SECURITIES AND EXCHANGE COMMISSION
SECURITIES EXCHANGE ACT OF 1934
Release No. 48182 / July 16, 2003
ACCOUNTING AND AUDITING ENFORCEMENT
Release No. 1814 / July 16, 2003
File No. 3-11182
PROCEEDINGS INSTITUTED AGAINST XAIBE, INC. AND LOWELL NICHOLAS
The Commission instituted public administrative proceedings against Xaibe, Inc. ("Xaibe"), a defunct public corporation, and its sole officer and director, Lowell Nicholas ("Nicholas"), for alleged violations of the reporting requirements and antifraud provisions of the Securities Exchange Act of 1934 ("Exchange Act"). In the Order Instituting Proceedings ("Order"), the Division of Enforcement ("Division") alleges, among other things, that Nicholas caused Xaibe to file a late Form 10-KSB for the period ended June 30, 2001 that was materially false and misleading because it purported to include audited financial statements when, in fact, the financial statements were not audited. The Division further alleges that Xaibe has failed to file mandatory Exchange Act reports for any period after December 2001, causing it to be delinquent in filing one annual report and four quarterly reports, and failed to file a Form 8-K disclosing the resignation of its auditor in May 2002. In the proceedings against Xaibe, instituted pursuant to Section 12(j) of the Exchange Act, the Division alleges that Xaibe failed to comply with Section 13(a) of the Exchange Act and Rules 12b-20, 13a-1, 13a-11, and 13a-13 thereunder. In the proceedings against Nicholas, instituted pursuant to Section 21C of the Exchange Act, the Division alleges that Nicholas violated Section 10(b) of the Exchange Act and Rule 10b-5 and was a cause of Xaibe's failure to comply with Section 13(a) of the Exchange Act and Rules 12b-20, 13a-1, 13a-11, and 13a-13 thereunder.
A hearing will be scheduled before an administrative law judge to determine whether the allegations contained in the Order are true, to provide Nicholas and Xaibe an opportunity to dispute these allegations, and to determine what sanctions, if any, are appropriate and in the public interest.