UNITED STATES OF AMERICA Before the SECURITIES AND EXCHANGE COMMISSION
SECURITIES EXCHANGE ACT OF 1934
The Commission deems it appropriate in the public interest and for the protection of investors that administrative proceedings be instituted pursuant to Sections 15(b) and 19(h) of the Securities Exchange Act of 1934 ("Exchange Act") with respect to David S. Coleman ("Coleman").
In anticipation of these proceedings, Coleman has submitted an Offer of Settlement ("Offer") which the Commission has determined to accept. Solely for the purpose of these proceedings and any other proceedings brought by or on behalf of the Commission or to which the Commission is a party, and without admitting or denying the findings contained herein, except that Coleman admits the jurisdiction of the Commission over him and the subject matter of this proceeding and the matters described in paragraphs III.A, D, E, F and G of this Order, Coleman has consented to the findings and sanctions set forth below.
Accordingly, IT IS ORDERED that proceedings pursuant to Section 15(b) and 19(h) of the Exchange Act be, and they hereby are, instituted.
On the basis of this Order for Proceedings and the Offer submitted by the Respondent, the Commission finds that:
A. From at least August 1996 through March 1997, Coleman, of Phoenix, Arizona, was a registered representative and trader at Wilson-Davis & Co., Inc. ("Wilson-Davis"), a registered broker-dealer.
B. In or about August 1996, the common stock of American Image Motor Co. Inc. ("American Image") became quoted on the National Association of Securities Dealers' OTC Bulletin Board. American Image's common stock has been quoted on the OTC Bulletin Board or the National Quotation Bureau Pink Sheets from August 1996 to the present.
C. During the time period relevant to this proceeding, the common stock of American Image was not registered or approved for registration upon notice of issuance on a national securities exchange, nor were such securities authorized, or approved for authorization upon notice of issuance for quotation on an automated quotation system sponsored by a registered securities association which was established and in operation before January 1, 1990, nor were such securities issued by a registered investment company. During a portion of the time period relevant to this proceeding the price of American Image common stock was less than five dollars a share. At no time relevant to this proceeding did American Image have net tangible assets in excess of $2,000,000 nor average revenue of $6,000,000 for a three year period.
D. On March 13, 1997, the Commission filed a complaint ("Complaint") to initiate a civil injunctive action, SEC v. Global Financial Traders, Inc. et al. (Docket No. 97 Civ. 1753 DC) in the United States District Court for the Southern District of New York against Coleman, among others, alleging that Coleman violated Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rules 10b-5 and 10b-6 promulgated thereunder, and Rule 101 of Regulation M promulgated under the Exchange Act.
E. The Complaint alleges Coleman participated in the distribution of American Image stock by purchasing and selling American Image stock knowing he could resell it to certain distribution participants without disclosing this arrangement.
F. The Complaint further alleges Coleman bid for and purchased shares of American Image stock and resold those shares to certain distribution participants at a time when such participants were engaged in a distribution of American Image stock.
G. On November 2, 2000, the United States District Court for the Southern District of New York issued an order of permanent injunction against Coleman enjoining him from further violations of Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder and Rule 101 of Regulation M and requiring him to disgorge $39,440 and $10,859.52 in prejudgment interest thereon. Payment of disgorgement and prejudgment interest was waived, based upon Coleman's demonstrated inability to pay.
In view of the foregoing, the Commission deems it appropriate in the public interest and for the protection of investors to impose the sanctions specified in the Offer submitted by Coleman. Accordingly, IT IS ORDERED pursuant to Sections 15(b) and 19(h) of the Exchange Act that:
The Respondent, David S. Coleman be, and hereby is:
A. Barred from participating in any offering of any penny stock; and
B. Barred from association with any broker or dealer.
The sanctions ordered herein shall become effective immediately.
By the Commission.
Jonathan G. Katz