.S. Securities and Exchange Commission

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

SECURITIES ACT OF 1933
Release No. 7711 / August 2, 1999

SECURITIES EXCHANGE ACT OF 1934
Release No. 41689 / August 2, 1999

ACCOUNTING AND AUDITING ENFORCEMENT
Release No. 1149 / August 2, 1999

ADMINISTRATIVE PROCEEDING
File No. 3-9952

ADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS INSTITUTED AGAINST JETHRO J. BARLOW AND OTHERS ALLEGING FRAUD IN MICROCAP SECURITIES

IN THE MATTER OF JETHRO J. BARLOW, CPA, ALAN K. BURTON, J. EDWARDS COX, ROBERT G. WEEKS, DAVID A. HESTERMAN AND KENNETH L. WEEKS

Today, the Commission instituted public administrative and cease-and-desist proceedings in which the Division of Enforcement alleges that figurehead and de facto officers and directors of Dynamic American Corp. ("Dynamic American"), a now-defunct Utah microcap company, defrauded investors during 1995 and 1996 by failing to disclose the identities of the company's true control persons, grossly overvaluing the company's mineral assets, and accumulating nearly $4 million through a massive, unregistered distribution of its stock.

Named as Respondents are Robert G. Weeks ("R. Weeks") and David A. Hesterman ("Hesterman"), both of Salt Lake City, Utah, and Kenneth L. Weeks ("K. Weeks") of Draper, Utah. All three are currently defendants in another Commission action relating to another mining company. [SEC v. PanWorld Minerals International, Inc. et al., No. 2:97CV 0425(B) (D. Utah), June 2, 1997]. That action has been stayed pending completion of criminal proceedings against R. Weeks and Hesterman who were indicted last year by a federal grand jury in connection with their activities at PanWorld. [U.S. v. Robert G. Weeks et al., No. 2:98CR 0278S (D. Utah), May 27, 1998].

Also named in the present action are Jethro J. Barlow, CPA ("Barlow") of Hilldale, Utah, Alan K. Burton ("Burton") of Novato, California, and J. Edwards Cox ("Cox") of Salt Lake City, Utah, all former officers of Dynamic American.

The Order Instituting Proceedings alleges that in June 1995, the Weeks and Hesterman gained control of Dynamic American, then an inactive public company, from its president, Barlow, who remained as a director, and installed Burton and Cox as figurehead officers and directors of the company. The Order further alleges that between June 1995 and November 1996, all six individuals failed to disclose the Weeks and Hesterman's control of the company and falsely stated that its:

  • Bolivian mineral properties had a value of $40 million;

  • U.S. mineral assets had a value of $4.3 million; and

  • mining operations in Bolivia and the U.S. were profitable.

The Order also alleges that Barlow, who compiled financial statements that were included in the company's filings with the Commission, engaged in improper professional conduct as a CPA. According to the Order, Barlow failed to assure that the financial statements, which failed to properly value the company's Bolivian and U.S. mineral assets, were prepared in accordance with generally accepted accounting principles.

The Order further alleges that one or more of the Respondents violated, or caused Dynamic American to violate, the periodic filing, books and records, internal accounting controls and securities ownership reporting provisions of the federal securities laws.

The Division of Enforcement seeks entry of cease-and-desist orders against all six Respondents, and an accounting, disgorgement and civil penalties, and penny stock bars against the Weeks and Hesterman. Finally, the Division seeks to have Barlow suspended from practice before the Commission.

A hearing will be held to determine whether the staff's allegations are true, and if so, what, if any, remedial sanctions are appropriate and in the public interest and whether respondents should be ordered to pay disgorgement and civil penalties.

http://www.sec.gov/litigation/admin/34-41689.htm


Modified:08/02/1999