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U.S. Securities and Exchange Commission

Before the

Securities Exchange Act of 1934
Release No. 42157 / November 19, 1999

Accounting and Auditing Enforcement
Release No. 1210 / November 19, 1999

Administrative Proceeding
File No. 3-10104

                               : ORDER INSTITUTING
       In the Matter of        : PROCEEDINGS PURSUANT
                               : TO RULE 102(e) OF THE
     Michael J. Hooper, CPA,   : COMMISSION'S RULES OF 
                               : PRACTICE, MAKING  
           Respondent.         : FINDINGS, AND IMPOSING
                               : REMEDIAL SANCTIONS

The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest that public administrative proceedings pursuant to Rule 102(e)(3)1 of the Commission's Rules of Practice be instituted against Michael J. Hooper ("Hooper").


In anticipation of the institution of this proceeding, Hooper has submitted an Offer of Settlement ("Offer") 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 any of the findings set forth herein, except as to jurisdiction over Hooper and over the subject matter of this proceeding and as to the entry of the permanent injunction as set forth in paragraph III. D. which Hooper admits, Hooper consents to the entry of this Order Instituting Proceedings Pursuant to Rule 102(e) of the Commission's Rules of Practice, Making Findings, and Imposing Remedial Sanctions ("Order") set forth below.


The Commission makes the following findings2.

A. Hooper, age 47, holds a certificate as a Washington State certified public accountant, and was licensed as a Washington state CPA from approximately October 1993 through June 1995.3

B. Hooper, a sole practitioner with an office in Spokane, Washington, prepared financial statements that were included in filings with the Commission consisting of a Form 8-K filed on April 19, 1996 and a Form 10-K filed on October 18, 1996 as shown by the official records of the Commission.

C. Hooper prepared and audited the financial statements for United Fire Technology ("UFT"), for the years ended December 31, 1993 and December 31, 1994 (the "Financial Statements").

D. On or about June 15, 1997, the Commission filed a complaint against Hooper and others in a civil injunctive action brought in the United States District Court for the Western District of Washington, U.S. Securities and Exchange Commission v. United Fire Technology, Inc., et al. No. C97-1151R (the "Complaint"). On August 31, 1999, the Court entered a Final Judgment of Permanent Injunctive and Other Relief by Consent Against Michael Hooper ("Judgment"). The Judgment permanently enjoins Hooper from violating Section 17(a) of the Securities Act of 1933 ("Securities Act") and Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder. Hooper consented to the Judgment without admitting or denying the allegations in the Complaint.

E. The Complaint alleges, among other things, that from approximately February 1995 through December 1995, Hooper made numerous material misrepresentations, and omitted to disclose material facts, about UFT and it sole asset, the "Flamex Products", in UFT's Financial Statements and an audit report. The Financial Statements and the audit report were included in UFT's submission to the National Association of Securities Dealers under Rule 15c2-11 as well as in a descriptive memorandum about UFT distributed to investors.

F. Specifically, the Complaint alleges that the Financial Statements and the audit report contained the following materially false and misleading statements and omissions:

1) The Financial Statements reported that on August 17, 1994, UFT issued 4,608,000 shares of common stock, valued at approximately $46,000, to Pyrotec, Inc. in exchange for the exclusive and irrevocable worldwide manufacturing, distributing, and marketing rights to Pyrotec's fire-retardant and extinguishing products ("License Purchase Agreement"), which UFT reported as its only asset. This statement was false. UFT issued only 200,000 shares of UFT common stock to Pyrotec in connection with the License Purchase Agreement.

2) Generally accepted accounting principles ("GAAP") require that financial statements disclose material related party transactions, including a description of the transaction and the nature of the relationships involved. Statement of Financial Accounting Standards No. 57. These disclosures are required because transactions among related parties are not presumed to be arms-length, and thus involve the potential for self-dealing. The Financial Statements failed to disclose the related party nature of the License Purchase Agreement and of UFT's public relations agreement with WWBM Consultants, Inc. ("WWBM"), an entity controlled by Beverlee Kamerling, who was also the undisclosed control person of UFT.

3) The License Purchase Agreement was a related party transaction because Marvin Beckwith was related to both Pyrotec and UFT. Beckwith was Pyrotec's president in July and August 1994, when the License Purchase Agreement was allegedly negotiated and executed, and Beckwith also served as UFT's president in July and August 1994, and participated in the negotiation of the License Purchase Agreement.

4) In approximately July 1994, WWBM allegedly entered into an agreement with UFT to provide financial public relations for UFT. This was a related party transaction as Kamerling was related to both WWBM and UFT. Kamerling controlled UFT's corporate affairs and operations in July 1994 and Kamerling served as an officer of WWBM in July 1994 and participated in the negotiation of this agreement.

5) Hooper issued an audit report that stated the Financial Statements were prepared in conformity with GAAP and that Hooper's audit had been conducted in accordance with generally accepted auditing standards ("GAAS"). These statements were false. The Financial Statements were not prepared in conformity with GAAP as set forth above. Hooper had not conducted his audit in accordance with GAAS, and Hooper failed to use due care in performing his audit and preparing his audit report. Hooper failed to be independent; he failed to consider UFT's internal control structure; he failed to adequately plan the tests he needed to perform in order to detect material misrepresentations and omissions contained in UFT's Financial Statements; and he failed to obtain sufficient competent evidential matter.

G. The Complaint further alleges that Hooper knew or was reckless in not knowing of the foregoing.


Based on the foregoing, the Commission deems it appropriate and in the public interest to accept the Offer submitted by Hooper and impose the remedial sanctions specified therein.

Accordingly, IT IS HEREBY ORDERED, effective immediately, that:

A. Hooper is denied the privilege of appearing or practicing before the Commission as an accountant.

B. After five years from the date of this Order, Hooper may request that the Commission consider his reinstatement by submitting an application (Attention: Office of the Chief Accountant) to resume appearing or practicing before the Commission as:

1. a preparer or reviewer, or as a person responsible for the preparation or review, of any public company's financial statements that are filed with the Commission. Such an application must satisfy the Commission that Hooper's work in his practice before the Commission will be reviewed either by the independent audit committee of the public company for which he works or in some other acceptable manner, as long as he practices before the Commission in this capacity; and/or

2. an independent accountant. Such an application must satisfy the Commission that:

a. Hooper, or the firm with which he is associated, is a member of the SEC Practice Section of the American Institute of Certified Public Accountants Division for CPA Firms ("SEC Practice Section");

b. Hooper, or the firm, has received an unqualified report relating to his, or the firm's, most recent peer review conducted in accordance with the guidelines adopted by the SEC Practice Section; and

c. As long as Hooper appears or practices before the Commission as an independent accountant he will remain either a member of the SEC Practice Section or associated with a member firm of the SEC Practice Section, and will comply with all applicable SEC Practice Section requirements, including all requirements for periodic peer reviews, concurring partner reviews, and continuing professional education.

C. The Commission's review of an application by Hooper to resume appearing or practicing before the Commission may include consideration of, in addition to the matters referenced above, any other matters relating to Hooper's character, integrity, professional conduct, or qualifications to appear or practice before the Commission.

By the Commission.

Jonathan G. Katz


1 Rule 102(e)(3)(i)(A) provides, in pertinent part, that "the Commission, with due regard to the public interest and without preliminary hearing, may, by order, temporarily suspend from appearing or practicing before it any . . . accountant . . . who has been by name: Permanently enjoined by any court of competent jurisdiction, by reason of his or her misconduct in an action brought by the Commission, from violating or aiding and abetting the violation of any provision of the Federal securities laws or of the rules and regulations thereunder." Rule 102(e)(3)(iv) provides, in pertinent part, that "A person who has consented to the entry of a permanent injunction as described in paragraph (e)(3)(i)(A) of this section without admitting the facts set forth in the complaint shall be presumed for all purposes under this paragraph (e)(3) to have been enjoined by reason of the misconduct alleged in the complaint."

2 The findings herein are made pursuant to Hooper's Offer of Settlement and are not binding on any other person or entity in this or any other proceedings.

3 Hooper's license was non-renewed based on his failure to pay the necessary fee. Hooper's license may be reissued at any time upon his payment of current and past due fees.