UNITED STATES SECURITIES AND EXCHANGE COMMISSION
SECURITIES EXCHANGE ACT
THE COMMISSION INSTITUTES PUBLIC CEASE-AND-DESIST PROCEEDINGS AGAINST UNITED STOCK TRANSFER, INC. AND JOHN J. DONNELLY FOR REPEATED FAILURE TO COMPLY WITH THE TRANSFER AGENT RULES
The Commission today instituted a public cease-and-desist proceeding against United Stock Transfer, Inc. ("United"), a registered transfer agent in Englewood, Colorado, and its president, John J. Donnelly ("Donnelly"), a resident of Highlands Ranch, Colorado. The Division of Enforcement alleges that from November 1991 through May 2000, United repeatedly violated various rules applicable to transfer agents. The Division also alleges that, among other violations, United failed to: (i) turnaround items presented for transfer in a timely manner; (ii) maintain proper records relating to letters of appointment, routine items presented for transfer, non-routine items and turnaround time; and (iii) maintain a proper control book for each issuer and keep each issue in balance. The Division also contends that Donnelly willfully aided and abetted United in these and other violations.
The Commission instituted cease-and-desist proceedings against United and Donnelly (collectively "Respondents") to determine whether: (i) the allegations against Respondents are true and to afford Respondents an opportunity to establish any defense to such allegations; (ii) any remedial action is appropriate in the public interest against Respondents pursuant to Section 17A(c)(3) and 17A(c)(4) of the Exchange Act; (iii) pursuant to Section 21C of the Exchange Act, Respondents should be ordered to cease and desist from committing or causing any violations and any future violations of Sections 17(a)(3), 17A(d)(1) and 17(f)(2) of the Exchange Act and Rules 17Ac2-1, 17Ac2-2, 17Ad-2, 17Ad-5, 17Ad-6, 17Ad-7, 17Ad-10, 17Ad-13, 17Ad-15, 17Ad-16, 17Ad-17 and 17f-2 thereunder; and (iv) civil penalties should be ordered against Respondents pursuant to Section 21B of the Exchange Act.
A hearing before an administrative law judge will be scheduled to determine whether the allegations in the Order are true and to determine what remedial action, if any, is appropriate in the public interest and for the protection of investors.