Securities Exchange Act of 1934
Release No. 48741 / November 3, 2003
Administrative Proceedings
File No. 3-11327
In the Matter of B. ROLAND FRASIER, III, Respondent. |
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ORDER INSTITUTING PUBLIC ADMINISTRATIVE PROCEEDINGS PURSUANT TO RULE 102(e) OF THE COMMISSION'S RULES OF PRACTICE, 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 against B. Roland Frasier, III, Attorney ("Respondent" or "Frasier") pursuant to Rule 102(e)(3) of the Commission's Rules of Practice.
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 as to the Judgment of Permanent Injunction and Other Relief ("Final Judgment") as set forth in paragraph III.C. below, Respondent consents to the entry of this Order Instituting Public Administrative Proceedings Pursuant to Rule 102(e) of the Commission's Rules of Practice, 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:
A. Frasier is an attorney who has been licensed to practice law in the state of California since June 1990. Frasier was formerly a partner in a law firm in San Diego, California specializing in "offshore asset protection." Frasier served as counsel to Zandria Corp., a Nevada corporation located in San Diego, California, and to entitites and individuals associated with Zandria.
B. On October 2, 2003, the Commission filed a complaint in the United States District Court for the Southern District of California against Richard A. May and Frasier, captioned SEC v. B. Roland Frasier, III and Richard A. May, Case No. 03-CV 1958 BTM (JFS). The Complaint charged defendant Frasier with engaging in fraud in violation of Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder. The Commission's Complaint alleged, among other things, that from approximately October 1999 through November 2000, Frasier orchestrated and implemented a scheme to manipulate the market in Zandria common stock. According to the Complaint, Frasier effectuated a series of transactions wherein more than 90 percent of all of the free-trading shares of Zandria were transferred to four offshore corporations secretly controlled by Frasier and two affiliated stock promoters. The Commission's Complaint further alleged that Frasier arranged for Zandria to become a public company through an asset acquisition transaction with a public corporation and fraudulently pocketed $100,000 in that transaction. Zandria began trading on the over-the-counter ("OTC") bulletin board in April 2000. Between April 2000 and November 2000, the Complaint alleged that the two stock promoters working with Frasier paid a network of telemarketers 10 to 30 percent kickbacks to induce investors to buy Zandria on the OTC bulletin board while simultaneously selling $1 million in Zandria stock they controlled into the inflated market. The Complaint alleged that Frasier and the two stock promoters then divided the proceeds from their fraudulent sale of Zandria stock on the OTC bulletin board, with Frasier receiving approximately $180,000.
C. Frasier consented to the entry of a Final Judgment without admitting or denying the allegations of the complaint, except subject matter jurisdiction which Frasier admitted. On October 20, 2003, the United States District Court for the Southern District of California entered the Final Judgment permanently enjoining Frasier from future violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder; barring him from participating in any penny stock offering; ordering him to pay $280,000 disgorgement plus $65,898.43 in prejudgment interest; and imposing a $110,000 civil money penalty.
IV.
In view of the foregoing, the Commission deems it appropriate and in the public interest to impose the sanctions agreed to in Respondent Frasier's Offer.
Accordingly, IT IS HEREBY ORDERED, effective immediately, that:
Frasier is suspended from appearing or practicing before the Commission as an attorney.
By the Commission.
Secretary