R. Gordon Jones and Mark F. Jensen

SECURITIES EXCHANGE ACT OF 1934
Release No. 42828/ May 25, 2000

ACCOUNTING AND AUDITING ENFORCEMENT
Release No. 1261/ May 25, 2000

ADMINISTRATIVE PROCEEDING
File No. 3-10210/ May 25, 2000

Proceedings Instituted Against R. Gordon Jones and Mark F. Jensen

The Commission has instituted public administrative proceedings pursuant to Rule 102(e) of the Commission's Rules of Practice against R. Gordon Jones and Mark F. Jensen, two CPAs in Salt Lake City, Utah. Jones and Jensen are charged with having engaged in improper professional conduct by recklessly violating professional accounting and auditing standards in their audit of the 1995 financial statements of a now-defunct Utah corporation, Dynamic American Corporation. Jones, the engagement partner, was primarily responsible for the audit field work. Jensen performed the concurring partner review on the audit.

The Commission previously instituted public administrative proceedings against Dynamic and six individuals based on a 1996 "pump and dump" scheme by which about $4 million in Dynamic stock was sold to the public. See, In the Matter of Jethro J. Barlow, CPA, et al., Exchange Act Rel. No. 41689 (August 2, 1999; In the Matter of Dynamic American Corporation, Exchange Act Rel. No. 41688 (August 2, 1999).

In the order, the Division of Enforcement alleges that Dynamic's financial statements, included in the company's amended annual report on Form 10-K/A filed in November 1996, were not prepared in conformity with GAAP. Specifically, the staff contends that Dynamic's balance sheet improperly listed as an asset certain Bolivian mining properties that were materially overvalued at $36,600,000, or 91% of Dynamic's total consolidated assets. Furthermore, in performing their audit of Dynamic's 1995 financial statements, Jones and Jensen also did not act in accordance with GAAS in that they: failed to adequately plan the audit; failed to obtain sufficient competent evidential matter; failed to maintain an attitude of professional skepticism; failed to exercise due professional care in the performance of the audit; failed to issue a proper audit report with respect to the work performed by other auditors; and by using a lower-of-cost-or-market analysis, did not test the balance sheet presentation of certain "ore concentrates" valued at approximately $4.3 million.

A hearing will be held before an administrative law judge to determine whether the staff's allegations are true, and if so, whether Jones or Jensen should be censured or temporarily or permanently disqualified from or denied the privilege of appearing or practicing before the Commission.