UNITED STATES OF AMERICA
SECURITIES AND EXCHANGE COMMISSION
SECURITIES EXCHANGE ACT OF 1934
Release No. 46836 / November 14, 2002
File No. 3-10934
In the Matter of
| ORDER INSTITUTING PROCEEDINGS
PURSUANT TO SECTION 15(b) OF
THE SECURITIES EXCHANGE ACT OF
1934, MAKING FINDINGS AND IMPOSING REMEDIAL SANCTIONS|
The Commission deems it appropriate and in the public interest that administrative proceedings be instituted pursuant to Section 15(b) of the Securities Exchange Act of 1934 ("Exchange Act") with respect to James Silver ("Silver").
In anticipation of these proceedings, Silver has submitted an Offer of Settlement ("Offer") which the Commission has determined to accept. In his Offer, Silver admits the jurisdiction of the Commission over him and the subject matter of the administrative proceedings to be instituted against him. Solely for the purpose of these proceedings and any other proceedings brought by or on behalf of the Commission or to which the Commission is a party, and without admitting or denying the findings contained herein, except the findings in paragraphs III. A. and E. below, which he admits, Silver consents to the entry of this Order Instituting Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934, Making Findings and Imposing Remedial Sanctions ("Order").
Accordingly, IT IS ORDERED that the proceedings pursuant to Section 15(b) of the Exchange Act be, and they hereby are, instituted.
On the basis of this Order and the Offer, the Commission finds that:
- On January 7, 2000, the Commission filed a Complaint ("Complaint") against Silver, among others, in SEC v. Petro Resources Corp., et al., Civil Action No. SA CV 00-17 AHS (EEX) (C.D. Cal.). The complaint alleges that Silver violated Section 17(a) of the Securities Act of 1933 ("Securities Act"), Sections 10(b) and 15(a) of the Exchange Act, and Rule 10b-5 thereunder.
- The Complaint alleges that during 1995 and 1996, Silver was a supervisor and salesman at ITS Consulting, Inc. ("ITS"), a telemarketing operation in Newport Beach, California that offered and sold securities to the public in the form of fractional interests in oil and gas drilling programs.
- The Complaint further alleges that, while such sales of securities were ongoing, neither Silver nor ITS was registered with the Commission as a broker or dealer, and the securities were not registered with the Commission or exempt from registration.
- The Complaint further alleges that, in connection with the offer and sale of the securities, Silver and persons subject to his supervision misrepresented material facts and made statements that omitted material facts necessary to make the statements made, in the light of the circumstances under which they were made, not misleading to investors or prospective investors. The false and misleading statements and omissions concerned, among other things: commissions that would be paid to salespersons of the securities and to control persons of ITS; risks and potential returns of the oil and gas drilling programs; backgrounds and experience of operators of the programs; uses of investor proceeds; characteristics of the oil and gas leases and the proposed wells involved in the programs; tax benefits available to investors in the programs; success of prior programs and of initial drilling efforts; and the existence of state regulatory action against the programs.
- On October 31, 2002, the United States District Court for the Central District of California issued a final judgment against Silver permanently enjoining him from further violations of Section 17(a) of the Securities Act, Sections 10(b) and 15(a) of the Exchange Act, and Rule 10b-5 thereunder. Silver consented to the entry of the injunctive order without admitting or denying any of the allegations of the Complaint.
In view of the foregoing, the Commission deems it appropriate and in the public interest to impose the sanctions specified in the Offer submitted by Silver. Accordingly, IT IS ORDERED that Silver, be and hereby is, barred from association with any broker or dealer.
For the Commission, by its Secretary, pursuant to delegated authority.
Jonathan G. Katz