UNITED STATES OF AMERICA before the SECURITIES AND EXCHANGE COMMISSION SECURITIES EXCHANGE ACT OF 1934 Release No. 40173 / July 7, 1998 ADMINISTRATIVE PROCEEDING File No. 3-9644 : ORDER INSTITUTING PUBLIC In the Matter of : ADMINISTRATIVE PROCEEDINGS : PURSUANT TO SECTIONS J.W. KORTH & CO. and : 15(b) AND 19(h) OF THE JAMES WILDER KORTH, : SECURITIES EXCHANGE ACT : OF 1934, MAKING FINDINGS, : AND IMPOSING REMEDIAL Respondents. : SANCTIONS : I. The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest to institute public administrative proceedings pursuant to Sections 15(b) and 19(h) of the Securities Exchange Act of 1934 ("Exchange Act") against Respondents J.W. Korth & Co. ("JWK") and James Wilder Korth ("Korth"). II. In anticipation of the institution of these public administrative proceedings, JWK and Korth have each submitted an Offer of Settlement, 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, and without admitting or denying the findings contained herein, except as to the jurisdiction of the Commission over the Respondents and over the subject matter of these proceedings and with respect to Respondent JWK as to Section III., paragraphs 1. and 3., below, and with respect to Respondent Korth as to Section III., paragraphs 2. and 4., below, which are admitted, Respondents JWK and Korth each consent to the entry of findings and remedial sanctions set forth below. Accordingly, IT IS ORDERED THAT public administrative proceedings pursuant to Sections 15(b) and 19(h) of the Exchange Act be, and, they hereby are, instituted. III. On the basis of this Order and the Offers of Settlement, the Commission finds that: 1. Respondent JWK was a broker-dealer registered with the Commission during the relevant time periods. 2. Respondent Korth was associated with JWK, a broker-dealer registered with the Commission and served as its managing general partner during the relevant time periods. 3. On January 21, 1998, a final judgment of permanent injunction was entered against Respondent JWK in the United States District Court for the Southern District of Florida, permanently enjoining Respondent JWK from further violations of Sections 17(a)(1) and 17(b) of the Exchange Act and Rule 17a-4(j) promulgated thereunder. The final judgment also imposed a civil money penalty of $55,000 against Respondent JWK. Securities and Exchange Commission v. J.W. Korth & Co. and James Wilder Korth, 1998 WL 30243 (S.D. Fla. 1998). 4. On January 21, 1998, a final judgment of permanent injunction was entered against Respondent Korth in the United States District Court for the Southern District of Florida, permanently enjoining Respondent Korth from aiding and abetting further violations of Sections 17(a)(1) and 17(b) of the Exchange Act and Rule 17a-4(j) promulgated thereunder. The final judgment also imposed a civil money penalty of $5,500 against Respondent Korth. Securities and Exchange Commission v. J.W. Korth & Co. and James Wilder Korth, 1998 WL 30243 (S.D. Fla. 1998). 5. The Commission's complaint, filed in the matter described in paragraph 3., above, alleges that from in or about November 1996 to in or about February 1997, Respondent JWK violated Sections 17(a)(1) and 17(b) of the Exchange Act and Rule 17a-4(j) promulgated thereunder, by failing to furnish promptly to representatives of the Commission, legible and true and complete copies of those records it was required to preserve under Rule 17a- 4(a), and by failing to make such records subject to reasonable, periodic, special, or other examinations by representatives of the Commission. As part of the aforesaid conduct, Respondent JWK refused to furnish promptly true, complete and unredacted copies of blotters or other original entry records setting forth the certificate numbers for certain German bonds held in inventory. 6. The Commission's complaint, filed in the matter described in paragraph 4., above, alleges that from in or about November 1996 to in or about February 1997, Respondent Korth aided and abetted JWK's violations of Sections 17(a)(1) and 17(b) of the Exchange Act and Rule 17a-4(j) promulgated thereunder, by causing JWK to fail to furnish promptly to representatives of the Commission, legible and true and complete copies of those records it was required to preserve under Rule 17a-4(a), and by causing JWK to fail to make such records subject to reasonable, periodic, special, or other examinations by representatives of the Commission. As part of the aforesaid conduct, Respondent Korth, on behalf of JWK, refused to furnish promptly true, complete and unredacted copies of blotters or other original entry records setting forth the certificate numbers for certain German bonds held in inventory. IV. Based on the foregoing, the Commission deems it appropriate and in the public interest to impose sanctions specified by Respondents JWK and Korth in their respective Offers of Settlement. Accordingly, IT IS ORDERED THAT Respondents JWK and Korth be, and they hereby are, censured. By the Commission. Jonathan G. Katz Secretary - 1 -