UNITED STATES OF AMERICA
In the Matter of
|ORDER INSTITUTING PUBLIC
PROCEEDINGS AND OPINION
AND ORDER UNDER RULE 102(e)
OF THE COMMISSION'S RULES
The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest that public administrative proceedings be, and they hereby are, instituted against Steven Wolis ("Wolis") pursuant to paragraph three (3)(i)(A) of Rule 102(e) of the Commission's Rules of Practice [17 C.F.R. § 201.102(e)(3)(i)(A)] ("Rule 102(e)").1
In anticipation of the institution of these administrative proceedings, Wolis has submitted an offer of settlement ("Settlement Offer") which the Commission has determined to accept. Solely for the purpose of these proceedings and any other proceeding brought by or on behalf of the Commission or to which the Commission is a party, and without admitting or denying the Commission's findings contained herein, except for the jurisdiction of the Commission over him and over the matters set forth in this order and that a Final Judgment of Permanent Injunction and Other Relief ("Final Judgment") has been entered against him as set forth in Paragraph III below, which are admitted, Wolis consents to the entry of this Order Instituting Public Proceedings and Opinion and Order Pursuant to Rule 102(e) ("Order").
On the basis of this Order and the Settlement Offer, the Commission finds that:
A. Wolis is an attorney and has been licensed to practice law in the State of Florida since May 23, 1987. From approximately 1989 through approximately 1996, Wolis served as a director of Keith Group of Companies, Inc. ("Keith Group"), a public company. In addition, Wolis served as Keith Group's general counsel.
B. Keith Group, formed in 1987, was incorporated in Delaware. Keith Group was at all relevant times a reporting company registered with the Commission pursuant to Section 15(d) of the Securities Exchange Act of 1934 ("Exchange Act"), 15 U.S.C. § 78o(d). Keith Group's common stock was traded on NASDAQ.
C. Hugh Keith ("Keith"), was at all relevant times the president and control person of Keith Group.
D. On July 24, 1995, the Commission filed a complaint in the United States District Court for the Southern District of Florida, against, among others, Wolis. SEC v. Keith Group of Companies, Inc., Case No. 95-6702-CIV-GONZALEZ (S.D. Fla. 1995). The Complaint charges the defendants with violations of the antifraud, corporate reporting, and books and records provisions of the federal securities laws. The Commission's Complaint alleges, among other things, that from approximately February 1991 through approximately August 1993, Keith perpetrated a scheme to inflate the reported assets of Keith Group. The Complaint further alleges that Keith Group's filings falsely reported that Keith Group sold six parcels of real estate at a total profit of $4,837,899. False and misleading financial statements reflecting these fraudulent real estate "sales" were contained in the financial statements included in Forms 10-K and 10-Q that Keith Group filed with the Commission in 1991 and 1992. According to the Complaint, during the same time period, Keith, while in possession of material, non-public information concerning, among other things, Keith Group's true financial condition, traded in Keith Group stock in breach of his fiduciary duty to Keith Group's shareholders. Keith and entities under his control obtained proceeds of approximately $1,019,229. The Complaint charged Wolis with knowingly or recklessly preparing documents relating to the real estate "sales" and with signing the Form 10-K for the period ending August 31, 1991 reflecting these "sales."
E. Wolis consented to the entry of the Final Judgment without admitting or denying the allegations in the Complaint, except subject matter jurisdiction, which Wolis admitted. On June 26, 2000, the United States District Court for the Southern District of Florida entered a Final Judgment of Permanent Injunction. Pursuant thereto, Wolis was permanently enjoined from future violations of Sections 10(b), 13(b)(5) and 13(b)(2) of the Exchange Act, and Rules 10b-5, 13b2-1 and 13b2-2, promulgated thereunder.
F. On July 16, 1998, Wolis pled guilty to a single count of violating 18 U.S.C. § 1505 in that he knowingly and willfully corruptly endeavored to influence, obstruct, and impede the due administration of justice by making materially false and misleading statements while testifying as a witness in a proceeding then pending before an agency of the United States, to wit, a formal investigation by the SEC styled, In the Matter of the Keith Group of Companies, Inc., File No. A-1358.
ORDER IMPOSING SANCTIONS
Based upon the foregoing, the Commission deems it appropriate and in the public interest to accept the Settlement Offer and accordingly, IT IS HEREBY ORDERED, effective immediately, that Wolis is denied the privilege of appearing or practicing before the Commission.
By the Commission.
Jonathan G. Katz
1 Rule 102(e)(3)(i)(A) of the Commission's Rules of Practice, 17 C.F.R. § 201.102(e)(3)(i)(A), provides in pertinent part:
The Commission, with due regard to the public interest ... may ... temporarily suspend from appearing or practicing before it any attorney ... who ... has been by name ... [p]ermanently enjoined by any court of competent jurisdiction, by reason of his misconduct in an action brought by the Commission, from violating or aiding and abetting the violation of any provision of the Federal securities laws or of the rules and regulations thereunder ....
Rule 102(e)(3)(iv), 17 C.F.R. § 201.102(e)(3)(iv) further provides that:
A person who has consented to the entry of a permanent injunction . . . without admitting the facts set forth in the complaint shall be presumed for all purposes under this paragraph (e)(3) to have been enjoined by reason of the misconduct alleged in the complaint.
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