U.S. Securities & Exchange Commission
SEC Seal
Home Previous Page
U.S. Securities and Exchange Commission

UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION

SECURITIES EXCHANGE ACT OF 1934 Release No. 49433 / March 17, 2004

ADMINISTRATIVE PROCEEDING File No. 3-11319


In the Matter of

PAUL A. BARRIOS III AND
DENNIS P. O'CONNELL, JR.

Respondent.


:
:
:
:
:
:
:
:
:
:
ORDER MAKING FINDINGS AND IMPOSING
REMEDIAL SANCTIONS AS TO RESPONDENTS
PAUL A. BARRIOS III AND DENNIS P.
O'CONNELL, JR., PURSUANT TO SECTION
15(b) OF THE SECURITIES EXCHANGE
ACT OF 1934

I.

The Securities and Exchange Commission ("Commission"), having issued on October 29, 2003, an Order Instituting Administrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934 ("Exchange Act") against Respondents Paul A. Barrios III ("Barrios") and Dennis P. O'Connell, Jr., ("O'Connell") now deems it appropriate and in the public interest that an Order Making Findings and Imposing Remedial Sanctions be issued against Respondents Barrios and O'Connell.

II.

In this administrative proceeding, Respondents Barrios and O'Connell have each submitted Offers of Settlement, which the Commission has determined to accept. Solely for the purpose of this proceeding and any other proceeding 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 that Respondents admit the jurisdiction of the Commission over them and over the subject matter of this proceeding and the entry of a final judgment of Permanent Injunction against them as set forth in paragraphs III.D-III.F below. In addition, Respondent Barrios admits the entry of a cease-and-desist order against Barrios as set forth in paragraph III.B below. Respondents consent to the entry of this Order Making Findings, and Imposing Remedial Sanctions Pursuant to Section 15(b) of the Securities Exchange Act of 1934 ("Order").

III.

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

  1. Barrios, age 42, resides in Rancho Santa Margarita, California. Barrios was employed as a Shoreline Development Company ("Shoreline") sales representative from December 2001 to February 2002 and acted as an unregistered broker-dealer. During the relevant period, Barrios was not associated with a broker-dealer and is not currently associated with any broker-dealer. From June 24 to November 11, 1999 and from October 19 to December 6, 2001, Barrios was a registered representative associated with Mark Stewart Securities, Inc., which is a broker-dealer registered with the Commission (File No. 8-49347). From September 18 to December 15, 1995 and from December 7, 1998 to July 1, 1999, Barrios was associated with Securities America, Inc., which is a broker-dealer registered with the Commission (File No. 8-26602).

  2. The Commission previously issued a cease-and-desist order against Barrios in an administrative proceeding entitled In The Matter Of Paul A. Barrios, File No. 3-10157, 71 SEC Docket 2560, (March 15, 2000) for violating Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933 ("Securities Act") and Sections 10(b) and 15(a) of the Exchange Act and Rule 10b-5 thereunder (Release Nos. 7810 and 42531). In that matter, Barrios, a registered representative with a registered broker-dealer, offered and sold preferred stock in four unregistered offerings. He misrepresented material facts in his solicitations of investors. Barrios was suspended from association with any broker or dealer for twelve months.

  3. O'Connell, age 31, currently resides in Long Beach, California. O'Connell was employed as a Shoreline sales representative from at least March 2001 to August 2002 and acted as an unregistered broker-dealer. During the relevant period, O'Connell was not associated with a broker-dealer and is not currently associated with any broker-dealer. The Pennsylvania Securities Commission issued a cease-and-desist order against O'Connell on December 14, 2000 for engaging in unregistered securities activity in Pennsylvania in an oil and gas offering.

  4. On August 27, 2002, the Commission filed a Complaint in the United States District Court for the Central District of California. The case was entitled Securities and Exchange Commission v. Shoreline Development Company, et al., Case No. CV 02-6695 RSWL(Ex).

  5. On October 8, 2003, the District Court granted the Commission's motion for summary judgment and entered final judgments of permanent injunction against Barrios and O'Connell. The final judgment enjoins Barrios and O'Connell from violating the securities registration provisions of Sections 5(a) and 5(c) of the Securities Act, and from committing violations of the broker-dealer registration provisions of Section 15(a) of the Exchange Act. The judgment further enjoined Barrios from violating the prior Cease-and-Desist Order issued by this Commission on March 15, 2000, entitled In the Matter of Paul A. Barrios, Admin. Proc. File No. 3-10157, as set forth in Paragraph III.B above.

  6. The final judgment entered against Barrios imposed a first tier civil penalty in the amount of $50,000 as to Barrios, and also ordered him to disgorge the sum of $13,328.31. The final judgment entered against O'Connell imposed a first tier civil penalty in the amount of $50,000 as to O'Connell, and also ordered him and a shell corporation he controlled, Northstar Acquisitions and Holdings, Inc., to disgorge the sum of $233,409.05.

  7. The Complaint alleged that Shoreline sold fractional undivided interests in oil and gas rights. From 2000 until August 27, 2002, Shoreline, through sales agents, including Barrios and O'Connell raised at least $3.8 million in approximately six offerings from 120 investors in 32 states. Barrios and O'Connell solicited investors to purchase Shoreline's securities through cold-call telemarketing and by sending them offering materials by overnight mail. Shoreline also used the Internet to promote its business and its purported success drilling wells.

IV.

In view of the foregoing, the Commission deems it appropriate and in the public interest to impose the sanctions specified in the Respondent's Offer.

ACCORDINGLY, IT IS HEREBY ORDERED:

Pursuant to Section 15(b)(6) of the Exchange Act, that Respondents Barrios and O'Connell be, and hereby are, barred from association with any broker or dealer.

Any reapplication for association by Respondents will be subject to the applicable laws and regulations governing the reentry process, and reentry may be conditioned upon a number of factors, including, but not limited to, the satisfaction of any or all of the following: (a) any disgorgement ordered against Respondents, whether or not the Commission has fully or partially waived payment of such disgorgement; (b) any arbitration award related to the conduct that served as the basis for the Commission order; (c) any self-regulatory organization arbitration award to a customer, whether or not related to the conduct that served as the basis for the Commission order; and (d) any restitution order by a self-regulatory organization, whether or not related to the conduct that served as the basis for the Commission order.

For the Commission, by its Secretary, pursuant to delegated authority.

Jonathan G. Katz
Secretary

 

http://www.sec.gov/litigation/admin/34-49433.htm


Modified: 03/17/2004