SECURITIES EXCHANGE ACT OF 1934
Release No. 41756 / August 18, 1999

ADMINISTRATIVE PROCEEDING
File No. 3-9979

In the Matter of

CHRISTIAN R. HIGGINS,
CHARLES L. POWELL,
JAMES P. GALLAHER,
DALE J. ENGELHARDT, and
TREY L. FRIEDMANN,
Respondents.

ORDER INSTITUTING PUBLIC
ADMINISTRATIVE PROCEEDING
PURSUANT TO SECTIONS 15(b)
AND 19(h) OF THE SECURITIES
EXCHANGE ACT OF 1934, MAKING
FINDINGS AND IMPOSING
REMEDIAL SANCTIONS

I.

The Securities and Exchange Commission (the "Commission") deems it appropriate and in the public interest that a public administrative proceeding be instituted pursuant to Sections 15(b) and 19(h) of the Securities Exchange Act of 1934 ("Exchange Act") against Respondents Christian R. Higgins ("Higgins"), Charles L. Powell ("C. Powell"), James P. Gallaher ("Gallaher"), Dale J. Engelhardt ("Engelhardt") and Trey L. Friedmann ("Friedmann") (collectively, the "Salesmen").

Accordingly, IT IS HEREBY ORDERED that said proceeding against Higgins, C. Powell, Gallaher, Engelhardt and Friedmann be, and hereby is, instituted.

II.

In anticipation of the institution of this proceeding, the Salesmen have submitted offers of settlement ("Offers") to the 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 herein, except that the Salesmen admit the jurisdiction of the Commission over them and over the subject matter of this proceeding and the entry of a Final Judgment of Permanent Injunction against them, the Salesmen consent to the entry of this Order Instituting Public Administrative Proceeding Pursuant to Sections 15(b) and 19(h) of the Securities Exchange Act of 1934, Making Findings and Imposing Remedial Sanctions ("Order") and to the entry of the findings and sanctions set forth below.

III.

On the basis of this Order and the Salesmen's Offers, the Commission finds that:

A. From at least June 1996 to June 1998, Higgins, C. Powell, Gallaher and Engelhardt were registered representatives associated with Irvine Securities, Inc. ("Irvine Securities"), a California corporation and broker-dealer registered with the Commission, located in Irvine, California. Higgins, C. Powell, Gallaher and Engelhardt sold limited partnership interests through Irvine Securities; Friedmann, who was seeking to become associated with Irvine Securities, offered limited partnership interests through Environmental Energy, Inc. Higgins, C. Powell, Gallaher, Engelhardt and Friedmann made materially misleading statements in offering limited partnership interests to potential investors in the last two offerings (Environmental Operating Partners, Ltd. ("EOP") and Kentucky Gas Partners, Ltd. ("KGP")).

B. On August 12, 1999, without admitting or denying the allegations in the Commission's Complaint, Higgins, C. Powell, Gallaher and Engelhardt were permanently enjoined from future violations of Section 17(a) of the Securities Act of 1933 ("Securities Act") and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder; Friedmann was permanently enjoined from future violations of Section 17(a) of the Securities Act and Section 15(a) of the Exchange Act. The Court did not impose civil penalties against Higgins, C. Powell, Gallaher, Engelhardt and Friedmann based on their demonstrated inability to pay. SEC v. Environmental Energy, Inc., et al., Civil Action No. 98-6060 CM (BQRx) (C.D. Cal.).

C. The Commission's Complaint, filed on July 28, 1998, in the above-referenced action, alleges, among other things, that Higgins, C. Powell, Gallaher, Engelhardt and Friedmann made misleading statements in offering limited partnership interests to potential investors.

D. The Commission's Complaint alleges that during the EOP offering period, Higgins, C. Powell and Gallaher made misrepresentations in their solicitations of investors regarding the amount of EOP's returns, the amount an investment in EOP would increase in value and their own purported investment in EOP.

E. The Commission's Complaint further alleges that during the KGP offering period, Higgins, Engelhardt and Friedmann made misrepresentations in their respective solicitations of investors. In particular, they misrepresented the amount of KGP's returns, the amount of EOP's returns, their own purported investment in KGP and the status of construction for a utility company that was going to purchase gas from KGP.

IV.

Based on the foregoing, the Commission deems it appropriate and in the public interest to impose the sanctions specified by the Salesman in their Offers.

Accordingly, IT IS HEREBY ORDERED that Higgins, C. Powell, Gallaher, Engelhardt and Friedmann are suspended from association with any broker or dealer for a period of 12 months, effective on the second Monday following the entry of this Order.

By the Commission.

Jonathan G. Katz

Secretary