UNITED STATES OF AMERICA Before the SECURITIES AND EXCHANGE COMMISSION Securities Exchange Act of 1934 Release No. 37683 / September 16, 1996 Administrative Proceedings File No. 3-9081 _______________________________ : ORDER INSTITUTING PROCEEDINGS, : MAKING FINDINGS AND IMPOSING In the Matter of : REMEDIAL SANCTIONS PURSUANT : TO SECTIONS 15(b) AND 19(h) OF William Scott Smith, : THE SECURITIES EXCHANGE ACT OF : 1934 : Respondent. : ______________________________: I. The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest to institute public administrative proceedings against William Scott Smith ("Respondent" or "Smith") pursuant to Sections 15(b) and 19(h) of the Securities Exchange Act of 1934 ("Exchange Act"). II. In anticipation of the institution of the administrative proceedings, Respondent has submitted an Offer of Settlement ("Offer") which the Commission has determined is in the public interest to accept. Solely for the purpose of this proceeding, and any other proceeding brought by or on behalf of the Commission or in which the Commission is a party, and without admitting or denying the findings contained in this Order Instituting Proceedings, Making Findings and Imposing Remedial Sanctions Pursuant to Sections 15(b) and 19(h) of the Securities Exchange Act of 1934 ("Order"), except as to the entry of the injunction set forth in Section IV.B. below, which he admits, Respondent consents to the issuance of this Order and to the entry of the findings and the imposition of the remedial sanctions set forth below. III. Accordingly, IT IS ORDERED that public administrative proceedings pursuant to Sections 15(b) and 19(h) of the Exchange Act be, and hereby are, instituted. ==========================================START OF PAGE 2====== IV. On the basis of this Order and the Offer, the Commission finds that: A. From 1987 to December 1989, Smith was a registered representative of Baird Patrick & Co., Inc., a broker-dealer registered with the Commission. From December 1989 to December 1990, Smith was a registered representative of Paulson Investment Company, Inc., another broker-dealer registered with the Commission. B. On January 31, 1995, the Commission commenced a civil action against Smith, among others, SEC v. Melbourne Capital Corporation, et al., 95 Civ. 0678 (SHS) (S.D.N.Y. Jan. 31, 1995), alleging, among other things, that Smith controlled the activities of Melbourne Capital Corp. ("MCC") from its inception. The Complaint further alleges that Smith misrepresented material facts in offering and selling MCC securities in the initial public offering ("IPO"); misused and diverted the proceeds of the IPO and from the exercise of MCC warrants; and misrepresented material facts in periodic reports and other documents filed with the Commission. In that civil action, on August 28, 1996, Smith was permanently enjoined on consent by the United States District Court for the Southern District of New York from future violations of Section 17(a) of the Securities Act, and Sections 10(b), 13(b)(2), 15(a), 15(c)(1) and 15(d) of the Exchange Act and Rules 10b-5, 12b-20, 15c1-5, 15c1-6, 15d-1 and 15d-13. Smith neither admits nor denies the allegations in the Complaint. V. In view of the foregoing, the Commission deems it appropriate and in the public interest to impose the sanction specified by Respondent in his Offer. Accordingly, IT IS ORDERED that effective immediately, Smith be, and hereby is, barred from association with any broker, dealer, investment adviser, investment company, or municipal securities dealer. By the Commission. Jonathan G. Katz Secretary Service List Rule 141 of the Commission's Rules of Practice provides that the Secretary, or another duly authorized officer of the Commission, shall serve a copy of an order instituting proceedings on each person named in the order as a party. The attached Order has been sent to the following parties and other persons entitled to notice. Honorable Brenda P. Murray Chief Administrative Law Judge Securities and Exchange Commission 450 Fifth Street, N.W., Stop 11-6 Washington, D.C. 20549 Division of Enforcement Securities and Exchange Commission 450 Fifth Street, N.W., Stop 4-8B Washington, D.C. 20549 Attn: Alma M. Angotti, Esq. Northeast Regional Office Securities and Exchange Commission 7 World Trade Center, 13th Floor New York, New York 10048 Attn: Peter D. Goldstein, Esq. Patti E. Evans, Esq. Isaacs & Evans, LLP 271 Madison Avenue, Suite 705 New York, New York 10016 Attorney for Respondent William Scott Smith William Scott Smith 315 East 68th Street, Apt. 9K New York, New York 10021 Respondent