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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. 48747 / November 4, 2003

Administrative Proceedings
File No. 3-11287


In the Matter of

LARRY R. CROWDER and JOHN R. POWELL

Respondent.   


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ORDER MAKING FINDINGS AND IMPOSING REMEDIAL SANCTION BY DEFAULT AGAINST LARRY R. CROWDER

The Securities and Exchange Commission (Commission) initiated this proceeding on September 30, 2003, with an Order Instituting Proceedings (OIP), pursuant to Section 15(b) of the Securities Exchange Act of 1934 (Exchange Act). The OIP was served on Larry R. Crowder (Crowder) on October 7, 2003. Crowder's Answer was due on October 27, 2003, twenty days after the date of service. See 17 C.F.R. 201.220(b). On October 30, 2003, the Division of Enforcement (Division) filed a motion for default against Crowder for his failure to file an Answer.

As of November 4, 2003, Crowder has not filed an Answer. Since Crowder has not filed an Answer, he is in default. See 17 C.F.R. 201.155(a), .220(f). Pursuant to Rule 155(a) of the Commission's Rules of Practice, 17 C.F.R. 201.155(a), an administrative law judge may determine the proceeding against a respondent upon consideration of the record, including the OIP, the allegations of which may be deemed to be true.

I find the following allegations to be true only as to Crowder:

Crowder, age 45, resides in Coto de Caza, California. Crowder is an officer and director of Environmental Energy Inc. (EEI) and Environmental Operating, Inc. Crowder also owns half of EEI. During the relevant period, Crowder was associated with a broker-dealer, but is not currently associated with any broker-dealer.

The Commission filed a Complaint on July 28, 1998, in the United States District Court for the Central District of California, SEC v. Envtl. Energy, Inc., Case No. 98-6060 CM (BQRx). The Complaint alleged the following: From at least October 1993 through 1997, Crowder operated a captive broker-dealer that raised at least $15.7 million from more than 600 investors nationwide by selling securities in four limited partnerships. Crowder controlled the general partners of each of the limited partnerships. Crowder made material misrepresentations regarding the purchase of oil and gas rights by the four limited partnerships by failing to disclose material information about the profits the general partners made. The limited partnerships' offering materials represented that at least eighty percent of investor proceeds would be used to purchase and operate oil and gas rights. However, only about fifteen percent of investor proceeds were spent to purchase and operate oil and gas interests for the limited partnerships, and the remainder of the proceeds were spent for the personal expenses of Crowder and others.

On October 4, 2002, without admitting or denying the allegations in the Complaint, Crowder consented to entry of a permanent injunction against him on all claims in the Commission's Complaint, enjoining him from future violations of Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 (Securities Act), Section 10(b) of the Exchange Act, and Rule 10b-5 thereunder. The injunction was entered on October 16, 2002. Based on this consent injunction, Crowder is precluded from disputing the factual allegations in the Complaint in this administrative proceeding. See Melton and Asset Mgmt. & Research, Inc., 80 SEC Docket 2812, 2824-25 (July 25, 2003).

In light of the foregoing, I find that it is in the public interest to bar Crowder from associating with any broker or dealer.

IT IS ORDERED, pursuant to Section 15(b) of the Securities Exchange Act of 1934, that Larry R. Crowder is hereby BARRED from association with any broker or dealer.

_______________________
Robert G. Mahony
Administrative Law Judge


http://www.sec.gov/litigation/admin/34-48747.htm


Modified: 11/04/2003