UNITED STATES OF AMERICA
| ORDER INSTITUTING 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 that public administrative proceedings be and hereby are instituted pursuant to Section 15(b)(6) of the Securities Exchange Act of 1934 ("Exchange Act"), against Robert Douglas Williams ("Williams").
In anticipation of the institution of these proceedings, Williams has submitted an Offer of Settlement to the Commission which the Commission has determined to accept. Solely for the purposes of these proceedings and any other proceedings brought by or on behalf of the Commission or in which the Commission is a party, prior to a hearing pursuant to the Commission's Rules of Practice, 17 C.F.R. § 201.100 et seq., and, without admitting or denying the findings contained herein, except as to entry of the injunction described below and the Commission's jurisdiction over him and over the subject matter of this proceeding, which are admitted, Williams consents to the institution of public administrative proceedings, and the findings and remedial sanctions set forth below.
On the basis of this Order and the Offer of Settlement submitted by Williams, the Commission finds that:
A. From approximately April 1999 until April 2001, Williams was acting as an unregistered broker-dealer.
B. On July 17, 2003, Williams was permanently enjoined from violations of Sections 5(a), 5(c) and Sections 17(a) of the Securities Act of 1933 ("Securities Act") and Sections 10(b) and 15(a) of the Exchange Act and Rule 10b-5 promulgated thereunder, by the United States District Court for the Southern District of Texas (Houston Division) [SEC v. First Americap, et al., H-01-1153]. Williams consented to the entry of the permanent injunction without admitting or denying any violation of the federal securities laws, as alleged in the Commission's Complaint.
C. The Commission's Complaint in SEC v. First Americap, et al. alleges that from at least April 1999 through at least April 2001, when the Complaint was filed, Williams and other defendants participated in the fraudulent sale of so-called "pre-IPO" stock in at least two different issuers, Cyrus Industries, Inc. ("Cyrus") and ByteAudio.com ("Byte"). The Complaint charges that Williams, as a principal of First Americap Corp. and Capital Relations Group, LLC, supervised the sales effort in which First Americap and Capital Relations cold-called investors and made false and misleading claims about, among other things, impending IPOs for the two issuers. According to the Complaint, many of the thousands of investors pitched by First Americap and Capital Relations were led to believe that their pre-IPO stock would substantially increase in value after the imminent IPO. Cyrus Investors were additionally promised that they would receive a full refund of their investment if Cyrus did not conduct an IPO. In reality, the Complaint alleged, neither Cyrus nor Byte conducted an IPO and investors stood to lose millions of dollars, while First Americap and Capital Relations reaped approximately $1 million in commissions from selling the stock. The Complaint states that First Americap and Capital Relations, under Williams's direction, and separate sales forces of Cyrus and Byte raised over $8 million from approximately 1400 investors. The Complaint also alleges that Williams, in the course of marketing the stock of Cyrus and Byte, acted as an unregistered broker-dealer.
In view of the foregoing, the Commission deems it appropriate to accept the Offer of Settlement of Robert Douglas Williams.
Accordingly, IT IS ORDERED that Respondent Robert Douglas Williams be, and hereby is, barred from association with any broker or dealer.By the Commission.
Jonathan G. Katz
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