UNITED STATES OF AMERICA
|In the Matter of
WILLIAM J. NORDVIK,
ORDER MAKING FINDINGS AND IMPOSING REMEDIAL SANCTIONS AGAINST WILLIAM J. NORDVIK
On February 22, 2000, the Securities and Exchange Commission ("Commission") instituted cease-and-desist and public administrative proceedings pursuant to Sections 15(b) and 21C of the Securities Exchange Act of 1934 ("Exchange Act") against respondent William J. Nordvik ("Nordvik" or "Respondent") to determine whether he willfully violated Section 17(a) of the Securities Act of 1933 ("Securities Act") and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder and, if so, what remedial sanctions, if any, were appropriate.
In response to the institution of these proceedings, Nordvik 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 in which the Commission is a party, and without admitting or denying the findings herein, except as to the jurisdiction of the Commission over him and the subject matter of the proceeding, which are admitted, Nordvik consents to the entry of the findings and remedial sanctions set forth below.
On the basis of this Order and the Offer, the Commission makes the following findings:
A. Nature of Proceeding
This matter involves Nordvik's knowing distribution of materially false and misleading documents regarding Orlando Super Card, Inc. ("Orlando"), a small company he was promoting and whose stock he beneficially owned. Orlando shares first appeared on the market after Nordvik, who controlled all of Orlando's freely trading stock, worked with a local market maker to get the Orlando stock quoted on the OTC Bulletin Board. Orlando was a small company selling phone cards and discount vacation packages. It never had more than $20,000 in assets. In order to get the stock quoted by the initial market maker, Nordvik supplied the market maker with incomplete and misleading documents, such as: a S.E.C. Form D that did not make the required disclosure of Nordvik's role as the company's promoter and beneficial owner of stock; false records of shareholder meetings; and a misleading business plan. After the market maker obtained authorization to begin entering quotes for Orlando, Nordvik lent over 80 percent of Orlando's freely trading stock to Jon F. Williams ("Williams") and Jack G. Wright, Jr. ("Wright"), who purported to be investment bankers. Williams and Wright used the Orlando stock in a scheme similar to check kiting. Through a series of matched trades, they bought and sold the stock between accounts they controlled at Canadian brokerage firms. These matched trades created the appearance of active trading in Orlando stock. It also slowly pushed up the price of Orlando stock because the U.S. market makers serving as intermediaries for these trades sold the stock at higher prices than the price at which they had bought it. By early August 1997, Orlando, with less than $20,000 in assets, had a market capitalization of $9.7 million. The price of Orlando stock plummeted in mid-August 1997 when the trading activities of Williams and Wright ceased. Orlando was, at all relevant times, a penny stock. Nordvik sold a total of $25,277.45 worth of Orlando stock.
Nordvik is a stock promoter. He acquired the shell company which would become Orlando, caused it to issue 1,175,000 shares in the names of his nominees, and then worked with a Minneapolis, Minnesota market maker to get the stock quoted on the OTC Bulletin Board. Nordvik bought and sold Orlando stock throughout the summer of 1997.
C. Other Relevant Persons and Entities
D. Nordvik Willfully Disseminated False And Misleading Information Regarding Orlando
Nordvik committed or caused the violations of Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder by giving Orlando's initial market maker numerous false and misleading documents. The initial market maker was required by statute to make these documents available to investors and other market makers on request. Nordvik gave the market maker a Form D reporting on Orlando's purported initial offering of stock under S.E.C. Rule 504, but the form did not make the required disclosures regarding Nordvik's role in the company as the promoter and beneficial owner of stock. Nordvik also supplied the market maker with a variety of materials creating the impression that there were actual shareholders involved in the company, such as documents that falsely stated that the shareholders had approved amendments to the company's articles. Also included in the materials Nordvik gave the market maker was a business plan projecting $43,000,000 in revenues and $34,000,000 in profits in FY 1998, even though the unaudited balance sheets for the month ending January 1997 reflected a very small operation with only $18,662 in assets. Nordvik's false and misleading documentation was relied upon by the initial market maker and at least one other broker-dealer who reviewed the information prior to making a market in Orlando stock. Nordvik knew, or was reckless in not knowing, that his misrepresentations and omissions would artificially affect the market for Orlando stock.
In view of the foregoing, the Commission finds that Nordvik willfully caused or committed violations of Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder and further deems it appropriate and in the public interest to impose the sanctions specified by Nordvik in the Offer.
Accordingly, IT IS ORDERED THAT Nordvik shall:
(1) cease and desist from committing or causing any violation and any future violation of Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder;
(2) be, and hereby is, barred from participating in any offering of a penny stock, including: i) acting as a promoter, finder, consultant, or other person who engages in actions with a broker, dealer or issuer for purposes of the issuance or trading in any penny stock; or ii) inducing or attempting to induce the purchase or sale of any penny stock;
(3) pay, within thirty (30) days of the entry of this Order, disgorgement in the amount of $25,277.45 plus prejudgment interest in the amount of $4,254.59, for a total of $29,532.04. Such payment shall be: (a) made by United States postal money order, certified check, bank cashier's check or bank money order; (b) made payable to the United States Treasury; (c) mailed by certified mail to the Comptroller, Securities Exchange Commission, Operations Center, 6432 General Green Way, Alexandria, VA 22312-0003; and (d) submitted with a cover letter which identifies Nordvik as a Respondent in these proceedings, with a copy of said cover letter and money order or check sent to the Securities and Exchange Commission, 44 Montgomery Street, Suite 1100, San Francisco, CA 94104, Attn.: District Administrator; and
(4) pay, within thirty (30) days of the entry of this Order, a civil money penalty in the amount of $20,000. Such payment shall be: (a) made by United States postal money order, certified check, bank cashier's check or bank money order; (b) made payable to the United States Treasury; (c) mailed by certified mail to the Comptroller, Securities and Exchange Commission, Operations Center, 6432 General Green Way, Alexandria, VA 22312-0003; and (d) submitted with a cover letter which identifies Nordvik as a Respondent in these proceedings, with a copy of said cover letter and money order or check sent to the Securities and Exchange Commission, 44 Montgomery Street, Suite 1100, San Francisco, CA 94104, Attn.: District Administrator.
By the Commission.
Jonathan G. Katz
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