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U.S. Securities and Exchange Commission

UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION

SECURITIES EXCHANGE ACT OF 1934
Release No. 48331 / August 13, 2003

ADMINISTRATIVE PROCEEDING
File No. 3-11215


In the Matter of

Kevin Kirkpatrick,

Respondent.


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ORDER INSTITUTING ADMINISTRATIVE PROCEEDINGS PURSUANT TO SECTION 15(b) OF THE SECURITIES EXCHANGE ACT OF 1934, MAKING FINDINGS, AND IMPOSING REMEDIAL SANCTIONS

I.

The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest that public administrative proceedings be, and hereby are, instituted pursuant to Section 15(b) of the Securities Exchange Act of 1934 ("Exchange Act") against Kevin Kirkpatrick ("Respondent" or "Kirkpatrick").

II.

In anticipation of the institution of these 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 to which the Commission is a party, and without admitting or denying the findings herein, except as to the Commission's jurisdiction over him and the subject matter of these proceedings, and the findings contained in Sections III.3 and III.7 below, which are admitted, Respondent consents to the entry of this Order Instituting Administrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934, Making Findings, and Imposing Remedial Sanctions ("Order"), as set forth below.

III.

On the basis of this Order and Respondent's Offer, the Commission finds that:

1. From at least January 1998 through December 2000, Kirkpatrick, 42, was a registered representative, trader and market maker associated with a registered broker-dealer called Olsen Payne and Company, which is located in Salt Lake City, Utah.

2. On January 14, 2002, the Commission filed a Complaint in the United States District Court for the Southern District of New York, in an action captioned Securities and Exchange Commission v. Max Tanner, et al., Civil Action Number 02 CV 0306, charging Kirkpatrick with violations of Section 17(a) of the Securities Act of 1933 ("Securities Act") and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder.

3. On January 23, 2003, Kirkpatrick was permanently enjoined, on consent, by the United States District Court for the Southern District of New York in SEC v. Max Tanner, et al., from violating Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, in connection with trading the stock of Maid Aide, Inc. during 1998.

4. The Commission subsequently moved for summary judgment against Kirkpatrick with respect to its requested monetary relief sought in SEC v. Max Tanner, et al., and on July 2, 2003, the Court entered Summary Judgment against Kirkpatrick. The Court found that, "from March through at least December 1998, Kirkpatrick and his co-defendants engaged in a scheme to manipulate the price of Maid Aide, Inc. ("MDAN") stock. This tripartite scheme involved the defendants, including Kirkpatrick: (1) gaining control of the market supply of MDAN stock; (2) creating an artificial public demand for the stock through a boiler room operation; and (3) creating an appearance of actual market activity and controlling trading of MDAN stock through Kirkpatrick . . . ." The Court ordered Kirkpatrick to pay $92,000 in disgorgement, $33,173.81 in prejudgment interest, and a $75,000 civil penalty.

5. On September 30, 2002, the Commission filed a Complaint in the United States District Court for the District of Utah, in an action captioned Securities and Exchange Commission v. Allen Wolfson, et al., Civil Action Number 2:02 CV 1086, charging Kirkpatrick with violations of Sections 5(a), 5(c) and 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder.

6. The Commission's Complaint alleged that, in connection with the purchase and sale of the securities of Freedom Surf, Inc. ("Freedom Surf"), Kirkpatrick, in concert with one or more co-defendants, advanced the bid quotation of Freedom Surf stock without relation to genuine market demand or worth of the company, and engaged in a series of public market purchases and sales among controlled accounts. This was done to artificially increase the stock price of Freedom Surf securities. This conduct operated as a fraud and deceit on investors. The Complaint also alleged that Kirkpatrick sold unregistered securities.

7. On July 9, 2003, a final judgment was entered by consent against Kirkpatrick, permanently enjoining him from, directly or indirectly, violating Sections 5(a), 5(c), and 17(a) of the Securities Act, Section 10(b) of the Exchange Act and Rule 10b-5 thereunder.

IV.

In view of the foregoing, the Commission deems it appropriate and in the public interest to impose the sanctions specified in Respondent Kirkpatrick's Offer.

Accordingly, IT IS HEREBY ORDERED:

Pursuant to Section 15(b)(6) of the Exchange Act, that Respondent Kirkpatrick 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
Secretary

 

http://www.sec.gov/litigation/admin/34-48331.htm


Modified: 08/13/2003