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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. 51008 / January 10, 2005

Admin. Proc. File No. 3-11710


In the Matter of

MICHAEL A. LOMAS and MICHAEL L. YOUNG,

Respondent.



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ORDER MAKING FINDINGS AND IMPOSING REMEDIAL SANCTIONS AS TO RESPONDENT MICHAEL L. YOUNG PURSUANT TO SECTION 15(b) OF THE SECURITIES EXCHANGE ACT OF 1934

I.

The Securities and Exchange Commission ("Commission") instituted public administrative proceedings pursuant to Section 15(b) of the Securities Exchange Act of 1934 ("Exchange Act") against Michael A. Lomas ("Lomas") and Michael L. Young ("Young")( collectively the "Respondents") on October 15, 2004.

II.

In order to resolve these proceedings, Respondent Young 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 Sections III. 1 and 2 below, which are admitted, Respondent Young consents 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"), as set forth below.

III.

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

1. Young, age 58, resides in Bridgeton, Missouri. From at least November 2001 through September 21, 2004, Young served as an administrative trustee for Reserve Guaranty Trust ("Reserve Guaranty"). From at least January 2003 until September 2004, Young served as a director and the president of Mobile Billboards. During that time, he was also associated with broker-dealers.

2. On September 21, 2004, orders were entered against Lomas and Young permanently enjoining them from future violations of Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933, Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, in the civil action entitled Securities and Exchange Commission v. Mobile Billboards of America, Inc., International Payphone Company, Reserve Guaranty Trust, Michael A. Lomas and Michael L. Young, Civil Action Number 1:04-CV-2763, in the United States District Court for the Northern District of Georgia. The orders also enjoined Lomas and Young from aiding and abetting future violations of Section 15(a) of the Exchange Act. The Court also froze the assets of Lomas and Young, appointed a receiver for Mobile Billboards of America, Inc. ("Mobile Billboards") International Payphone Company ("International Payphone") and Reserve Guaranty, and ordered other ancillary relief. Lomas and Young consented to the orders.

3. The Commission's complaint alleged that, in connection with the unregistered sale of investment contracts, Mobile Billboards, Lomas and Young sold approximately $60.5 million of mobile billboard investments to approximately 700 investors. Outdoor Media Industries ("Outdoor Media"), a division of International Payphone, leased the billboards back from investors for seven years for monthly payments equivalent to 13.49% annually. Reserve Guaranty purportedly operated as a sinking fund and issued investors certificates that purportedly guaranteed funding for Mobile Billboards' commitment to buy back the billboards at the full purchase price at the end of the seven-year lease. The complaint alleged that the investment program operated as a Ponzi scheme because the collective business did not generate sufficient advertising revenue to make monthly lease payments to investors and, instead, relied on new investor money. The complaint further alleged that Mobile Billboards' sales materials made false claims about the number of billboards that were operational and misrepresented the value of assets contributed to Reserve Guaranty.

4. The complaint also alleged that the investment contracts were sold through a network of independent sales agents that were acting as broker-dealers, at least some of whom were not registered with the Commission as brokers or dealers. Lomas and Young directed the sales agents. Each of them participated in hiring, training, and directing the operations of the independent sales agents. The complaint further alleged that Lomas and Young prepared and provided sales materials to the agents and paid their commissions. Based on their conduct, Lomas and Young were associated with the sales agents who were operating as broker-dealers.

IV.

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

Accordingly, it is hereby ORDERED:

Pursuant to Section 15(b)(6) of the Exchange Act, that Respondent Young 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/34-51008.htm


Modified: 01/10/2005