SECURITIES EXCHANGE ACT OF 1934
Release No. 41792 / August 26, 1999
ADMINISTRATIVE PROCEEDING
File No. 3-9988
| In the Matter of Bassett Furniture Industries, Inc., |
ORDER INSTITUTING PROCEEDINGS PURSUANT TO SECTIONS 17A(c)(3) AND 21C OF THE SECURITIES EXCHANGE ACT OF 1934, MAKING FINDINGS AND IMPOSING SANCTIONS |
I.
The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest to institute public administrative and cease-and-desist proceedings against Bassett Furniture Industries, Inc. (File No. 84-0051) ("Bassett"), and Thermal Energy Storage, Inc. (File No. 84-1300) ("Thermal") (collectively, "Respondents") pursuant to Sections 17A(c)(3) and 21C of the Securities Exchange Act of 1934 ("Exchange Act").
II.
In anticipation of the institution of these administrative proceedings, the Respondents have submitted Offers of Settlement which the Commission has determined to accept. Solely for the purpose of these proceedings and any other proceedings 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 for those findings as to each Respondent, respectively, set forth in paragraphs III. A. below and the jurisdiction of the Commission over this matter, which are admitted by the Respondents, Respondents consent to the entry of this Order Instituting Proceedings Pursuant to Sections 17A(c)(3) and 21C of the Securities Exchange Act of 1934, Making Findings and Imposing Sanctions ("Order").
Accordingly, IT IS ORDERED that administrative and cease-and-desist proceedings pursuant to Sections 17A(c)(3) and 21C of the Exchange Act be, and hereby are, instituted.
III.
On the basis of this Order and the Offers of Settlement submitted by the Respondents, the Commission makes the following findings:
A. Respondent Bassett ( File No. 84-0051) has been registered with the Commission as a transfer agent since February 2, 1977 pursuant to Section 17A(c)(2) of the Exchange Act. Respondent Thermal ( File No. 84-1300) a Colorado corporation, has been registered with the Commission as a transfer agent since April 21, 1985 pursuant to Section 17A(c)(2) of the Exchange Act.
B. The Respondents Bassett and Thermal are transfer agents that, under Rule 17Ad-18(b) of the Exchange Act, were required to file Part I of Form TA-Y2K.
C. On August 4, 1998, the staff of the Commission sent a letter to Respondents Bassett and Thermal stating that the Commission had issued Rule 17Ad-18 and enclosing a copy of Form TA-Y2K. This letter directed Respondents Bassett and Thermal to file Form TA-Y2K by August 31, 1998, to reflect their efforts to address potential Year 2000 problems as of July 15, 1998.
D. As of September 17, 1998, Respondents Bassett and Thermal had not filed Part I of Form TA-Y2K with the Commission.
E. On September 18, 1998, the Commission staff sent Respondents Bassett and Thermal a letter warning that transfer agents who failed to file Form TA-Y2K might be subject to the institution of an administrative proceeding by the Commission for violations of Sections 17(a) of the Exchange Act, Rule 17Ad-18 thereunder, or other provisions of the securities laws, rules, or regulations. The letter gave Respondents Bassett and Thermal a grace period of until September 30, 1998, within which they could file Form TA-Y2K without any enforcement action being taken against them. The September 18, 1998, letter was returned to the Commission, marked undeliverable as addressed, because Respondents Bassett and Thermal failed to advise the Commission of its change of address.
F. As of February 8, 1999, the Respondents Bassett and Thermal still had not filed Part I of Form TA-Y2K with the Commission.
G. By virtue of the conduct discussed above, Respondents Bassett and Thermal willfully violated Sections 17(a)(3) and 17A(d)(1) of the Exchange Act and Rule 17Ad-18 promulgated thereunder, which requires certain registered transfer agents to file with the Commission Form TA-Y2K regarding their Year 2000 compliance efforts. These transfer agents must file Part I [and, if not exempt under Rule 17Ad-13(d) of the Exchange Act, Part II] of Form TA-Y2K, no later than August 31, 1998. Part I of Form TA-Y2K should reflect the transfer agent's preparation for the Year 2000 as of July 15, 1998.
H. Respondent Thermal has submitted a sworn financial statement and other evidence and has asserted its financial inability to pay a civil penalty. The Commission has reviewed the sworn financial statements and other evidence provided by Respondent Thermal and has determined that Respondent Thermal does not have the financial ability to pay a civil penalty.
IV.
In view of the foregoing, it is in the public interest to impose the sanction and cease-and-desist order specified in the Offers of Settlement.
Accordingly, IT IS ORDERED that:
A. The Respondents Bassett and Thermal be, and hereby are, censured;
B. Pursuant to Section 21C of the Exchange Act, the Respondents Bassett and Thermal shall cease and desist from committing or causing any violations, and committing or causing any future violations of Sections 17(a)(3) and 17A(d)(1) of the Exchange Act and Rule 17Ad-18 thereunder;
C. Pursuant to Section 21B of the Exchange Act, Respondent Bassett shall, prior to the close of business within ten business days after the date of the entry of the Order instituting proceedings against them, pay a civil penalty in the amount of $5,000 to the United States Treasury. The payment shall be: (1) made by United States postal money order, certified check, bank cashier's check, or bank money order; (2) made payable to the "Securities and Exchange Commission"; (3) hand-delivered or mailed to the Comptroller of the Securities and Exchange Commission, Operations Center, 6432 General Green Way, Stop 0-3, Alexandria, VA 22312; and (4) submitted with a cover letter that identifies by firm name Bassett as a Respondent in this proceeding and the file number of this proceeding. Copies of the cover letter and money order or check shall be sent to Donald M. Hoerl, Associate Regional Director, Central Regional Office, Securities and Exchange Commission, 1801 California St., Suite 4800, Denver, CO 80202; and
D. The Division of Enforcement may, at any time following the entry of this Order, petition the Commission to: (1) reopen this matter to consider whether Respondent Thermal provided accurate and complete financial information at the time such representations were made; (2) determine the amount of the civil penalty to be imposed; and (3) seek any additional remedies that the Commission would be authorized to impose in this proceeding if Respondent Thermal`s Offer had not been accepted. No other issues shall be considered in connection with this petition other than whether the financial information provided by Respondent Thermal was fraudulent, misleading, inaccurate or incomplete in any material respect, the amount of civil penalty to be imposed and whether any additional remedies should be imposed. Respondent Thermal may not, by way of defense to any such petition, contest the findings in this Order or the Commission's authority to impose any additional remedies that were available in the original proceeding.
By the Commission.
Jonathan G. Katz
Secretary