SECURITIES ACT OF 1933
Release No. 7768 / November 4, 1999
SECURITIES EXCHANGE ACT OF 1934
Release No. 42107 / November 4, 1999
ADMINISTRATIVE PROCEEDING File No. 3-10092
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 Selling Unregistered Securities and Acting as a Broker Without Registration
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 Respondent Jerry C. Berman for willfully violating, and committing or causing violations of, Section 5 of the Securities Act and Section 15(a)(1) of the Exchange Act.
The Division of Enforcement ("Division") alleges in the Order that Respondent was a consultant to Stratcomm Media Ltd. ("Stratcomm") and its wholly-owned subsidiary, Corporate Relations Group, Inc. ("CRG"), a public relations firm located in Winter Park, Florida.
The Division alleges that Stratcomm and CRG engaged in a substantial unregistered distribution of Stratcomm common stock from the fall of 1994 through the end of 1995, selling more than 1,000,000 shares and collecting proceeds of approximately $1,000,000. Stratcomm did not file a registration statement concerning these common stock sales, nor was there a registration statement in effect. Moreover, no exemption from registration was available to Stratcomm.
The Division alleges that Stratcomm and CRG paid commissions to its sales personnel and other individuals based upon the sales of Stratcomm common stock they generated. Respondent Berman sold more than 310,000 shares of Stratcomm common stock in violation of the registration provision of the federal securities laws, and Stratcomm and CRG paid him commissions of $50,304.40.
The Division alleges that, during the period October 1994 through March 1995, Respondent Berman was not registered as a broker.
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 Respondent Berman should be ordered to pay disgorgement, including prejudgment interest, and whether a civil money penalty should be imposed; and whether Respondent Berman should be ordered to cease and desist from committing or causing a violation and any future violations of Section 5 of the Securities Act and Section 15(a)(1) of the Exchange Act.
A hearing will be held to determine whether the staff's allegations are true and to provide Respondent Berman with an opportunity to respond to the charges.