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U.S. Securities and Exchange Commission

UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION

SECURITIES ACT OF 1933
Release No. 7714 / August 2, 1999

SECURITIES EXCHANGE ACT OF 1934
Release No. 41692 / August 2, 1999

ADMINISTRATIVE PROCEEDING
File No. 3-9956

In the Matter of

Jeffrey W. Berns
Respondent.

ORDER INSTITUTING PUBLIC
ADMINISTRATIVE AND CEASE-AND-
DESIST PROCEEDINGS PURSUANT TO
SECTION 8A OF THE SECURITIES ACT
OF 1933 AND SECTIONS 15(b) AND 21C
OF THE SECURITIES EXCHANGE ACT OF
1934, MAKING FINDINGS, AND
IMPOSING REMEDIAL SANCTIONS AND
A CEASE-AND-DESIST ORDER

I.

The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest that public administrative and cease-and-desist proceedings be, and hereby are, instituted pursuant to Section 8A of the Securities Act of 1933 ("Securities Act") and Sections 15(b) and 21C of the Securities Exchange Act of 1934 ("Exchange Act") to determine whether Jeffrey W. Berns ("Berns" or "Respondent") violated the federal securities laws and, if so, what remedial actions or sanctions are appropriate under the circumstances of this case.

In anticipation of the institution of these administrative proceedings, Berns has submitted an Offer of Settlement ("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 in which the Commission is a party, and without admitting or denying the findings herein, except that Berns admits the Commission's jurisdiction over him and over the subject matter of these proceedings and the findings in Sections II.A. and II.B. below, Berns has consented to the entry of the findings and the imposition of the remedial sanctions and cease-and-desist order as set forth below.

II.

On the basis of this Order and the Offer submitted by Berns, the Commission finds that:

A. First Entertainment Holding Corp., f/k/a First Entertainment, Inc. ("First Entertainment"), a Nevada corporation headquartered in Denver, Colorado, operates businesses related to the entertainment industry. It filed a registration statement on Form S-18 in 1985, is registered under Section 12(g) of the Exchange Act, and reports on Forms 10-KSB and 10-QSB. In February 1998, Nasdaq delisted First Entertainment securities from the Nasdaq Small Cap Market for failure to meet the minimum bid requirement.

B. Berns, age 30, a resident of New York, New York, is a registered representative and from February 1992 until February 1998, Berns was associated with D.H. Blair & Co., Inc. ("D.H. Blair") in New York.

C. Morton B. Lempel ("Lempel"), age 49, is a resident of Spring Valley, New York. In 1995, Lempel contracted with First Entertainment to promote the company and its securities to the brokerage community. Lempel is not registered with the Commission in any capacity and not associated with any registered broker-dealer.

D. In the first quarter of 1995, Berns during a meeting with Lempel agreed to convince his clients to buy First Entertainment stock if he received compensation from Lempel in return. Berns and Lempel attempted to conceal the stock payment by using brokerage accounts in the name of Berns' mother, Linda Berns. On May 12, 1995, Lempel transferred 20,500 shares of First Entertainment stock from his brokerage account to Linda Berns' account at Smith Barney, Inc., ("Smith Barney"). On May 22, Linda Berns transferred the stock from her Smith Barney account to her D.H. Blair account. The next day she sold all of the First Entertainment stock for total proceeds of $27,521. Linda Berns transferred the proceeds to her joint bank account with her husband, and on June 9 and June 10, she and her husband each wrote a check to Berns in the amount of $10,000. Berns deposited both checks in his bank account.

E. From April through June 1995, twenty-three of Berns' customers purchased a total of 147,100 shares of First Entertainment stock, constituting 80 percent of the customer buys at D.H. Blair. Berns recommended First Entertainment securities to his customers without disclosing the compensation he received from Lempel. From June through October 1995, most of Berns' customers who owned First Entertainment stock sold the stock at a loss.

F. Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 prohibit persons from directly or indirectly, 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, employing devices, schemes or artifices to defraud; obtaining money or property by means of untrue statements of material facts or omitting 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 engaging in transactions, practices, or courses of business which would or did operate as a fraud or deceit upon purchasers and sellers of First Entertainment securities. Berns willfully violated Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder by receiving compensation from Lempel in exchange for recommending the purchase of First Entertainment stock to his customers without disclosing to his customers the compensation he received from Lempel.

III.

In view of the foregoing, the Commission deems it appropriate and in the public interest to accept the Offer submitted by Berns and to impose the sanctions specified therein.

Accordingly, IT IS ORDERED that:

A. Berns be, and hereby is, barred from association with any broker or dealer;

B. Pursuant to Section 8A of the Securities Act and Section 21C of the Exchange Act, Berns cease and desist from committing or causing any violation and any future violation of Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder;

C. Berns shall, within 30 days of the entry of this Order, pay disgorgement and prejudgment interest in the total amount of $39,171 to the United States Treasury. Such payment shall be: (1) made by United States postal money order, certified check, bank cashier's check or bank money order; (2) made payable to the Securities and Exchange Commission; (3) hand-delivered or mailed to the Office of the Comptroller, U.S. Securities and Exchange Commission, Operations Center, 6432 General Green Way, Stop 0-3, Alexandria, VA 22312; and (4) submitted under cover letter which identifies Berns as the Respondent in these proceedings, the file number of these proceedings, a copy of which cover letter and money order or check shall be sent to Donald M. Hoerl, Associate Regional Administrator, Securities and Exchange Commission, Denver Regional Office, 1801 California Street, Suite 4800, Denver, Colorado 80202; and D. Berns shall, within 30 days of the entry of this Order, pay a civil money penalty in the amount of $27,500 to the United States Treasury. Such payment shall be: (1) made by United States postal money order, certified check, bank cashier's check or bank money order; (2) made payable to the Securities and Exchange Commission; (3) hand-delivered or mailed to the Office of the Comptroller, U.S. Securities and Exchange Commission, Operations Center, 6432 General Green Way, Stop 0-3, Alexandria, VA 22312; and (4) submitted under cover letter which identifies Berns as the Respondent in these proceedings, the file number of these proceedings, a copy of which cover letter and money order or check shall be sent to Donald M. Hoerl, Associate Regional Administrator, Securities and Exchange Commission, Denver Regional Office, 1801 California Street, Suite 4800, Denver, Colorado 80202.

By the Commission.

Jonathan G. Katz

Secretary

http://www.sec.gov/litigation/admin/34-41692.htm


Modified:08/02/1999