UNITED STATES OF AMERICA Before the SECURITIES AND EXCHANGE COMMISSION SECURITIES ACT OF 1933 Release No. 7661 / March 30, 1999 SECURITIES EXCHANGE ACT OF 1934 Release No. 41228 / March 30, 1999 ADMINISTRATIVE PROCEEDING File No. 3 - 9151 - - - - - - - - - - - - - - - - - - - In the Matter of : ORDER MAKING : FINDINGS, : IMPOSING REMEDIAL : SANCTIONS Robert Mitchell and : AND IMPOSING A : CEASE-AND- Gary Mitchell, : DESIST ORDER : Respondents. : - - - - - - - - - - - - - - - - - - - I. In connection with a public administrative proceeding instituted against them pursuant to Section 8A of the Securities Act of 1933 ("Securities Act") and Sections 15(b) and 21C of the Securities Exchange Act of 1934 ("Exchange Act"), Robert Mitchell and Gary Mitchell have submitted Offers of Settlement ("Offers") to the Securities and Exchange Commission ("Commission"), which the Commission has determined to accept. Solely for the purpose of this proceeding 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 jurisdiction which is admitted, Robert Mitchell and Gary Mitchell consent to the entry of the findings and remedial sanctions set forth below. II. On the basis of this Order and the Offers submitted by Robert Mitchell and Gary Mitchell, the Commission makes the following findings[1]: A. Robert Mitchell, at the time of the conduct in question was 28 years old, and a resident of Colorado. Although Robert Mitchell was previously a registered representative, at the time of the conduct in question he was not, and currently is not, associated with a registered broker-dealer. B. Gary Mitchell, at the time of the conduct in question was 28 years old, and a resident of Colorado. Although Gary Mitchell was previously a registered representative, at the time of the conduct in question he was not, and currently is not, associated with a registered broker-dealer. C. Grafix Time Corp. is located in Denver, Colorado. It purports to market modular sunglasses that allow the customer to mix and match colors, textures and lens styles. The company's securities are registered with the Commission pursuant to Section 15(d) of the Exchange Act and are listed on the Over-the-Counter Bulletin Board under the symbol CRRA. D. Foxmoor Industries, Ltd. f/k/a Foxmoor International Films Ltd. is located in Denver, Colorado. It purports to be a factorer and a mortgage banker. The company's securities are registered with the Commission pursuant to Section 12(g) of the Exchange Act and are listed on the NASDAQ SmallCapSM Market under the symbol FOXI. E. During the period from at least in or about November 1995 through June 1996, Robert Mitchell and Gary Mitchell offered to pay, and did pay, undisclosed compensation to person(s) whom they believed to be registered representative(s) or registered principal(s), to induce such registered representatives, registered principals or persons to purchase the stock of CRRA and FOXI for the account of customers. For example, on or about June 11, 1996, Robert Mitchell and Gary Mitchell paid $7,000 to a broker-dealer which was undisclosed compensation for previous purchases of 100,000 shares of CRRA at approximately $0.08 per share by the broker-dealer, and for a previous purchase of 4,000 shares of FOXI at approximately $2.25 per share by the broker-dealer. Accordingly, Robert Mitchell and Gary Mitchell willfully violated, and committed and caused violations of, Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. F. On April 23, 1998, and March 6, 1998, Robert Mitchell and Gary Mitchell, respectively, pled guilty in the United States District Court for the Southern District of New York to one felony count of conspiracy in violation of Section 371 of Title 18, United States Code, to commit the object crimes of (a) wire fraud in violation of Sections 1343 and 1346 of Title 18, United States Code and (b) commercial bribery in violation of Section 1952(a)(3) of Title 18, United States Code. United States v. Robert Mitchell and Gary Mitchell, Case No. S1 97 Cr. 450 (RAP). G. The indictment underlying Robert Mitchell's and Gary Mitchell’s guilty plea alleged, inter alia, that from November 29, 1995 until June 1996, Robert Mitchell and Gary Mitchell conspired to commit wire fraud by devising a scheme and artifice to "(a) deprive a broker's customer of the intangible right to a broker's honest services; (b) violate a broker's duty to disclose to his customer all material facts concerning securities transactions in the customer's account; and (c) obtain the customer's money and property" in violation of federal laws. The indictment further alleged Robert Mitchell and Gary Mitchell "offered to make and did make unlawful secret payments of cash to securities brokers . . . to induce the brokers to cause their customers to purchase" the stock of FOXI and CRRA. III. Based on the foregoing, the Commission deems it appropriate and in the public interest to impose the sanctions and issue the cease-and-desist order as specified in the Offers of Settlement. Accordingly, IT IS HEREBY ORDERED that: 1. Respondent Robert Mitchell and Respondent Gary Mitchell, effective immediately, 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; 2. Respondent Robert Mitchell and Respondent Gary Mitchell, effective immediately, are barred from participation in penny stock offerings; and 3. Respondent Robert Mitchell, prior to the close of business on the thirtieth business day after the date of this Order, pay disgorgement in the amount of $1,100, plus interest, from November 1995 to the date of the Order[2], 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 U.S. Securities and Exchange Commission; (c) hand-delivered or mailed to the Comptroller, Securities and Exchange Commission, Mail Stop 0-3, 450 Fifth Street, N.W., Washington, D.C. 20549l and (d) submitted under cover letter which identifies Robert Mitchell as the Respondent in this proceeding, the file number of this proceeding, 3-9151, and a copy of which cover letter and money order or check shall be sent to Thomas Capezza, Senior Attorney, Northeast Regional office, Securities and Exchange Commission, 7 World Trade Center, 13th Floor, New York, New York 10048. For the Commission, by its Secretary, pursuant to delegated authority. Jonathan G. Katz Secretary **FOOTNOTES** [1]: Any findings contained herein are made pursuant to Respondent Robert Mitchell’s and Respondent Gary Mitchell’s Offers of Settlement and are not binding on any other person or entity named as a respondent in this or any other proceeding. [2]: The amount of prejudgment interest is to be calculated using the Internal Revenue Service late payment rate.