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U.S. Securities and Exchange Commission

Before the

Release No. 8122 / August 16, 2002

Release No. 1615 / August 16, 2002

File No. 3-10867

In the Matter of






The Securities and Exchange Commission (the "Commission") deems it appropriate that cease-and-desist proceedings pursuant to Section 8A of the Securities Act of 1933 ("Securities Act") and Rule 102(e)(1)(ii) and (iii) of the Commission's Rules of Practice against Kurt D. Saliger ("Saliger") be instituted.1


In anticipation of these proceedings, Saliger submitted an Offer of Settlement ("Offer"), which the Commission has determined to accept. Solely for the purpose of these proceedings and any other proceeding brought by or on behalf of the Commission or in which the Commission is a party, Saliger consents to the entry of this Order Instituting Proceedings, Making Findings and Imposing Cease-and-Desist Order, and Imposing Sanctions Pursuant to Rule 102(e) of the Commission's Rules of Practice ("Order") without admitting or denying the findings set forth in this Order, except that Saliger admits the jurisdiction of the Commission over him and over the subject matter of these proceedings and the matters described in paragraph III.A. of this Order.

The Commission has determined that it is appropriate to accept Saliger's Offer and accordingly is issuing this Order.


On the basis of this Order and the Offer, the Commission finds2 the following:

A. Kurt D. Saliger, age 45, is a resident of Las Vegas, Nevada. Saliger became licensed as a CPA in Texas in 1982, and is currently licensed to practice as a CPA in Nevada.

B. Gas and Oil Technologies, Inc. ("Gas & Oil") is a Delaware corporation headquartered in Woodland Hills, California. It has no public market for its securities but has applied to have its common stock quoted on NASDAQ under the symbol "GAOL." On October 15, 2001, Gas & Oil filed a registration statement on Form S-1, seeking to raise up to $60 million from the sale of its common stock in an initial public offering.

C. From July of 2001 through late 2001, Gas & Oil engaged Saliger as its independent auditor. Saliger audited and issued reports on the financial statements of Gas & Oil for its year ended December 31, 2000 and for its period ended June 30, 2001 and performed a review for its period ended September 30, 2001. Saliger was the only person who worked on these engagements.

D. With respect to the audit reports referenced in paragraph C. above, Saliger issued false reports which claimed that Gas & Oil's financial statements presented fairly, in all material respects, the financial position of the company in conformity with generally accepted accounting principles ("GAAP"), when, in fact, those financial statements were materially false. Saliger also represented in those reports that his examinations of Gas & Oil's financial statements were conducted in accordance with generally accepted auditing standards ("GAAS"), when they were not.

E. In the course of those engagements, Saliger failed to comply with GAAS, as follows:

  1. Saliger failed to obtain written representation letters from management of Gas & Oil;

  2. Saliger failed to prepare audit programs, to obtain an understanding of internal controls and to conduct audit risk assessments, sufficient to determine the nature, timing and extent of substantive tests needed for the audits;

  3. Saliger failed to obtain sufficient competent evidential matter upon which to base an opinion, specifically as it related to the valuation and recording of patents on the financial statements; and

  4. Saliger issued unqualified audit reports certifying that Gas & Oil's financial statements fairly presented its financial condition in conformity with GAAP, when in fact they did not.

F. GAAP requires that patents be recorded consistent with Accounting Principles Board Opinion No. 17, which states that intangibles should be recorded at cost at date of acquisition. If these costs are not determinable, GAAP requires that the patents be recorded at their fair value. Nevertheless, in its financial statements for the period ended June 30, 2001, Gas & Oil recorded both an asset and income from the purchase of patents in the amount of $21.75 million which represented 100% of both its assets and income, without receiving any persuasive evidence of either the fair value of the patents or their cost at date of acquisition.

G. Because of the method utilized by Gas & Oil for the recording of the acquisition of patents, the financial statements included in the Form S-1 were not prepared in accordance with GAAP. Saliger knew or was reckless in not knowing that these financial statements did not comply with GAAP.

H. Based on the conduct set forth above, the Commission finds that Respondent Saliger has willfully violated Section 17(a) of the Securities Act.

I. Saliger recklessly engaged in improper professional conduct and willfully violated, or willfully aided and abetted the violation of, provisions of the Federal securities laws and rules, for purposes of Rule 102(e)(1)(ii) and (iii) respectively, of the Commission's Rules of Practice.


In view of the foregoing, it is appropriate to impose the sanction agreed to in the Offer.

Accordingly, it is hereby ordered that:

  1. Saliger be ordered to cease and desist from committing or causing any violation and any future violation of Section 17(a) of the Securities Act;

  2. IT IS FURTHER ORDERED that Saliger shall, within 45 days of the entry of this Order, disgorge the fees he received for the attest services provided to Gas & Oil along with prejudgment interest thereon in the total amount of $6,072.28 to the United States Treasury. Such payment shall be: (A) made by United States postal money order, certified check, bank cashier's check or bank money order; (B) made payable to the Securities and Exchange Commission; (C) hand-delivered or mailed to the Comptroller, Securities and Exchange Commission, Operations Center, 6432 General Green Way, Alexandria, Stop 0-3, VA 22312; and (D) submitted under cover letter that identifies Kurt D. Saliger as a Respondent in these proceedings, the file number of these proceedings, a copy of which cover letter and money order or check shall be sent to Kenneth D. Israel, District Administrator, Salt Lake District Office, Securities and Exchange Commission, 50 South Main Street, Suite 500, Salt Lake City, Utah 84144; and

  3. That, effective immediately, Saliger be denied the privilege of appearing or practicing before the Commission as an accountant.

By the Commission.

Jonathan G. Katz

1 Paragraph 1 of Rule 102(e) provides, in relevant part, that: The Commission may . . . deny, temporarily or permanently, the privilege of appearing or practicing before it in any way to any person who is found by the Commission after notice and opportunity for hearing in the matter: . . . (ii) [t]o be lacking in character or integrity or to have engaged in unethical or improper professional conduct; or (iii) [t]o have willfully violated, or willfully aided and abetted the violation of any provision of the Federal securities laws or the rules and regulations thereunder.
2 The findings herein are made pursuant to the Offer of Settlement of Saliger and are not binding on any other person or entity in this or any other proceeding.


Modified: 08/16/2002