United States of America
In the Matter of
DAVID A. HESTERMAN
KENNETH L. WEEKS
c/o David W. Parsons, Esq.
42 Broadway, Suite 1101-26
New York, New York 10004
| ORDER ENTERING DEFAULT|
JUDGMENT AND SUMMARILY
AFFIRMING INITIAL DECISION
Pursuant to Rule 410 of the Commission's Rules of Practice,1 David A. Hesterman and Kenneth L. Weeks, jointly through their counsel, filed a petition for review of the initial decision of an administrative law judge.2 An order granting the petition was issued on March 25, 2002.3 That order cited Rule of Practice 180(c),4 which provides that a default may be entered for failure to make or cure a required filing.
On June 6, 2002, Hesterman and Weeks filed an untimely 28-page document purporting to be their brief in support.5 Pages 3 through 27 of that document were unintelligible.6 Although the Office of the Secretary contacted their counsel and notified him that the brief was deficient, neither Hesterman nor Weeks cured the deficiency. Accordingly, on July 2, 2002, the Commission issued an order directing Hesterman and Weeks to file a legible brief on or before July 8, 2002. After noting that the brief did not comply with the requirements of Rule of Practice 152,7 the July 2 Order informed Hesterman and Weeks that they may be deemed to be in default, pursuant to Rule of Practice 155,8 upon their failure to cure the deficient filing within the time specified.
On July 9, 2002, the Commission received a letter from counsel for Hesterman and Weeks. This letter acknowledged that counsel had been contacted by the Office of the Secretary in early June 2002 and alerted at that time that the brief in support was deficient. Counsel further represented in this correspondence that he would "reassemble" the brief and submit it, "in whatever condition [it] might be in" by July 10, 2002. As of this date, neither Hesterman nor Weeks has filed a legible brief; indeed, the only brief that has been filed is the illegible June 6, 2002 submission.
Accordingly, IT IS ORDERED that David A. Hesterman and Kenneth L. Weeks be deemed to be, and they hereby are, in default; and it is further
ORDERED that the initial decision of the administrative law judge be, and it hereby is, summarily affirmed with respect to Hesterman and Weeks insofar as it:
(1) orders Hesterman and Weeks to cease and desist from committing or causing any violation or future violation of Section 5(a), 5(c), and 17(a) of the Securities Act of 1933,9 Sections 10(b), 13(a), 13(b)(2)(A), 13(b)(2)(B)(ii), 13(b)(5), 13(d), 13(g), and 16(a) of the Securities Exchange Act of 1934,10 and Rules 10b-5, 12b-20, 12b-25, 13a-1, 13a-10, 13a-11, 13a-13, 13d-1, 13d-2, and 16a-3, thereunder;11
(2) orders Hesterman to disgorge $852,600, plus prejudgment interest calculated in accordance with Rule of Practice 600(b),12 due from December 1, 1996 through the last day of the month preceding the month in which payment of disgorgement is made;
(3) orders Weeks to disgorge $2,427,536, plus prejudgment interest calculated in accordance with Rule of Practice 600(b), due from December 1, 1996, through the last day of the month preceding the month in which payment of disgorgement is made;
(4) orders Weeks to disgorge $16,294, plus prejudgment interest calculated in accordance with Rule of Practice 600(b), due from December 1, 1996, through the last day of the month preceding the month in which payment of disgorgement is made; such disgorgement shall be in addition to the amounts that Weeks is ordered to disgorge separately or with any other respondent;
(5) orders Hesterman and Weeks, jointly and severally, to disgorge $273,513, plus prejudgment interest calculated in accordance with Rule of Practice 600(b), due from December 1, 1996, through the last day of the month preceding the month in which payment of disgorgement is made; such disgorgement shall be in addition to the amounts that Hesterman and Weeks are ordered to disgorge separately or with any other respondent;
(6) imposes a civil penalty of $250,000 on Hesterman and a civil penalty of $200,000 on Weeks; and
(7) bars Hesterman and Weeks from participating in any offer of penny stock; and it is further
ORDERED that payment of penalty and disgorgement shall be made within 30 days from the date of this Order by certified check, U.S. Postal money order, bank cashier's check, or bank money order payable to the Securities and Exchange Commission. The check and a cover letter identifying the respondents and the proceeding designation, Administrative Proceeding No. 3-9952, should be mailed or delivered by hand or courier to the Comptroller, Securities and Exchange Commission, Operations Center, 6432 General Green Way, Stop 0-3, Alexandria, Virginia 22312. A copy of the cover letter should be sent to Thomas D. Carter, Trial Counsel, Central Regional Office, Securities and Exchange Commission, 1801 California Street, Suite 4800, Denver, Colorado 80202-2648; and it is further
ORDERED, that the Division of Enforcement, in accordance with Rule of Practice 610,13 shall submit a separate proposed disgorgement plan within 60 days of payment of the funds by each respondent.
By the Commission.
|1||17 C.F.R. § 201.410.|
|2||Robert G. Weeks, et al., Initial Decision Rel. No. 199 (Feb. 4, 2002), 76 SEC Docket 2609.|
|3||One other respondent, Robert G. Weeks (the brother of Kenneth L. Weeks), separately filed a petition for review.|
|4||17 C.F.R. § 201.180(c).|
|5||The March 25 Order provided that briefs in support of the petitions for review were to be filed by May 6, 2002. At their counsel's request, Hesterman and Weeks were given a 30-day extension, until June 5, 2002, to file their brief in support.|
|6||The document appears to be computer code, but, in any event, is not understandable.|
|7||17 C.F.R. § 201.152.|
|8||17 C.F.R. § 201.155.|
|9||15 U.S.C. §§ 77e(a), 77e(c), 77q(a).|
|10||15 U.S.C. §§ 78j(b), 78m(a), 78m(b)(2)(A), 78m(b)(2)(B)(ii), 78m(b)(5), 78m(d), 78m(g), 78p(a).|
|11||17 C.F.R. §§ 240.10b-5, 240.12b-20, 240.12b-25, 240.13a-1, 240.13a-10, 240.13a-11, 240.13a-13, 240.13d-1, 240.13d-2, 240.16a-3.|
|12||17 C.F.R. § 201.600(b).|
|13||17 C.F.R. § 201.610.|
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