UNITED STATES OF AMERICA
In the Matter of
Lone Star Transfer, Inc.
|ORDER INSTITUTING ADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS PURSUANT TO SECTION 21C OF THE SECURITIES EXCHANGE ACT OF 1934, MAKING FINDINGS, AND IMPOSING REMEDIAL SANCTIONS|
The Securities and Exchange Commission ("the Commission") deems it appropriate and in the public interest that public administrative and cease-and-desist proceedings be, and hereby are, instituted pursuant to Section 21C of the Securities Exchange Act of 1934 ("the Exchange Act") against Lone Star Transfer, Inc. ("Lone Star") and Stanley P. Eisenberg ("Eisenberg") (collectively, "Respondents").
In anticipation of the institution of these proceedings, Respondents have submitted an Offer of Settlement ("Offer") to the Commission, 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 contained in this Order, except those contained in paragraph II.A below and the jurisdiction of the Commission over Respondents and the subject matter of these proceedings, Respondents consent to the issuance of this Order Instituting Administrative and Cease-and-Desist Proceedings Pursuant to Section 21C of the Securities Exchange Act of 1934, Making Findings, and Imposing Remedial Sanctions ("the Order"), and to the entry of the findings set forth below.1
On the basis of this Order and the Offer submitted by Lone Star and Eisenberg, the Commission finds that:
A. Lone Star, a Texas corporation located in Houston, Texas, has been registered as a transfer agent with the Commission since December 30, 1999, pursuant to Section 17A(c)(1) of the Exchange Act. Eisenberg, 46, of Houston, Texas, is Lone Star's president and sole director and has been since the firm's inception.
B. Eisenberg registered Lone Star with the Commission as a transfer agent at the request of Mark E. Rice, 41, a Texas resident. Rice exercised sole control over the activities of Lone Star, which only performed transfer agent functions for an entity controlled by Rice.2 Lone Star is now inactive.
C. Section 17A(d)(1) of the Exchange Act prohibits registered transfer agents from engaging in any activities which are in contravention of regulations promulgated by the Commission in the public interest or for the protection of investors or to further the purposes of the Exchange Act. Section 17(a)(3) of the Exchange Act requires registered transfer agents to make and keep any records and reports required by Section 17A of the Exchange Act and the rules thereunder. Section 17A(c)(2) of the Exchange Act, and Rule 17Ac2-1 thereunder, requires that a transfer agent seeking registration complete and file a Form TA-1. Form TA-1 requires the registrant, among other things, to disclose and identify any control persons. Rule 17Ac2-2 requires that registered transfer agents file an annual report on Form TA-2 within ninety (90) days of the calendar year end.
D. Lone Star willfully violated Sections 17(a)(3), 17A(d)(1), and 17A(c) of the Exchange Act and Rules 17Ac2-1 and 17Ac2-2 thereunder, and Eisenberg willfully aided and abetted and caused Lone Star's violations. Specifically:
1. Eisenberg signed a Form TA-1 to register Lone Star with the Commission as a transfer agent, which falsely identified Eisenberg as the control person and failed to reveal that Rice controlled Lone Star; and
2. Eisenberg failed to cause Lone Star to file an annual report on Form TA-2 for the year ending December 31, 2000.
In view of the foregoing, the Commission deems it appropriate and in the public interest to accept the Offer submitted by Respondents and to impose the sanctions specified therein.
Accordingly, effective immediately, IT IS ORDERED that:
A. Pursuant to Section 17A(c) of the Exchange Act, the transfer agent registration of Lone Star is REVOKED.
B. Pursuant to Section 17A(c) of the Exchange Act, Eisenberg be, and hereby is, BARRED from association with any transfer agent.
C. Pursuant to Section 21C of the Exchange Act, Eisenberg CEASE AND DESIST from causing any violation and any future violation of Sections 17(a)(3), 17A(c) and 17A(d)(1) of the Exchange Act and Rules 17Ac2-1 and 17Ac2-2 thereunder.
D. Pursuant to Section 21B of the Exchange Act, Respondents shall pay a civil penalty in the aggregate amount of $10,000 to the United States Treasury. Respondents shall pay $5,000 of the penalty within thirty (30) days of the entry of this Order, and shall make five (5) $1,000 payments by the first of each subsequent month until the $10,000 penalty is satisfied. Each such 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, Securities and Exchange Commission, Operations Center, 6432 General Green Way, Stop 0-3, Alexandria, VA 22312; and (4) submitted under cover letter that identifies Lone Star Transfer, Inc. and Stanley P. Eisenberg as Respondents in these proceedings, the file number of these proceedings, a copy of which cover letter and money order or check shall be sent to Harold F. Degenhardt, District Administrator, Fort Worth District Office, 801 Cherry Street, 19th Floor, Fort Worth, TX 76102.
By the Commission.
Jonathan G. Katz
|1||The findings herein are to be made pursuant to Respondents' Offer of Settlement and are not binding on any other person or entity in this or any other proceeding.|
|2||Rice is the subject of an injunctive action brought by the Commission alleging violations of the registration and anti-fraud provisions of federal securities laws. See SEC v. Rice, et al [CA No. 4:02CV00636, U.S.Dist.Ct. S.D. Tex. (Feb. 20, 2002)]; SEC Lit. Rel. No. 17377 (Feb. 25, 2002).|
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