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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. 50592 / October 26, 2004

ADMINISTRATIVE PROCEEDING
File No. 3-11720


In the Matter of

BENNY G. MORRIS,

Respondent.


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ORDER INSTITUTING ADMINISTRATIVE PROCEEDINGS PURSUANT TO SECTION 15(b) OF THE SECURITIES EXCHANGE ACT OF 1934, MAKING FINDINGS, AND IMPOSING REMEDIAL SANCTIONS

I.

The Securities and Exchange Commission (“Commission”) deems it appropriate and in the public interest that public administrative proceedings be, and hereby are, instituted pursuant to Section 15(b) of the Securities Exchange Act of 1934 (“Exchange Act”) against Benny G. Morris (“Respondent”).

II.

In anticipation of the institution of these proceedings, Respondent has submitted an Offer of Settlement (the “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 these proceedings, and the findings contained in Section III.2 below, which are admitted, Respondent consents to the entry of this Order Instituting Administrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934, Making Findings, and Imposing Remedial Sanctions (“Order”), as set forth below.

III.

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

1. Morris, at various times between in or about at least July 2001 and November 2003, served as the master sales agent for Branson City Limits, Inc. (“Branson City”) and Resort Hotels, Inc. (“Resort Hotels”). Branson City and Resort Hotels were privately held corporations that offered and sold securities in the form of investment contracts, which were nominally structured as hotel timeshare interests. Morris, among other things, recruited and trained sales agents to offer and sell Branson City and Resort Hotels securities, and received transaction-based compensation in the form of commissions on the sales of Branson City and Resort Hotels securities made by both entities’ sales agents. As such, from at least July 2001 until November 2003, Morris was regularly engaged in the business of effecting transactions in securities for the account of others. At no time from July 2001 until November 2003 was Morris registered with the Commission in any capacity. Morris, 47 years old, is a resident of Palm Harbor, Florida.

2. On September 29, 2004, a final judgment was entered by consent against Morris, permanently enjoining him from future violations of Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 (“Securities Act”), Sections 10(b) and 15(a) of the Exchange Act and Rule 10b-5 thereunder, in the civil action entitled Securities and Exchange Commission v. Patrick Ballinger, et al., Civil Action Number 1:03-CV-1659, in the United States District Court for the Southern District of Indiana (“SEC v. Ballinger”).

3. The Commission’s complaint filed in SEC v. Ballinger alleged that the defendants, including Morris, participated in a fraudulent and unregistered offering of securities in the form of investment contracts which were nominally structured as hotel timeshare interests. As part of the scheme, the defendants raised at least $28 million from more than 600 investors in 30 states. The Commission’s complaint also alleged that the defendants provided investors with false and misleading information concerning: (i) the use of investors’ principal; (ii) the source of investor returns; and (iii) the investors’ ability to have the full amount of their principal returned to the investors. The Commission’s complaint also alleged that Morris acted as an unregistered broker or dealer by, among other things: (i) serving as the master sales agent for Branson City and Resort Hotels; (ii) recruiting and training sales agents to offer and sell Branson City and Resort Hotels securities; and (iii) receiving transaction-based compensation in the form of commissions on the sales of Branson City and Resort Hotels securities made by both entities’ sales agents.

IV.

In view of the foregoing, the Commission deems it appropriate and in the public interest to impose the sanctions agreed to in Respondent Morris’ Offer.

Accordingly, it is hereby ORDERED:

Pursuant to Section 15(b)(6) of the Exchange Act, that Respondent Morris be, and hereby is barred from association with any broker or dealer;

Any reapplication for association by the Respondent 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 the Respondent, 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/34-50592.htm


Modified: 11/01/2004