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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. 50793 / December 3, 2004

Admin. Proc. File No. 3-11625


In the Matter of

VLADISLAV STEVEN ZUBKIS,



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ORDER MAKING FINDINGS AND IMPOSING REMEDIAL SANCTIONS BY DEFAULT

The Securities and Exchange Commission (Commission) issued its Order Instituting Proceedings (OIP) on September 1, 2004, pursuant to Section 15(b) of the Securities Exchange Act of 1934 (Exchange Act). Respondent Vladislav Steven Zubkis (Zubkis) was served with the OIP on September 13, 2004, and filed his Answer on September 29, 2004. The hearing is scheduled to commence on December 7, 2004.

In a submission dated October 29, 2004, Zubkis expressly stated that he will not attend the hearing. Based on this representation, the Division of Enforcement (Division) filed a motion for default against Zubkis on November 16, 2004. Zubkis filed his opposition to the Division's motion, received in this Office on November 23, 2004, in which he reiterated his refusal to attend the hearing. At a telephonic prehearing conference held December 2, 2004, Zubkis refused to state for the record whether he would, in fact, attend the hearing.

Rule 155(a) of the Commission's Rules of Practice, 17 C.F.R. 201.155(a), provides that a party may be deemed to be in default and have the proceeding determined against him if that party fails to appear at a hearing or otherwise defend the proceeding. Zubkis has stated unequivocally, on several occasions, that he will not attend the hearing. He has also failed to demonstrate through his prehearing efforts that he is actively preparing for the hearing. Accordingly, I find Zubkis to be in default. See 17 C.F.R. 201.155(a).

As authorized by Rule 155(a) of the Commission's Rules of Practice, 17 C.F.R. 201.155(a), I find the following allegations in the OIP to be true:

Zubkis, age forty-three, was a registered representative holding Series 7 and 63 licenses. Zubkis was associated, without being registered, with various broker-dealers from February 1990 through March 1993, including Cartwright & Walker Securities, Inc.

On June 29, 2001, the United States District Court for the Southern District of New York entered a Final Judgment of Permanent Injunctive and Other Relief Against Zubkis in an action entitled SEC v. Zubkis, Civil Action No. 97 Civ. 8086 (JGK/KNF). This Final Judgment: (a) permanently enjoined Zubkis from violating Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 (Securities Act), Sections 10(b), 15(b), and 15(c)(1) of the Exchange Act, and Rules 10b-5, 15c1-2, 15c1-5, and 15c1-6 thereunder; (b) ordered Zubkis to disgorge ill-gotten gains of $12,544,313.25 and prejudgment interest of $9,034,418.14, for a total of $21,578,731.39; and (c) permanently prohibited Zubkis from acting as an officer or director of any issuer that has a class of securities registered pursuant to Section 12 of the Exchange Act or that is required to file reports pursuant to Section 15(d) of the Exchange Act.

In the civil injunctive action described above, the Commission's complaint alleged, among other things: From June 1993 through at least May 1996, Zubkis orchestrated a fraudulent scheme to sell unregistered securities of Stella Bella Corporation, USA, now known as International Brands, Inc. (IBI), to investors. Zubkis caused IBI to issue more than 5,000,000 shares of common stock from October 1994 to May 1996. Zubkis then arranged for the sale of the IBI securities to investors through Z3 Capital Corporation (Z3), an unregistered broker-dealer, and through other registered broker-dealers, who sold at least 2,100,000 of these shares directly to investors. Zubkis also caused Z3 to issue, offer, and sell "Triple Crown Units" (TCU) to investors in a private placement. There were no registration statements filed with the Commission or in effect for the IBI common stock or the TCU securities that were sold to investors. Additionally, no exemptions or safe-harbors from registration were available for those sales of IBI and TCU securities. Finally, Zubkis and the Z3 salespeople made material misrepresentations to investors who purchased the IBI common stock and TCU securities. For example, Zubkis and the Z3 salespersons told investors that IBI was planning to merge with a company in the fast food industry, when no steps whatsoever were taken to implement such a merger. Zubkis and the Z3 salespersons also made baseless price predictions, such as predicting that IBI stock, which had never traded higher than $8.00 per share, would trade between $10.00 and $40.00 per share.

Zubkis participated in an offering of IBI stock, which is a penny stock.

In view of the foregoing, I find that it is in the public interest to bar Zubkis from association with any broker or dealer and from participating in an offering of penny stock.

ORDER

IT IS ORDERED THAT, pursuant to Section 15(b) of the Securities Exchange Act of 1934, Vladislav Steven Zubkis is hereby BARRED from association with any broker or dealer and from participating in an offering of penny stock.

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Lillian A. McEwen
Administrative Law Judge


http://www.sec.gov/litigation/admin/34-50793.htm


Modified: 12/13/2004