UNITED STATES OF AMERICA Before the SECURITIES AND EXCHANGE COMMISSION SECURITIES EXCHANGE ACT OF 1934 Release No. 41268 / April 9, 1999 ADMINISTRATIVE PROCEEDING File No. 3-9870 ______________________________ ) ORDER INSTITUTING PUBLIC In the Matter of ) ADMINISTRATIVE PROCEEDINGS ) PURSUANT TO SECTIONS 15(b) ) CLYDE MORGAN, ) AND 19(h) OF THE SECURITIES ROSS BLEVINS, and ) EXCHANGE ACT OF 1934, DOUG CUTHBERT, ) MAKING FINDINGS AND IMPOSING ) REMEDIAL SANCTIONS Respondents ) I. The Securities and Exchange Commission (Commission) deems it appropriate and in the public interest that public administrative proceedings be instituted pursuant to Sections 15(b) and 19(h) of the Securities Exchange Act of 1934 (Exchange Act) against Clyde Morgan (Morgan), Ross Blevins (Blevins), and Doug Cuthbert (Cuthbert). In anticipation of the institution of these administrative proceedings, Morgan, Blevins, and Cuthbert have submitted Offers of Settlement which the Commission has determined to accept. Solely for the purpose of this proceeding and any other proceedings brought by or on behalf of the Commission, or to which the Commission is a party, and without admitting or denying the findings herein, except as to jurisdiction, the facts set forth in paragraphs II.A. and D. below, which are admitted by Morgan, the facts set forth in paragraphs II.B. and F. below, which are admitted by Blevins, and the facts set forth in paragraphs II.C. and H. below, which are admitted by Cuthbert, Morgan, Blevins and Cuthbert consent to the entry of this Order Instituting Public Administrative Proceedings Pursuant to Sections 15(b) and 19(h) of the Securities Exchange Act of 1934, Making Findings and Imposing Remedial Sanctions ("Order"). Accordingly, it is ordered that proceedings pursuant to Sections 15(b) and 19(h) of the Exchange Act be, and hereby are, instituted. II. On the basis of this Order and the Offers of Settlement submitted by Morgan, Blevins, and Cuthbert, the Commission makes the following findings: A. From in or about June 1994 to March 1995, Morgan, age 68, was acting as a broker as defined by Section 3(a)(4) of the Exchange Act. B. From in or about June 1994 to in or about April 1995, Blevins, age 37, was acting as a broker as defined by Section 3(a)(4) of the Exchange Act. C. From in or about August 1994 to March 1995, Cuthbert, age 40, was acting as a broker as defined by Section 3(a)(4) of the Exchange Act. D. On June 21, 1996, Morgan was criminally convicted, pursuant to his guilty plea, of one count of money laundering (18 U.S.C. §1957) and one count of mail fraud (18 U.S.C. §1341) in the case of United States v. James G. Freeman, et al., No. S1- 4:95 CR 186 (JCH) (E.D. Mo. 1996). Morgan was sentenced to 3 years probation and was ordered to make restitution of $42,830.69 to investors. E. The criminal indictment upon which Morgan's criminal conviction was based alleged that beginning on or about June 1, 1994, Morgan participated with James G. Freeman (Freeman) and others in the marketing and sales of approximately $24 million in unregistered promissory notes (the Freeman notes). The indictment further alleged that in connection with the offer and sale of the Freeman notes, Morgan, directly and indirectly, misrepresented and omitted to state material facts regarding, among other things, the nature of the investments, the risks involved, the use of investor proceeds, the commissions to be paid, and the returns on the investment. The indictment alleged that among other things, Morgan, directly and indirectly, represented to investors that their funds would be invested in various European trading programs, when in fact, Freeman at all times remained in control of such funds, which were used to make "interest" payments to investors and to pay "commissions" to Morgan and the other marketing agents. The indictment also alleged that Morgan participated in the mailing to an investor of a check containing the proceeds of investor funds that was represented to be an "interest" payment, and received via wire transfer to an account controlled by him approximately $214,808.53 of investor funds. F. On June 14, 1996, Blevins was criminally convicted, pursuant to his guilty plea, of one count of wire fraud (18 U.S.C. §1343) and one count of money laundering (18 U.S.C. §1957) in the case of United States v. James G. Freeman, et al., No. S1- 4:95 CR 186 (JCH) (E.D. Mo. 1996). Blevins was sentenced to 33 months in prison and two years probation and was ordered to make restitution of $5100 to investors. G. The criminal indictment upon which Blevins’ criminal conviction was based alleged that beginning on or about June 1, 1994, Blevins participated with James G. Freeman (Freeman) and others in the marketing and sales of approximately $24 million in unregistered promissory notes (the Freeman notes). The indictment further alleged that in connection with the offer and sale of the Freeman notes, Blevins, directly and indirectly, misrepresented and omitted to state material facts regarding, among other things, the nature of the investments, the risks involved, the use of investor proceeds, the commissions to be paid, and the returns on the investment. The indictment alleged that among other things, Blevins, directly and indirectly, represented to investors that their funds would be invested in various European trading programs, when in fact, Freeman at all times remained in control of such funds, which were used to make "interest" payments to investors and to pay "commissions" to Blevins and the other marketing agents. The indictment also alleged that Blevins participated in a facsimile transmission detailing and confirming the payment of approximately $194,732.60 of investor funds to another marketing agent as commissions, and received via wire transfer to an account controlled by him approximately $93,518.45 of investor funds. H. On June 21, 1996, Cuthbert was criminally convicted, pursuant to his guilty plea, of one count of wire fraud (18 U.S.C. §1343) and one count of mail fraud (18 U.S.C. §1341) in the case of United States v. James G. Freeman, et al., No. S1- 4:95 CR 186 (JCH) (E.D. Mo. 1996). Cuthbert was sentenced to 3 years probation and was ordered to make restitution of $358,576.80 to investors. I. The criminal indictment upon which Cuthbert’s criminal conviction was based alleged that beginning on or about June 1, 1994, Cuthbert participated with James G. Freeman (Freeman) and others in the marketing and sales of approximately $24 million in unregistered promissory notes (the Freeman notes). The indictment further alleged that in connection with the offer and sale of the Freeman notes, Cuthbert, directly and indirectly, misrepresented and omitted to state material facts regarding, among other things, the nature of the investments, the risks involved, the use of investor proceeds, the commissions to be paid, and the returns on the investment. The indictment alleged that among other things, Cuthbert, directly and indirectly, represented to investors that their funds would be invested in various European trading programs, when in fact, Freeman at all times remained in control of such funds, which were used to make "interest" payments to investors and to pay "commissions" to Cuthbert and the other marketing agents. The indictment also alleged that Cuthbert participated in the mailing of certain marketing materials to registered insurance agents in the state of Missouri and participated in a facsimile transmission detailing and confirming the payment of approximately $194,732.60 of investor funds to another marketing agent as commissions. III. In view of the foregoing, it is in the public interest to impose the sanctions specified in the Offers of Settlement. ACCORDINGLY, IT IS HEREBY ORDERED THAT: Clyde Morgan be, and hereby is, barred from association with any broker, dealer, investment company, investment adviser or municipal securities dealer. Ross Blevins be, and hereby is, barred from association with any broker, dealer, investment company, investment adviser or municipal securities dealer. Doug Cuthbert be, and hereby is, barred from association with any broker, dealer, investment company, investment adviser or municipal securities dealer. By the Commission. Jonathan G. Katz Secretary