SECURITIES EXCHANGE ACT OF 1934
Release No. 44015 / February 28, 2001
ADMINISTRATIVE PROCEEDING
File No. 3-10429
In the Matter of William H. Channell, Jr., Respondent. |
: |
ORDER INSTITUTING CEASE-
|
I.
The Commission deems it appropriate that public administrative proceedings be, and they hereby are, instituted pursuant to Section 21C of the Securities Exchange Act of 1934 ("Exchange Act") to determine whether William H. Channell, Jr. ("Channell") violated Sections 13(g) and 16(a) of the Exchange Act and Rules 13d-1, 13d-2, 16a-2 and 16a-3 promulgated thereunder.
II.
In anticipation of the institution of these administrative proceedings, Channell ("the Respondent") has submitted an Offer of Settlement which the Commission has determined to accept. Solely for the purpose of these proceedings and any other proceeding brought by or on behalf of the Commission or to which the Commission is a party, the Respondent, without admitting or denying the matters set forth herein, consents to the issuance of this Order Instituting Cease-and-Desist Proceedings Pursuant to Section 21C of the Securities Exchange Act of 1934 and Findings and Order of the Commission ("the Order"), and to the entry of the findings, and imposition of the remedial sanctions set forth below.
III.
On the basis of this Order and the Respondent's Offer of Settlement ("Offer"), the Commission finds the following:
A. FACTS
1. Respondent
William H. Channell, Jr., age 42, has been President and Chief Operating Officer of Channell Commercial Corp. ("Channell Commercial") since its Initial Public Offering in June 1996. He has been a Director of Channell Commercial since 1984. Channell is and has been at relevant times a beneficial owner of more than ten percent of the equity securities of Channell Commercial.
2. ISSUER
Channell Commercial Corp., a Delaware corporation with principal offices in Temecula, California, is a designer and manufacturer of telecommunications equipment supplied to telephone, cable television and power utility network providers worldwide. According to Channell Commercial's Annual Report on Form 10-K for the year ended December 31, 1999, Channell Commercial had total assets of over $114.5 million and shareholders' equity of over $62 million as of December 31, 1999. Channell Commercial had 9,076,392 shares of common stock outstanding as of March 1, 2000. Channell Commercial reported net income of approximately $9.3 million, or $1.03 per common share, for its 1999 fiscal year. Channell Commercial's common stock is registered with the Commission pursuant to Section 12(g) of the Exchange Act, and is listed on the NASDAQ National Market System.
B. APPLICABLE LAW
Section 13(g) of the Exchange Act and Rule 13d-1(c) thereunder, in relevant part, require any person who, as of December 31, 1978 or as of the end of any calendar year thereafter, beneficially owns more than 5 percent of any equity security of a company registered pursuant to Section 12 of the Exchange Act, and who is not otherwise required to file a Schedule 13D, to file a Schedule 13G with the Commission within 45 days of the end of the calendar year in which the obligation arises. Rule 13d-2(b) provides that yearly amendments shall be filed to Schedule 13G reporting changes in the information previously reported.
Section 16(a) of the Exchange Act requires that beneficial owners of more than ten percent of any class of any equity security registered pursuant to Section 12 of the Exchange Act and the officers and directors of the issuer of any such security (hereinafter "insider") file a statement with the Commission by the effective date of a registration statement filed pursuant to Section 12 of the Exchange Act, or within ten days of becoming such officer, director or beneficial owner, reporting the amount of all equity securities of such issuer of which they are a beneficial owner. Section 16(a) also requires an insider to file with the Commission within ten days after the close of each calendar month, if there has been a change in the insider's ownership of the issuer's equity securities during such month, a statement indicating such changes. The rules enacted pursuant to Section 16(a) provide that an initial statement by an insider is to be made on a Form 3 and subsequent statements of changes in beneficial ownership are to be made on a Form 4 or a Form 5.
C. CHANNELL'S VIOLATIONS OF SECTIONS 13(g) and 16(a) OF THE EXCHANGE ACT AND THE RULES THEREUNDER
In connection with changes in his ownership of Channell Commercial securities, Channell failed to timely file a Schedule 13G for more than three years and ten months, and failed to timely file three amendments to Schedule 13G, resulting in delinquencies of more than eleven months to two years and eleven months. In addition, Channell failed to timely file a Form 3, failed to timely file thirteen Forms 4 (with delinquency periods ranging from one week to more than seven months), and three Forms 5, resulting in delinquencies of more than one month to one year and ten months. The total value of the transactions in Channell Commercial stock for which Channell filed late Forms 4 and 5 is approximately $4.3 million.
Channell's history of delinquency, compiled from the ownership reports he has filed with the Commission for Channell Commercial, is set forth below:
WILLIAM H. CHANNELL, JR.
Forms 3, 4 and 5 For Holdings and
Transactions in the Equity Securities of
Channell Commercial Corp.
June 27, 1996 through February 5, 2001
| Month
of Trans. |
Type | No. of
Shares |
Price
Per Share* |
Total
$Value |
Date
Due/ Date Rec'd |
Apprx.
Yrs/Mos/ Wks.Late |
| Form 3 | ||||||
| 06-96 | 1,534,250 (c/s) | 06-27-96 | 1w | |||
| 100,000 (opts) | 07-09-96 | |||||
| Forms 4, 5 | ||||||
| 07-97 | Sale | 10,000 | 15.50 | 155,000 | 08-11-97 | 7m2w |
| 5,000 | 14.75 | 73,750 | 03-31-98 | |||
| 228,750 | ||||||
| 07-97 | Opt | 50,000 | 13.25 | 662,500 | 02-17-98 | 1m2w |
| Grant | 03-31-98 | |||||
| FY-97 | Form 5 | 02-17-98 | 1m2w | |||
| 03-31-981 | ||||||
| 07-98 | Sale | 30,000 | 11.06 | 331,800 | 08-10-98 | 3w |
| 08-31-98 | ||||||
| 09-98 | Opt | 25,000 | 8.81 | 220,250 | 02-16-99 | 1y10m |
| Grant | 12-22-00 | |||||
| FY-98 | Form 5 | 02-16-99 | 1y10m | |||
| 12-22-00 | ||||||
| 08-99 | Opt | 50,000 | 10.75 | 537,500 | 02-14-00 | T |
| Grant | 02-18-00 | |||||
| 11-99 | Sale | 20,000 | 10.37 | 207,400 | 12-10-99 | 6m |
| 5,000 | 11.69 | 58,450 | 06-07-00 | |||
| 5,000 | 11.63 | 58,150 | ||||
| 5,000 | 11.56 | 57,800 | ||||
| 381,800 | ||||||
| 12-99 | Sale | 2,500 | 12.24 | 30,600 | 01-10-00 | 5m |
| 1,500 | 11.77 | 17,655 | 06-07-00 | |||
| 1,000 | 11.38 | 11,380 | ||||
| 7,000 | 11.00 | 77,000 | ||||
| 3,000 | 11.00 | 33,000 | ||||
| 169,635 | ||||||
| FY-99 | Form 5 | 02-14-00 | 3m3w | |||
| 06-07-001 | ||||||
| 01-00 | Sale | 7,000 | 10.63 | 74,410 | 02-10-00 | 4m |
| 13,000 | 10.48 | 136,240 | 06-07-00 | |||
| 5,000 | 11.75 | 58,750 | ||||
| 269,400 | ||||||
| 02-00 | Sale | 10,000 | 12.94 | 129,400 | 03-10-00 | 3m |
| 5,000 | 13.94 | 69,700 | 06-07-00 | |||
| 3,000 | 14.25 | 42,750 | ||||
| 3,500 | 13.75 | 48,125 | ||||
| 3,500 | 13.75 | 48,125 | ||||
| 338,100 | ||||||
| 03-00 | Sale | 9,000 | 18.26 | 164,340 | 04-10-00 | 2m |
| 4,200 | 16.00 | 67,200 | 06-07-00 | |||
| 1,000 | 14.81 | 14,810 | ||||
| 8,900 | 14.75 | 131,275 | ||||
| 1,500 | 14.69 | 22,035 | ||||
| 5,000 | 14.50 | 72,500 | ||||
| 9,500 | 13.94 | 132,430 | ||||
| 6,000 | 14.69 | 88,140 | ||||
| 6,250 | 14.53 | 90,813 | ||||
| 783,543 | ||||||
| 04-00 | Sale | 700 | 13.50 | 9,450 | 05-10-00 | 1m |
| 2,500 | 9.56 | 23,900 | 06-07-00 | |||
| 1,100 | 13.05 | 14,355 | ||||
| 1,200 | 13.00 | 15,600 | ||||
| 3,150 | 12.04 | 37,926 | ||||
| 101,231 | ||||||
| 05-00 | Sale | 5,700 | 11.03 | 62,871 | 06-12-00 | 2m2w |
| 4,300 | 10.25 | 44,075 | 09-01-00 | |||
| 106,946 | ||||||
| 06-00 | Sale | 15,000 | 12.38 | 185,700 | 07-10-00 | 1m3w |
| 09-01-00 | ||||||
| 08-00 | Sale | 15,000 | 13.31 | 199,650 | 09-11-00 | 3w |
| 10-03-00 | ||||||
| 08-00 | Sale | 10,000 | 13.50 | 135,000 | 09-11-00 | 3m1w |
| 12-22-00 | ||||||
| 09-00 | Sale | 10,000 | 13.75 | 137,500 | 10-10-00 | 2m1w |
| 12-22-00 | ||||||
| 11-00 | Sale | 2,800 | 8.00 | 22,400 | 12-11-00 | 1w |
| 1,400 | 7.50 | 10,500 | 12-22-00 | |||
| 2,220 | 7.26 | 16,117 | ||||
| 49,017 | ||||||
| 12-00 | Sale | 6,400 | 7.25 | 46,400 | 01-10-01 | T |
| 5,000 | 7.25 | 36,250 | 01-08-01 | |||
| 5,000 | 7.25 | 36,250 | ||||
| 7,200 | 7.25 | 52,200 | ||||
| 400 | 7.06 | 2,824 | ||||
| 01-01 | Sale | 900 | 7.06 | 6,354 | 02-12-01 | T |
| 2,100 | 7.06 | 14,826 | 02-05-01 | |||
| 1,900 | 7.06 | 13,414 | ||||
| 3,600 | 7.06 | 25,416 | ||||
| 1,500 | 7.06 | 10,590 | ||||
| 6,000 | 7.06 42,360 | |||||
| 11,000 | 7.06 | 77,660 | ||||
| ______________________ | ||||||
| Total value late
reported transactions: |
$ 4,300,822 | |||||
| 1 | Date received reflects report on Form 4 reporting transactions in lieu of Form 5. | |||||
| * | = | Price per share rounded off | ||||
| c/s | = | common stock | ||||
| T | = | Timely | ||||
| Opt | = | Option | ||||
WILLIAM H. CHANNELL, JR.
Schedules 13G and Amendments
Channell Commercial Corp.
February 14, 1997 through January 22, 2001
| Date
of Trans. |
Type | No. of
Shares |
Event
Triggering Amendment |
Date
Due/ Date Rec'd |
Apprx.
Yrs/Mos/ Wks.Late | |
| 1996 | 13G | 1,461,184 | 02-14-97 | 3y10m2w | ||
| 12-28-00 | ||||||
| 1997 | 13G Amendment | Change | 02-17-98* | 2y11m | ||
| Item 4 | 01-22-01 | |||||
| 1998 | 13G Amendment | " | 02-16-99 | 1y11m | ||
| 01-22-01 | ||||||
| 1999 | 13G Amendment | " | 02-14-00 | 11m1w | ||
| 01-22-01 | ||||||
| 2000 | 13G Amendment | " | 02-14-01 | T | ||
| 01-22-01 | ||||||
| ___________________ | ||||||
| * | = | For the purpose of this table, the date due for amendments reflects the date the obligation to file the amendment arose. | ||||
IV.
FINDINGS
Based on the above, the Commission finds that Channell violated Sections 13(g) and 16(a) of the Exchange Act, Rules 13d-1, 13d-2, 16a-2 and 16a-3 promulgated thereunder.
V.
OFFER OF SETTLEMENT
Channell has submitted an Offer of Settlement in this proceeding which the Commission has determined to accept. Channell, in his Offer, consents to this Order making findings, as set forth above, and ordering him to cease and desist from committing or causing any violations of, and committing or causing any future violations of, Sections 13(g) and 16(a) of the Exchange Act and Rules 13d-1, 13d-2, 16a-2 and 16a-3 promulgated thereunder.
VI.
ORDER
Accordingly, IT IS HEREBY ORDERED, pursuant to Section 21C of the Exchange Act, that Channell cease and desist from committing or causing any violations of, and committing or causing any future violations of, Sections 13(g) and 16(a) of the Exchange Act and Rules 13d-1, 13d-2, 16a-2 and 16a-3 promulgated thereunder.
By the Commission.
Jonathan G. Katz
Secretary