==========================================START OF PAGE 1====== UNITED STATES OF AMERICA Before the SECURITIES AND EXCHANGE COMMISSION SECURITIES EXCHANGE ACT OF 1934 Release No. 37705 / September 20, 1996 ADMINISTRATIVE PROCEEDING File No. 3-9087 ______________________________ : In the Matter of : ORDER INSTITUTING PUBLIC : ADMINISTRATIVE PROCEEDINGS AND : CEASE-AND-DESIST PROCEEDING : PURSUANT TO SECTIONS Richard S. Berger, : 17A(c)(4)(C) AND 21C OF THE : SECURITIES EXCHANGE ACT OF : 1934, MAKING FINDINGS, : IMPOSING REMEDIAL SANCTIONS : AND ORDERING RESPONDENT TO : CEASE AND DESIST : Respondent : ______________________________: I. The Securities and Exchange Commission (Commission) deems it appropriate and in the public interest that public administrative and cease and desist proceedings be instituted pursuant to Sections 17A(c)(4)(C) and 21C of the Securities Exchange Act of 1934 (Exchange Act) against Richard S. Berger (Berger). In anticipation of the institution of these administrative and cease and desist proceedings, Berger has submitted an Offer of Settlement (Offer) 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 Commission's findings, except as to jurisdiction, which is admitted, Berger, by his Offer, consents to the entry of this Order Instituting Public Administrative Proceedings Pursuant to Sections 17A(c)(4)(C) and 21C of the Exchange Act, Making Findings, Imposing Remedial Sanctions and Ordering Respondent to Cease and Desist (Order). II. ==========================================START OF PAGE 2====== Accordingly, IT IS ORDERED that proceedings pursuant to Sections 17A(c)(4)(C) and 21C of the Exchange Act be, and hereby are, instituted. III. On the basis of this Order and the Offer submitted by Berger, the Commission finds that: -[1]- a. Berger is a resident of Chicago, Illinois. From at least February 1991 through September 1994 (relevant period), Berger was the President of First Stock Transfer Company, Inc. (First Stock), an Illinois corporation located in Chicago. First Stock was registered with the Commission as a transfer agent from June 14, 1984 to March 11, 1995. First Stock served as a transfer agent for several thinly traded pink sheet stocks during the relevant period. b. During the relevant period, Berger caused and willfully aided and abetted First Stock's violations of Section 17A(c)(2) of the Exchange Act and Rule 17Ac2-1(c) thereunder by failing to amend First Stock's Form TA-1 filed with the Commission within sixty days of the form becoming inaccurate. Specifically, First Stock's 1991 Form TA-1 failed to reflect that First Stock was serving as a transfer agent for an affiliated company. Moreover, First Stock's 1993 and 1994 forms TA-1 failed to reflect its change of address. c. During the relevant period, Berger caused and willfully aided and abetted First Stock's violations of Section 17A(c)(2) of the Exchange Act and Rule 17Ac2-2 thereunder by failing to file First Stock's annual report on Form TA-2 in a timely manner. d. During the relevant period, Berger caused and willfully aided and abetted First Stock's violations of Section 17(a)(3) of the Exchange Act and Rule 17Ad-4(b)(3)(i) thereunder by failing to prepare and maintain a document certifying that First Stock qualified for an exemption. The certification is used to ensure qualification for an exemption from the reporting requirements of Rules 17Ad-2(a), (b), (c), (d) and (h), Rule 17Ad-3 and Rules 17Ad-6(a)(2) through (7) and (11). e. During the relevant period, Berger caused and willfully aided and abetted First Stock's violations of Section 17(a)(3) of the Exchange Act and Rule 17Ad-4(c) thereunder by regularly failing to calculate the number of items which First Stock ---------FOOTNOTES---------- -[1]- The findings herein are made pursuant to Richard S. Berger's Offer of Settlement and are not binding on any other person or entity named as a respondent in this or any other proceeding. ==========================================START OF PAGE 3====== received during a preceding six month period within 5 business days following the close of each month. f. During the relevant period, Berger caused and willfully aided and abetted First Stock's violations of Section 17(a)(3) of the Exchange Act and Rule 17Ad-6(a)(8) thereunder by failing to make and keep current appointment and termination letters concerning First Stock's status as a transfer agent for certain issuers. g. During the relevant period, Berger caused and willfully aided and abetted First Stock's violations of Section 17(a)(3) of the Exchange Act and Rule 17Ad-6(a)(10) by failing to keep current First Stock's transfer and registrar journals. h. During the relevant period, Berger caused and willfully aided and abetted First Stock's violations of Section 17(a)(3) of the Exchange Act and Rule 17Ad-10(a)(1) and (a)(2) thereunder by failing to accurately post to First Stock's master security holder files, within thirty calendar days, debits and credits containing appropriate certificate detail regarding every security transferred, purchased, redeemed or issued. i. During the relevant period, Berger caused and willfully aided and abetted First Stock's violations of Section 17(f)(1) of the Exchange Act and Rule 17f-1 thereunder by failing to register First Stock with the Commission or its designee, the Securities Information Center (SIC), for the purpose of reporting the existence of missing, lost or stolen securities to either entity and by failing to file a Form X-17F-1A for lost certificates as required by the rule. j. During the relevant period, Berger caused and willfully aided and abetted First Stock's violations of Section 17(f)(2) of the Exchange Act and Rule 17f-2 thereunder by failing to submit employee fingerprint cards for First Stock to the U.S. Attorney General or its designee, the National Association of Securities Dealers. IV. In view of the foregoing, it is in the public interest to impose the sanctions specified in the Offer. Accordingly, IT IS HEREBY ORDERED THAT: a. Berger be censured; b. That Berger cease and desist from committing or causing any violation or any future violation of Sections 17(a)(3), 17(f)(1), 17(f)(2) and 17A(c)(2) of the Exchange Act and Rules 17Ac2-1(c), 17Ac2-2, 17Ad-4(b)(3)(i), 17Ad-4(c), 17Ad-6(a)(8), ==========================================START OF PAGE 4====== 17Ad-6(a)(10), 17Ad-10(a), 17f-1 and 17f-2 promulgated thereunder; and c. That, within ten days of the entry of the Order, Berger pay a civil penalty of $5000 to the United States Treasury, pursuant to Section 21B of the Exchange Act as amended. Such payment shall be: (a) made by United States postal money order, certified check, bank cashier's check or bank money order; (b) made payable to the U.S. Securities and Exchange Commission; (c) mailed to the Comptroller, Securities and Exchange Commission, 450 5th Street, N.W., Washington D.C. 20549; and (d) submitted under cover letter which identifies Richard S. Berger as the respondent in these proceedings, as well as the Commission's case number. A copy of that cover letter and money order or check shall be sent to Mary E. Keefe, Regional Director, Midwest Regional Office, Securities and Exchange Commission, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. By the Commission. Jonathan G. Katz Secretary