UNITED STATES OF AMERICA
Securities Act of 1933
Securities Exchange Act of 1934
The Securities and Exchange Commission ("Commission") instituted public administrative and cease-and-desist proceedings pursuant to Section 8A of the Securities Act of 1933 ("Securities Act"), and Sections 15(b), 19(h) and 21C of the Securities Exchange Act of 1934 ("Exchange Act") in this matter on November 18, 1996. Respondent Richard L. Goodrich ("Goodrich") 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 in which the Commission is a party, and without admitting or denying the findings herein, except for those contained in paragraphs II.A., D. and E.3. below, which are admitted, Goodrich consents to the entry of this Order Making Findings and Imposing Remedial Sanctions and Cease-and-Desist Order ("Order").
A. Cohig & Associates Inc. ("Cohig") is a broker-dealer registered with the Commission pursuant to Section 15(b) of the Exchange Act (File No. 8-33481) since March 1985, with its principal place of business in Denver, Colorado. At relevant times, it maintained a branch office in Solana Beach, California.
B. At all times relevant to this proceeding, Eagle Holdings, Inc. ("Eagle") was a publicly held corporation with its principal place of business in Mesa, Arizona. At all times relevant herein, Eagle common stock was traded on NASDAQ.
C. At all times relevant to this proceeding, Teletek, Inc. ("Teletek") was a publicly held corporation with its principal place of business in Las Vegas, Nevada. At all times relevant herein, Teletek common stock traded in the over-the-counter markets, including from time to time on NASDAQ.
D. Goodrich is a resident of San Diego, California. He was at all relevant times the president of Colton Ventures, Inc., a Utah corporation with its principal place of business in Colton. Goodrich was employed as a registered representative at the Solana branch office of Cohig from January 1992 to December 1993.
E. From at least September 1992 through June 1993, Goodrich willfully violated Section 17(a) of the Securities Act, Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, in that he, directly or indirectly, in connection with the offer, purchase or sale of certain securities, by use of the means or instrumentalities of interstate commerce and by use of the mails, employed devices, schemes, or artifices to defraud, may have obtained money or property by means of, made untrue statements of material fact and omitted to state material facts necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading, and engaged in transactions, practices, or courses of business which would and did operate as a fraud or deceit upon purchasers of such securities.
1. As part of the aforesaid conduct, Goodrich and Colton Ventures collectively received at least $76,440 from persons controlling or otherwise associated with Eagle, and disbursed a portion of such funds as undisclosed compensation to registered representatives at Cohig in Solana Beach to induce them to tout Eagle stock to investors.
2. As a further part of the aforesaid conduct, from September 1992 through approximately February 1993, Goodrich conspired with others to pay undisclosed compensation to representatives at Cohig in Solana Beach to induce them to tout Teletek stock to investors.
3. On March 3, 2000, Goodrich was convicted by the United States District Court for the District of Nevada of one count of conspiracy to commit securities fraud and wire fraud in connection with his participation in the Teletek scheme. (U.S. v. Goodrich, Case No. CR-S-96-271-PMP (D. Nev.)
F. Goodrich has submitted a sworn financial statement and other evidence and has asserted his inability to pay disgorgement, prejudgment interest or a civil penalty. The Commission has reviewed the sworn financial statement and other evidence provided by Goodrich and has determined that he does not have the financial ability to pay disgorgement, prejudgment interest, or a civil penalty.
In view of the foregoing, it is in the public interest and for the protection of investors to impose the sanctions specified in the Offer.
Accordingly, IT IS HEREBY ORDERED THAT:
A. Pursuant to Section 8A of the Securities Act and Section 21C of the Exchange Act, Goodrich be, and hereby is, ordered to cease and desist from committing or causing any violations and any future violations of Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder;
B. Goodrich be, and hereby is, barred from association with any broker or dealer;
C. Goodrich shall pay disgorgement in the amount of $76,440, plus prejudgment interest, but that payment of such amount is waived based upon his demonstrated inability to pay;
D. Goodrich shall comply with his undertaking to provide, at the Commission's request, on reasonable notice and without service of a subpoena, discovery and to testify truthfully at any deposition and at any judicial or administrative proceeding related to the order instituting proceedings in this matter or any allegations therein, or any other proceeding brought by the Commission as a result of its investigation titled In the Matter of Eagle Holdings, Inc., D-1941, and that he will continue to be considered a party to this action for purposes of the Right to Financial Privacy Act of 1978 [12 U.S.C. 3401-22], except that Goodrich does not hereby waive his privilege against self-incrimination under the Fifth Amendment to the United States Constitution.
IT IS FURTHER ORDERED that the Division of Enforcement may, at any time following the entry of the Order, petition the Commission to (1) reopen this matter to consider whether Goodrich provided accurate and complete financial information at the time such representations were made; (2) determine the amount of the civil penalty to be imposed; and (3) seek any additional remedies that the Commission would be authorized to impose in this proceeding if the Offer had not been accepted, provided that no other issues shall be considered in connection with any such petition other than whether the financial information provided by Goodrich was fraudulent, misleading, inaccurate or incomplete in any material respect, and whether any additional remedies should be imposed, and that Goodrich may not, by way of defense to any such petition, contest the findings in the Order or the Commission's authority to impose additional remedies that were available in the original proceeding.
By the Commission.
1 The findings herein are made pursuant to the Offer and are not binding on any other person or entity in this or any other proceeding.