==========================================START OF PAGE 1====== UNITED STATES OF AMERICA BEFORE THE SECURITIES AND EXCHANGE COMMISSION SECURITIES EXCHANGE ACT OF 1934 Release No. 38368 \ March 5, 1997 ACCOUNTING AND AUDITING ENFORCEMENT Release No. 894 \ March 5, 1997 ADMINISTRATIVE PROCEEDING File No. 3-9268 _____________________________ : In the Matter of : ORDER INSTITUTING PUBLIC : PROCEEDINGS, MAKING PACE AMERICAN GROUP, INC. : FINDINGS AND REVOKING : REGISTRATION PURSUANT TO : SECTION 12(j) OF THE : SECURITIES EXCHANGE ACT : OF 1934 ----------------------------: I. The Securities and Exchange Commission ("Commission") deems it necessary and appropriate for the protection of investors that public administrative proceedings be, and hereby are, instituted against Pace American Group, Inc. ( Pace American") pursuant to Section 12(j) of the Securities Exchange Act of 1934 ("Exchange Act"). II. In anticipation of the institution of these proceedings, Pace American has submitted an Offer of Settlement ("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 Commission's findings or conclusions contained herein, except as to the Commission's finding of jurisdiction over it and the subject matter, which are admitted, Pace American consents to the entry of the Order Instituting Public Proceedings, Making Findings and Revoking Registration Pursuant to Section 12(j) of the Securities and Exchange Act of 1934 ( the Order ), which revokes the registration of Pace American s class of common stock registered with the Commission pursuant to Section 12(g) of the Exchange Act as set forth below. ==========================================START OF PAGE 2====== III. FACTS On the basis of this Order and Pace American s Offer, the Commission finds that: A. Pace American is a Delaware holding company with its place of business in Boca Raton, Florida. Its principal subsidiaries were American Bonding Company, Inc., which primarily underwrote surety bonds for contractors, and American Sentinel Insurance Company, which sold commercial property and casualty insurance. On September 22, 1992, Pace American filed with the Commission its third amended registration statement on Form S-1 pursuant to Section 12(g) of the Securities Exchange Act of 1934 ("Exchange Act") to register the sale of 1,840,000 shares of common stock. The Form S-1 became effective that day and the company s common stock was listed on the NASDAQ National Market System. On that date, Pace American became subject to the periodic filing requirements of Section 13 or 15(d) of the Exchange Act. B. On March 31, 1993, Pace American filed with the Commission an Annual Report on Form 10-K for its fiscal year ended December 31, 1992. On May 25, 1993, Pace American filed with the Commission its second Amended Annual Report on Form 10- K/A for its fiscal year ended December 31, 1992. Both Forms 10-K contained audited consolidated financial statements for Pace American s fiscal years ended December 30, 1990, December 31, 1991 and December 31, 1992. The Forms 10-K also contained a report of the company s independent auditor, Coopers & Lybrand ( Coopers ), dated March 26, 1993. In the report Coopers certified that Pace American s consolidated financial statements in these annual reports presented fairly, in all material respects, the company s financial condition for each of the three years ended December 31, 1992, in accordance with generally accepted accounting principles. C. On August 5, 1994, Coopers resigned as Pace American s independent accountant without completing its audit of Pace American s consolidated financial statements for the fiscal year ended December 31, 1993. On August 19, 1994, Coopers notified the Commission that information has come to our attention that [Pace American s] estimate for liabilities for unpaid losses and loss adjustment expenses at December 31, 1992 was materially misstated. Coopers added that its March 26, 1993 report on Pace American s consolidated financial statements included in its annual report on Form 10-K/A for the year ended December 31, 1992 should no longer be relied upon. D. On August 18, 1994, NASDAQ delisted Pace American s common shares due to the company's failure to file timely its ==========================================START OF PAGE 3====== Form 10-K for the fiscal year ended December 31, 1993, and to the resignation of its independent auditors. E. In a Current Report on Form 8-K filed with the Commission on August 29, 1994, Pace American disclosed that as a result of the discovery of material information, the Company s financial statements for the year ended December 31, 1992, as well as its interim financial statements for the nine months ended September 30, 1993, would likely be restated to reflect a potentially significant decrease in the Company s earnings for the 1992 fiscal year, with a corresponding decrease in its net loss for 1993. Pace American never filed a restatement or engaged an independent auditor to replace Coopers. F. Pace American has not filed any quarterly or annual reports with the Commission since filing, on January 10, 1994, its Amendment No. 1 on Form 10-Q/A for the quarter ended September 30, 1993. G. On November 22, 1995, Pace American filed a Form 15 with the Commission pursuant to Rule 12g-4(a)(1)(ii) of the Exchange Act to de-register its common stock and to terminate its obligation to file periodic reports with the Commission because its securities were held by less than 500 persons and total assets did not exceed $5 million on the last day of its three most recent fiscal years. H. As a result of the foregoing, Pace American does not have on file with the Commission (1) any audited financial statements or complete annual reports for the fiscal years ended December 31, 1991 and December 31, 1992, or (2) any quarterly or annual reports for the period from September 30, 1993, through November 22, 1995 (when the company filed a Form 15 to terminate its obligation to file periodic reports) in violation of Section 13(a) of the Exchange Act and Rules 13a-1 and 13a-13 thereunder. IV. FINDINGS In view of the foregoing, the Commission finds that it is necessary and appropriate for the protection of investors that Pace American s registration of common stock pursuant to Section 12(g) of the Exchange Act be revoked. ==========================================START OF PAGE 4====== V. Accordingly, IT IS HEREBY ORDERED, pursuant to Section 12(j) of the Exchange Act, that the registration pursuant to Section 12(g) of the Exchange Act of Pace American s common stock be, and it hereby is, revoked. This Order shall be effective immediately. By the Commission. Jonathan G. Katz Secretary