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U.S. Securities and Exchange Commission

United States of America
before the
Securities and Exchange Commission

Securities Exchange Act of 1934
Release No. 47269 / January 28, 2003

Administrative Proceeding
File No. 3-11021


In the Matter of

WAYNE F. GORSEK,

Respondent.


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ORDER INSTITUTING PUBLIC ADMINISTRATIVE PROCEEDINGS PURSUANT TO SECTION 15(b) OF THE SECURITIES EXCHANGE ACT OF 1934, MAKING FINDINGS AND IMPOSING REMEDIAL SANCTIONS

I.

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 Wayne F. Gorsek ("Respondent" or "Gorsek") pursuant to Section 15(b) of the Securities Exchange Act of 1934.

II.

In anticipation of the institution of these administrative proceedings, Gorsek 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, Gorsek, without admitting or denying the findings herein, except as to the Commission's jurisdiction over him and over the subject matter of these proceedings as to Paragraphs III.A. and III.B. below, which Respondent admits, Respondent consents to entry of this Order Instituting Public Administrative Proceedings pursuant to Section 15(b) of the Securities Exchange Act of 1934, Making Findings, and Imposing Remedial Sanctions ("Order").

III.

On the basis of this Order and the Respondent's Offer, the Commission makes the following findings:

A. Respondent, during all times relevant hereto, was a registered representative associated with Strategic Investments, Inc. ("Strategic Investments"), a broker-dealer registered with the Commission.

B. On August 19, 2002, by Gorsek's consent and upon findings by the Court, a Final Judgment of Permanent Injunction and other Equitable Relief (the "Final Judgment") was entered against Gorsek by the United States District Court for the Central District of Illinois, Springfield Division, in an action styled Securities and Exchange Commission v. Wayne F. Gorsek, Lyndell Parks, P. Brenden Gebben and Troy Justus, 99 CV 3072 (JES), which permanently restrains and enjoins Respondent from violating Sections 17(a) and 17(b) of the Securities Act of 1933 ("Securities Act"), Section 10 (b) of the Securities Exchange Act of 1934 ("Exchange Act"), and Exchange Act Rule 10b-5.

C. The Commission's Complaint alleged that Gorsek participated in a fraudulent touting scheme to artificially inflate the prices of approximately twenty microcap companies through Strategic Investment Advisory ("SIA"), an Illinois-based stock promoter, and a related broker-dealer, Strategic Investments. The Complaint alleged that pursuant to this scheme, Gorsek and others deceived investors into believing that SIA was an independent securities research firm that provided objective investment advice about "undiscovered" companies. In fact -- the Complaint alleged -- SIA was merely a paid stock promotion firm that publicly recommended securities in exchange for lucrative compensation agreements with the issuers of the subject securities. The Complaint further alleged that as a registered representative at Strategic Investments, Gorsek defrauded brokerage customers of Strategic Investments by recommending and selling highly-speculative microcap stocks of SIA's issuer-clients to them without disclosing that SIA received cash and securities from the issuers of those securities. The Complaint alleged that in furtherance of the scheme, Gorsek provided Strategic Investments' brokerage customers with SIA's mock research reports and other false and misleading information.

IV.

Based on the foregoing, the Commission deems it appropriate and in the public interest to accept Gorsek's Offer.

Accordingly, IT IS HEREBY ORDERED that Respondent Gorsek be, and hereby is, barred from association with any broker or dealer.

By the Commission.

Jonathan G. Katz
Secretary

 

http://www.sec.gov/litigation/admin/34-47269.htm


Modified: 01/29/2003