UNITED STATES OF AMERICA
In the Matter of
RONALD N. PELLETT and
|ORDER INSTITUTING PUBLIC PROCEEDINGS, MAKING FINDINGS AND IMPOSING REMEDIAL SANCTIONS PURSUANT TO SECTION 15(b)(6) OF THE SECURITIES EXCHANGE ACT OF 1934|
The Commission deems it appropriate and in the public interest that proceedings pursuant to Section 15(b)(6) of the Securities Exchange Act of 1934 ("Exchange Act") be, and they hereby are, instituted against Ronald N. Pellett ("Pellett") and Penny A. Sperry, formerly Penny Pellett ("Sperry") (jointly "Respondents").
In anticipation of the institution of these proceedings, Respondents have, pursuant to Rule 240(a) of the Securities and Exchange Commission's ("Commission") Rules of Practice [17 C.F.R. § 201.240(a)], submitted an Offer of Settlement ("Offer"), which the Commission has determined to accept.
Solely for the purposes of this proceeding and any other proceeding brought on or on behalf of the Commission or in which the Commission is a party, Respondents Pellett and Sperry admit jurisdiction of the Commission over them and over the matters set forth in this Order; and without admitting or denying the findings in this Order, except as to the entry of the injunction in Paragraph III.B. below, which is admitted, consent to the entry of this Order and the imposition of the remedial sanctions set forth below.
The Commission finds:
A. That on February 27, 2002, the Commission filed its Complaint For Permanent Injunctive and Other Legal and Equitable Relief against Pellett and Sperry, and others ("Complaint"), in the United States District Court for the District of Montana, Securities and Exchange Commission v. Victor Industries, Inc., et al., Civil Action No. CV02-37-M-DWM (the "Civil Action");
B. That on March 6, 2002, a Judgment of Permanent Injunction and Other Relief ("Judgment") was entered against Pellett and Sperry by the United States District Court for the District of Montana in the Civil Action. The Judgment, which was entered pursuant to Respondents' consent, permanently enjoins Pellett and Sperry from violations of 5(a) and 5(c) of the Securities Act of 1933. Pellett and Sperry consented to the entry of the Judgment without admitting or denying the allegations in the Commission's Complaint;
C. That the Commission's Complaint alleged that Respondents Pellett and Sperry participated in an unregistered distribution of stock in Victor Industries, Inc. ("Victor") in which they: (a) orchestrated a sham private placement of Victor securities designed to give Pellett and Sperry control over the outstanding common stock of Victor through various nominee accounts they controlled; (b) through their control of Victor caused Victor to issue a series of press releases for the purpose of inflating Victor's stock price so Respondents could sell their stock holdings on the public; (c) sold over a million shares of Victor common stock to the public in violation of the registration provisions of the federal securities laws; and (d) transferred millions of additional shares of Victor stock offshore or to various third parties who, in turn, sold the stock to the public; and
D. That, in connection with the allegations set forth in the Complaint, Respondents Pellett and Sperry participated in the offering of a penny stock, as defined in the Exchange Act and Rules thereunder.
Based on the foregoing, the Commission deems it appropriate and in the public interest to accept Respondents' Offer of Settlement.
Accordingly, IT IS HEREBY ORDERED that Ronald N. Pellett and Penny A. Sperry be, and hereby are, barred from participating in any offering of a penny stock, including: (a) acting as a promoter, finder, consultant, or other person who engages in activities with a broker, dealer or issuer for purposes of the issuance or trading in any penny stock; or (b) inducing or attempting to induce the purchase or sale of any penny stock.
By the Commission.
Jonathan G. Katz
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