SECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
SECURITIES ACT OF 1933
SECURITIES EXCHANGE ACT OF 1934
CEASE-AND-DESIST PROCEEDINGS INSTITUTED AGAINST WILLIAM J. BOSSO
On September 29, 2000 the Commission announced the institution of cease-and-desist proceedings pursuant to Section 8A of the Securities Act of 1933 and Section 21C of the Securities Exchange Act of 1934 against William J. Bosso, former President and Chairman of the Board of Affinity Entertainment, Inc. In the order instituting proceedings, the Division of Enforcement alleges that Bosso was a cause of violations of Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5.
The Division alleges that Bosso violated these provisions by issuing two million shares of Affinity stock to Guido Bensberg, in exchange for Bensberg's promise to pay $10 million, without adequate legends or other safeguards to put third parties on notice of the contractual restrictions on the stock, which prohibited sale, transfer or disposal for a year. The Division alleges that Bensberg falsely represented to Lehman Brothers that he owned the stock outright and that it was freely tradeable, and on that basis received $6.5 million in credit from the firm. On September 17, 1997, the Commission sued Bensberg and several others for securities fraud in federal court in the Southern District of California. The action against Bensberg is pending.
A hearing will be held before an Administrative Law Judge to determine whether the staff's allegations against William J. Bosso are true, and if so, what remedial sanctions are appropriate.