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U.S. Securities and Exchange Commission

SECURITIES AND EXCHANGE COMMISSION

SECURITIES ACT OF 1933
RELEASE NO. 7744 / September 27, 1999

SECURITIES EXCHANGE ACT OF 1934
RELEASE NO. 41919 / September 27, 1999

ADMINISTRATIVE PROCEEDING File No. 3-10033

ORDER INSTITUTING PUBLIC ADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS PURSUANT TO SECTION 8A OF THE SECURITIES ACT OF 1933 AND SECTIONS 15(b)(6), 19(h) AND 21C OF THE SECURITIES EXCHANGE ACT OF 1934 FOR ALLEGED VIOLATIONS OF THE COMMISSION'S ANTIFRAUD PROVISIONS BY REGISTERED REPRESENTATIVES FOR FAILING TO DISCLOSE COMPENSATION TO CLIENTS

The Securities and Exchange Commission today announced that it instituted public administrative and cease-and-desist proceedings pursuant to Section 8A of the Securities Act of 1933 ("Securities Act") and Sections 15(b)(6), 19(h) and 21C of the Securities Exchange Act of 1934 ("Exchange Act"), against Respondents Steven J. Erlsten, Jr., William H. Clark, Derek L. DuBois and Aaron Finkelstein (the "Order") for willfully violating, and committing or causing violations of, Sections 17(a) of the Securities Act, Section 10(b) of the Exchange Act and Rule 10b-5 thereunder.

The Division of Enforcement ("Division") alleges in the Order that Respondents, each of whom was a registered representative during the relevant time, recommended and/or sold shares of common stock of The Tracker Corporation of America ("Tracker") to their customers and failed to disclose the material information that they had been or would be paid by Corporate Relations Group, Inc. ("CRG"), a public relations firm located in Winter Park, Florida, which was promoting Tracker at the time, for inducing their clients to buy this stock.

The Division alleges that, in February 1994, Tracker retained CRG to provide corporate relations and promotional services through a variety of publications and by direct promotion to the broker-dealer community. CRG began promoting Tracker in the summer of 1994.

The Division further alleges that, in November 1994, CRG obtained more than 500,000 shares of Tracker common stock and deposited the stock in at least 10 of its securities accounts. CRG then paid brokers to induce their clients to buy Tracker stock on the open market or from CRG's accounts. CRG paid Erlsten, Clark, Finkelstein and DuBois a total of more than $46,000 for causing their customers to buy Tracker common stock. None of these brokers disclosed their arrangement with CRG to their clients or prospects.

The Division alleges that CRG paid Erlsten $5,000 for inducing three of his clients to buy a total of 25,000 shares of Tracker stock in November 1994. From December 1994 through February 1995, CRG paid Clark, who had induced at least one client to buy Tracker stock, a total of $35,300. In early December 1994, DuBois caused six of his clients to buy a total of 5,000 shares of Tracker, and CRG paid him $2,562. Finally, in January and February 1995, CRG paid Finkelstein a total of $3,743.75 for having placed clients in Tracker stock.

The Order institutes public administrative and cease-and-desist proceedings to determine: what, if any, remedial action is necessary and appropriate in the public interest for the protection of investors; whether Respondents should be ordered to pay disgorgement, including prejudgment interest, and whether a civil money penalty should be imposed; and whether Respondents should be ordered to cease and desist from committing or causing a violation and any future violations of Section 17(a) of the Securities Act, Section 10(b) of the Exchange Act and Rule 10b-5 thereunder.

A hearing will be held before an Administrative Law Judge to determine whether the staff's allegations are true, to provide the Respondents with an opportunity to respond to the charges and to determine what, if any , relief is appropriate in the public interest.

http://www.sec.gov/litigation/admin/34-41919.htm


Modified:09/27/1999