UNITED STATES OF AMERICA
SECURITIES AND EXCHANGE COMMISSION
SECURITIES EXCHANGE ACT OF 1934
Release No. 47579 / March 27, 2003
File No. 3-11075
In the Matter of
DANIEL C. SANDERS,
|ORDER INSTITUTING PUBLIC
PROCEEDINGS, MAKING FINDINGS AND
IMPOSING REMEDIAL SANCTIONS PURSUANT TO
SECTION 15(b)(6) OF THE
SECURITIES EXCHANGE ACT OF 1934|
The Securities and Exchange Commission ("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 Daniel C. Sanders ("Sanders" or "Respondent").
In anticipation of the institution of these proceedings, Sanders has, pursuant to Rule 240(a) of the Commission's 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 these proceedings and any other proceedings brought by or on behalf of the Commission, or to which the Commission is a party, Sanders:
- admits jurisdiction of the Commission over him 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, consents to the entry of this Order and the imposition of the remedial sanctions set forth below.
On the basis of this Order and Respondent's Offer, the Commission finds:
- That on August 2, 1999, the Commission filed its Complaint For Permanent Injunctive and Other Legal and Equitable Relief against Sanders, and others, in the United States District Court for the Northern District of California, Securities and Exchange Commission v. Edward A. Durante, et al., Civil Action No. C99-3690 SBA (MEJ) (N.D. Cal.)(the "Civil Action");
- That on November 7, 2001, a Final Judgment of Permanent Injunction And Other Equitable and Statutory Relief ("Final Judgment") was entered against Sanders by the United States District Court for the Northern District of California in the Civil Action. The Final Judgment, which was entered pursuant to Sanders' consent, permanently enjoins Sanders from violations of 5(a), 5(c) and 17(a) of the Securities Act, Sections 10(b) and 15(a) of the Exchange Act and Rule 10b-5 thereunder, Rule 101 of Regulation M, and from aiding and abetting violations of Section 15(g) of the Exchange Act and Rules 15g-2 through 15g-6 thereunder. The Final Judgment also required Sanders to disgorge $9,542.16 in ill-gotten gains and prejudgment interest thereon. The Final Judgment noted that a civil penalty was appropriate, but was not imposed based on Sanders' demonstrated inability to pay a penalty. Sanders consented to the entry of the Final Judgment without admitting or denying the allegations in the Commission's complaint; and
- That the Commission's Complaint alleged that at all relevant times, the common stock of PSA, Inc. was a penny stock, as defined in the Exchange Act and Rules thereunder. The complaint further alleged that Sanders, from approximately January 1998 through August 1998, knowingly or recklessly: (a) participated in a massive and illegal unregistered distribution of restricted shares of PSA stock; (b) purchased, or directed others to purchase, PSA stock on the open market to raise the stock price artificially; (c) participated in a scheme to solicit small investors to purchase PSA stock through First New Haven Corporation, an unregistered broker-dealer he controlled or partially controlled; (d) participated in a scheme to intentionally or recklessly lie to investors about material facts concerning PSA; (e) caused false and misleading statements to be issued to the market about PSA; and (f) violated the securities laws governing the offering and selling of penny stocks.
- From approximately January 1998 to August 1998, Sanders was acting as an unregistered broker-dealer.
In view of the foregoing, the Commission deems it appropriate and in the public interest to impose the sanctions specified in Sanders' Offer.
ACCORDINGLY, IT IS HEREBY ORDERED that Daniel C. Sanders be, and he hereby is, barred from association with any broker or dealer and barred from participating in any offering of a penny stock, including: (a) acting as a promoter, finder, consultant, agent, 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