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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. 48974 / December 23, 2003

Admin. Proc. File No. 3-11364


In the Matter of

Rocky Mountain Energy Corporation

Respondent.


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ORDER INSTITUTING PROCEEDINGS, MAKING FINDINGS, AND REVOKING REGISTRATION OF COMMON STOCK PURSUANT TO SECTION 12(j) OF THE SECURITIES EXCHANGE ACT OF 1934

I.

The Securities and Exchange Commission ("Commission") deems it necessary and appropriate for the protection of investors that a public administrative proceedings be, and hereby are, instituted pursuant to Section 12(j) of the Securities Exchange Act of 1934 ("Exchange Act") against Rocky Mountain Energy Corporation ("Rocky Mountain" or "Respondent"), a corporation whose stock is registered with the Commission pursuant to Section 12(g) of the Exchange Act, to determine whether it is necessary and appropriate for the protection of investors to revoke the registration of Respondent's common stock for failure to comply with Sections 10(b) and 13(a) of the Exchange Act and the rules and regulations thereunder.

II.

In anticipation of the institution of these proceedings, Respondent 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 it and over the subject matter of these proceedings, which are admitted, Respondent consents to the entry of this Order Instituting Proceedings, Making Findings, and Revoking Registration of Common Stock Pursuant to Section 12(j) of the Securities Exchange Act of 1934 ("Order"), as set forth below.

III.

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

A. Rocky Mountain, headquartered in Houston, Texas, is a Nevada corporation whose securities are registered with the Commission pursuant to Section 12(g) of the Exchange Act. Accordingly, Rocky Mountain is required to file annual, quarterly, and current reports with the Commission pursuant to Section 13(a) of the Exchange Act.

B. On January 2, 2003, Rocky Mountain filed a current report on Form 8-K, reporting that the previously announced acquisition of BC&D Oil and Gas Corporation ("BC&D") had never been consummated. The Form 8-K falsely stated that the BC&D acquisition was "based on the transfer of 5,000,000 shares of Rocky Mountain corporate stock, which has been returned to the company." In fact, as of January 2, 2003, Rocky Mountain had issued approximately 10 million shares in the BC&D transaction, none of which was ever returned to Rocky Mountain. Instead, Rocky Mountain's former president and CEO, John N. Ehrman ("Ehrman"), and its former general counsel, W. Roderick Johnson ("Johnson"), sold these shares into the market or distributed them to third parties in undisclosed transactions.1

C. The Form 8-K also indicated that Rocky Mountain had closed a transaction to acquire U.S. Oil Corporation ("U.S. Oil") in exchange for a $200,000 short-term note and a $2.7 million two-year convertible note. The Form 8-K materially misrepresented the actual terms of the U.S Oil transaction, however. In reality, Rocky Mountain had issued more than 20 million shares of stock in the transaction. Ehrman and Johnson ultimately sold or distributed over 17 million of these shares in undisclosed transactions.

D. Rocky Mountain's Form 10-KSB filed on January 13, 2003, for the fiscal year ending September 30, 2002, misrepresented the consideration paid by Rocky Mountain to acquire H&N LLC ("H&N"), a privately held oil-and-gas company. The Form 10-KSB stated that the consideration paid by Rocky Mountain was one million shares of its stock when, in reality, over 10 million shares were issued in the acquisition. Ehrman and Johnson ultimately sold or distributed approximately six million of these shares in undisclosed transactions. The Form 10-KSB also repeated the false statements from the January 2 Form 8-K regarding the terms of the BC&D and U.S. Oil acquisitions and misrepresented the number of shares beneficially owned by Ehrman.

E. The fiscal year 2002 Form 10-KSB also misrepresented the number of Rocky Mountain's outstanding shares. The financial statements contained in the filing reflected that, as of September 30, 2002, Rocky Mountain had issued 57,893,061 shares and that only 24,747,373 of these shares were outstanding. In reality, all of the approximately 58 million issued shares were outstanding.

F. On February 14, 2003, Rocky Mountain filed a Form 10-QSB for the quarter ending December 31, 2002. The Form 10-QSB misrepresented the terms of the U.S. Oil and H&N acquisitions by failing to disclose the issuance of over 30 million shares in connection with those transactions.

G. Rocky Mountain filed three Form S-8 registration statements on October 24, 2002, February 5, 2003, and March 17, 2003, registering offerings of approximately 13.4 million shares of common stock. These Form S-8 registration statements were materially misleading because they incorporated Rocky Mountain's misleading Forms 10-KSB, 10-QSB, and 8-K described above.

IV.

The Commission finds that, as a result of the conduct above, Respondent failed to comply with Sections 10(b) and 13(a) of the Exchange Act and Rules 10b-5, 12b-20, 13a-1, 13a-11, and 13a-13 thereunder.

V.

Section 12(j) of the Exchange Act provides as follows:

The Commission is authorized, by order, as it deems necessary or appropriate for the protection of investors to deny, to suspend the effective date of, to suspend for a period not exceeding twelve months, or to revoke the registration of a security, if the Commission finds, on the record after notice and opportunity for hearing, that the issuer of such security has failed to comply with any provision of this title or the rules and regulations thereunder. No member of a national securities exchange, broker, or dealer shall make use of the mails or any means or instrumentality of interstate commerce to effect any transaction in, or to induce the purchase or sale of, any security the registration of which has been and is suspended or revoked pursuant to the preceding sentence.

VI.

In view of the foregoing, the Commission deems it necessary and appropriate for the protection of investors to impose the sanction specified in Respondent's Offer.

ACCORDINGLY, IT IS HEREBY ORDERED:

Pursuant to Section 12(j) of the Exchange Act, that the registration of the common stock of Rocky Mountain Energy Corporation be, and hereby is, revoked.

By the Commission.

Jonathan G. Katz
Secretary


Endnotes


http://www.sec.gov/litigation/admin/34-48974.htm


Modified: 12/23/2003