David S. Pearl, Esq.

SECURITIES EXCHANGE ACT OF 1934
Release No. 48257 / July 30, 2003

ACCOUNTING AND AUDITING ENFORCEMENT
Release No. 1827 / July 30, 2003

ADMINISTRATIVE PROCEEDING
File No. 3-11196

I.

The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest to institute administrative proceedings against Respondent David S. Pearl, Esq. ("Pearl"), pursuant to Rules 102(e)(1)(iii) and 102(e)(3)(i)(A) of the Commission's Rules of Practice [17 C.F.R. §§ 201.102(e)(1)(iii) and 201.102(e)(3)(i)(A)].¹

II.

In anticipation of the institution of these proceedings, Pearl 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, and without admitting or denying the findings herein, except as to the Commission's jurisdiction over him and the subject matter of this proceeding, and the findings contained in Section III.D below relating to his being permanently enjoined from future violations of the Federal securities laws, which are admitted, Pearl consents to the issuance of this Order.

III.

The Commission finds that:

A. Pearl, age 48, served as acting treasurer of Carnegie International Corporation ("Carnegie") from September 1996 through May 1997, as corporate secretary of Carnegie from May 1997 through January 1999, and as a paid consultant to Carnegie from January 1999 through December 1999. Pearl has been a licensed attorney in the State of Maryland since 1980.

B. Carnegie is a Colorado corporation headquartered in Laurel, Maryland. During the relevant period, Carnegie owned and operated several subsidiaries, including a credit card services company and a telephone-sex company. Carnegie's common stock was registered with the Commission pursuant to Section 12(g) of the Securities Exchange Act of 1934 ("Exchange Act") [15 U.S.C. § 78l(g)], from December 28, 1998, through July 14, 2003.² From September 1996 through April 1999, Carnegie's stock was quoted on the OTC Bulletin Board. The stock was listed on the American Stock Exchange ("AMEX") on April 29, 1999. AMEX halted trading of the stock on April 30, 1999, and delisted the stock in January 2000. Carnegie's stock most recently traded in the over-the-counter market and was quoted in the "Pink Sheets" published by Pink Sheets LLC.

C. To create the appearance of rapid financial growth in Carnegie's 1998 fiscal year, the year Carnegie registered its common stock with the Commission, Pearl, along with other Carnegie management, caused Carnegie to report revenues and income on certain transactions that, under generally accepted accounting principles ("GAAP"), were not revenue or income producing transactions. Among other things, Pearl knowingly helped prepare phony and backdated agreements and other documents used to improperly report these transactions, which were provided to Carnegie's auditors. As a result of these improperly reported transactions, the revenues and income reported in Carnegie's original and amended registration statement, filed with the Commission on October 28, 1998, and February 13, 1999, respectively, and in its original and amended 1998 Form 10-KSB, filed with the Commission on April 27, 1999, and January 25, 2000, respectively, were materially overstated, and the terms of these transactions were materially misrepresented. Pearl knew, or was reckless in not knowing, that the phony and backdated agreements and other documents he helped prepare were used to materially misrepresent the terms of these transactions in Carnegie's filings with the Commission, and to mislead Carnegie's auditors. Pearl, along with other Carnegie management, personally benefited from this fraud through the undisclosed sale of Carnegie securities.

D. On July 14, 2003, the Commission filed a complaint in the United States District Court for the District of Columbia, captioned SEC v. Carnegie International Corporation, et al., C.A. No. 03-1513, alleging, among other things, that Pearl engaged in the conduct described above. On July 29, 2003, Pearl was permanently enjoined from violating Section 17(a) of the Securities Act of 1933 ("Securities Act"), and Exchange Act Sections 10(b), 13(b)(5), and 16(a) and Rules 10b-5, 13b2-1, 13b2-2, 16a-2, and 16a-3, and from aiding and abetting violations of Exchange Act Sections 12(g), 13(a), 13(b)(2)(A), and 13(b)(2)(B) and Rules 12b-20 and 13a-1. Pearl consented to entry of the final judgment in the civil action without admitting or denying the allegations of the Commission's complaint, except as to jurisdiction.

IV.

FINDINGS

On the basis of this Order and the Respondent's Offer, the Commission finds that:

A. Pearl willfully violated Securities Act Section 17(a) and Exchange Act Sections 10(b), 13(b)(5), and 16(a) and Rules 10b-5, 13b2-1, 13b2-2, 16a-2, and 16a-3 thereunder, and willfully aided and abetted violations of Exchange Act Sections 12(g), 13(a), 13(b)(2)(A), and 13(b)(2)(B) and Rules 12b-20 and 13a-1 thereunder; and

B. On July 29, 2003, in an action brought by the Commission, the United States District Court for the District of Columbia entered a final judgment permanently enjoining Pearl from violating Securities Act Section 17(a) and Exchange Act Sections 10(b), 13(b)(5), and 16(a) and Rules 10b-5, 13b2-1, 13b2-2, 16a-2, and 16a-3, and from aiding and abetting violations of Exchange Act Sections 12(g), 13(a), 13(b)(2)(A), and 13(b)(2)(B) and Rules 12b-20 and13a-1.

V.

ORDER

Accordingly, IT IS HEREBY ORDERED, effective immediately, that:

Pearl is denied the privilege of appearing or practicing before the Commission as an attorney.

By the Commission.