UNITED STATES OF AMERICA
In the Matter of
JAMES W. SPRATT III,
|ORDER INSTITUTING PUBLIC ADMINISTRATIVE PROCEEDINGS PURSUANT TO SECTION 15(b)(6) OF THE SECURITIES EXCHANGE ACT OF 1934, MAKING FINDINGS AND IMPOSING REMEDIAL SANCTIONS|
The Securities and Exchange Commission ("Commission") deems it appropriate in the public interest that a public administrative proceeding be, and hereby is, instituted pursuant to Section 15(b)(6) of the Securities Exchange Act of 1934 ("Exchange Act") against Respondent James W. Spratt III.
In anticipation of the institution of these administrative proceedings, Respondent has submitted an Offer of Settlement (the "Offer") 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, except as to jurisdiction over him and the subject matter of these proceedings and as to paragraph III.A. below, which Respondent admits, Respondent consents to the entry of this Order Instituting Public Administrative Proceedings Pursuant to Section 15(b)(6) of the Securities Exchange Act of 1934, Making Findings and Imposing Remedial Sanctions (the "Order").
On the basis of this Order and the Respondent's Offer, the Commission makes the following findings:
A. On December 31, 2001, by Respondent's consent, in which he neither admitted nor denied any of the allegations of the complaint, except as to jurisdiction which he admitted, the United States District Court for the Middle District of Florida, in an action styled, S.E.C. v. Corporate Relations Group, Inc., et al., C.A. No. 6:99-cv-1222-Orl-28A (filed Sept. 27, 1999), entered a Final Judgment that permanently enjoined Respondent from violating Sections 5(a), 5(c), 17(a) and 17(b) of the Securities Act of 1933, Sections 10(b) and 15(a)(1) of the Exchange Act and Rule 10b-5 promulgated thereunder; directed him to pay disgorgement and prejudgment interest in the total amount of $629,000; and directed him to pay a civil penalty of $125,000.
B. During the relevant time, Respondent was an employee of Corporate Relations Group, Inc. ("CRG"), a public relations firm located in Winter Park, Florida.
C. The Commission's complaint in the injunctive action alleged, among other things, that from at least September 1994 through December 1996, Respondent participated in a fraudulent scheme in which CRG acquired control of large blocks of securities from at least 15 small public companies either for free or at a steep discount, touted these securities to the public, and then sold the securities while promoting them.
D. The securities of several of the companies discussed in the complaint constituted penny stocks within the meaning of Section 3(a)(51) of the Exchange Act and Rule 3a51-1 thereunder.
E. By engaging in the conduct described above, Respondent participated in offerings of penny stocks within the meaning of Section 15(b)(6) of the Exchange Act.
Based on the foregoing, the Commission deems it appropriate in the public interest to accept the Respondent's Offer and to impose the remedial relief specified in the Offer.
Accordingly, IT IS ORDERED, that Respondent James W. Spratt III be, and hereby is, barred from participating in an offering of penny stock, including: acting as a promoter, finder, consultant, agent, or other person who engages in activities with a broker, dealer or issuer for purposes of the issuance or trading in any penny stock; or inducing or attempting to induce the purchase or sale of any penny stock.
By the Commission.
Jonathan G. Katz
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