UNITED STATES OF AMERICA
|In the Matter of |
ORDER INSTITUTING PUBLIC
The Securities and Exchange Commission deems it appropriate and in the public interest and for the protection of investors that administrative proceedings be instituted against Otis Herring ("Herring" or "Respondent") pursuant to Sections 15(b) and 19(h) of the Securities Exchange Act of 1934 ("Exchange Act").
In anticipation of the institution of these proceedings, Respondent has submitted an Offer of 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 in which the Commission is a party, and without admitting or denying any of the findings contained herein, except as to the jurisdiction of the Commission over him and over the subject matter of these proceedings, and the matters set forth in paragraph II. 1. below, and the entry of the injunction set forth in paragraph II. 3. below, which are admitted, Respondent consents to the entry by the Commission of this Order Instituting Public Administrative Proceedings Pursuant to Sections 15(b) and 19(h) of the Securities Exchange Act of 1934, Making Findings and Imposing Remedial Sanctions ("Order").
Accordingly, IT IS HEREBY ORDERED that proceedings against Respondent be and hereby are instituted.
On the basis of this Order and the Offer, the Commission finds that:
1. Herring has never been registered with any broker or dealer registered with the Commission.
2. On September 24, 1998, the Commission filed a complaint in the United States District Court for the Middle District of Florida, SEC v. Otis Herring, et al., Civil Action No. 98-1964-CIV-T-26F (M.D. Fla. 1998) (the "Complaint"), against, among others, Respondent. The Complaint charged Respondent and others with violations of certain provisions of the securities registration, antifraud and broker-dealer registration provisions of the federal securities laws, by, among other things, offering and selling $3.3 million of unregistered International Capital Corporation 2000 ("ICC 2000") investment contracts from at least 1994 through 1997 and making misrepresentations and omissions of material facts. The Commission's complaint alleged that Respondent and others had represented that a) ICC 2000 investment contracts were secure and risk-free because investor funds were deposited and maintained in bank accounts; and b) that ICC 2000 provided invested funds to "Major Brokerage Companies" as collateral for the purchase of Guaranteed Insurance Contracts. In fact, investor funds were not secure and risk free because investor funds were withdrawn from the bank accounts in which they had been deposited and used to pay off earlier investors, to pay sales commissions, and to pay for personal expenditures of other individuals involved in the sale of ICC 2000 investment contracts. No investments in GICs were ever made. None of the ICC 2000 investment contracts sold by Respondent were ever registered with the Commission.
3. On March 2, 1999, without admitting or denying any of the allegations contained in the Commission's complaint, except as to the Court's jurisdiction over him and the subject matter of the complaint, Respondent consented to the entry of a permanent injunction. On April 26, 1999, the Court permanently enjoined Respondent from future violations of Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 and Sections 10(b) and 15(a) of the Exchange Act and Rule 10b-5 thereunder.
Based on the foregoing, the Commission deems it appropriate and in the public interest and for the protection of investors to accept the Offer submitted by Respondent, and accordingly,
IT IS HEREBY ORDERED, that:
Respondent is hereby barred from association with any broker or dealer.
By the Commission.
Jonathan G. Katz
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