UNITED STATES OF AMERICA
|In the Matter of||:|
|: ORDER MAKING FINDINGS AND|
|PEACHTREE STOCK TRANSFER,||: REVOKING REGISTRATION BY DEFAULT|
|and ROBERT J. CRAIN, JR.||: AND CEASE AND DESIST ORDER|
The Securities and Exchange Commission (Commission) initiated this proceeding with an Order Instituting Proceedings (OIP) August 26, 1999. The OIP alleges Respondents were registered as transfer agents under Section 17A(c)(2) of the Securities Exchange Act of 1934 (Exchange Act) and failed to file Part 1 of Form TA-Y2K, due April 30, 1999.
Respondents were served with the OIP on November 5. By the terms of the OIP and Rule 220(b) of the Commission's Rules of Practice, 17 C.F.R. § 201.220(b), Respondents' Answers were due on or before November 26. The Commission has not received Answers, correspondence, or any other pleading from Respondents to date.
On December 10 the Division of Enforcement (Division) filed a Motion for Entry of Default. The Division seeks, pursuant to the Exchange Act, revocation of Respondents' transfer agent registration, a cease and desist order, and a civil penalty of $7,500 against each Respondent.
Pursuant to Rules 155(a)(1) and (2) and 220(f), a respondent who fails to file an answer to the OIP or otherwise to defend the proceeding may be deemed to be in default. The administrative law judge may determine the proceeding against him on consideration of the record, including the OIP, the allegations of which may be deemed to be true. On December 10 Respondents were ordered to show cause, by December 17, 1999, why they should not be held in default and why the sanctions requested by the Division should not be imposed. No response was received from either Respondent.
Each Respondent is in default within the meaning of Rule 155(a). Each failed to answer the OIP and has not otherwise defended the proceeding. See Rules 155(a)(2) and 220(f). Accordingly, the allegations in the OIP are found to be true:
1. Each Respondent is a transfer agent registered with the Commission pursuant to Section 17A(c)(2) of the Exchange Act, and Crain is a principal of Peachtree Stock Transfer (Peachtree).
2. Respondents are transfer agents that, under Exchange Act Rule 17Ad-18(b), were required to file, only, Part I of Form TA-Y2K no later than April 30, 1999. They qualified for the exemption in Exchange Act Rule 17Ad-13(d) from filing Part II.
3. Rule 17Ad-18(a), promulgated under the authority of Section 17(a)(3) of the Exchange Act, requires certain registered transfer agents to file with the Commission two separate reports set forth on Form TA-Y2K regarding their Year 2000 (Y2K) compliance efforts. These transfer agents were required to make a first filing by August 31, 1998, reporting their Y2K readiness as of July 15, 1998, and a second filing by April 30, 1999, addressing their Y2K readiness as of March 15, 1999. Transfer agents were required to file Part I and, if not exempt, Part II, and, with respect to the second filing due April 30, 1999, a report by an independent public accountant.
4. As of June 4, 1999, neither Respondent had filed Part I of Form TA-Y2K with the Commission. On June 7 Commission staff sent Respondents a letter warning that transfer agents who failed to file Form Y2K might be subject to sanctions. The letter gave Respondents a grace period until June 18, but Respondents did not file the form.
Respondents willfully violated Sections 17(a)(3) and 17A(d)(1) of the Exchange Act and Rule 17Ad-18 thereunder. Revocation of Respondents' transfer agent registration will serve the public interest and the protection of investors. A cease and desist order is also appropriate. Additionally, a civil penalty of $7,500 against each Respondent is in the public interest as necessary for the purpose of deterrence.
Accordingly, effective immediately, it is ordered that, pursuant to Sections 17A(c), 21C, and 21B of the Exchange Act:
The transfer agent registrations of Peachtree Stock Transfer and of Robert J. Crain, Jr., effected pursuant to Section 17A(c), are revoked.
Respondent Peachtree and Respondent Crain each cease and desist from committing or causing any violation or future violation of Sections 17(a)(3) and 17A(d)(1) of the Exchange Act and Rule 17Ad-18 thereunder.
Respondent Peachtree and Respondent Crain each pay a civil penalty of $7,500. Payment shall be made by December 30, 1999, by certified check, U.S. Postal money order, bank cashier's check or bank money order payable to the Securities and Exchange Commission. The remittances[s] should identify the Respondent[s] and Administrative Proceeding No. 3-9989 and be delivered to the Comptroller, Securities and Exchange Commission, Operations Center, 6432 General Green Way, Stop 0-3, Alexandria, Virginia 22312. A copy should be sent to the Division at the same address.
Carol Fox Foelak
Administrative Law Judge
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