SECURITIES EXCHANGE ACT OF 1934
Release No. 50257 / August 25, 2004
ADMINISTRATIVE PROCEEDING
File No. 3-11607
In the Matter of David L. Knudson, 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 David L. Knudson ("Respondent" or "Knudson").
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 Section III.2, 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. Between February 2003 and January 2004, Knudson, age 45, offered and sold securities, in the form of units of beneficial interest for Kings Real Estate Investment Trust ("Kings REIT"). In so doing, he participated at key points in the distribution of those securities and received compensation, in the approximate amount of $287,630, related to the transactions. At the time he acted on behalf of Kings REIT, Knudson was not registered with the Commission as a broker, or associated with a registered broker-dealer.
2. On January 23, 2004, the Commission filed a complaint against Knudson and the other defendants and relief defendants in SEC v. Kings Real Estate Investment Trust, et al. (Civil Action No. 5:04-04006-RDR-KGS), in the United States District Court for the District of Kansas. On August 6, 2004, a final judgment was entered by consent against Knudson, permanently enjoining him from future violations of Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 ("Securities Act") and Sections 10(b) and 15(a) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder.
3. The Commission's complaint alleged, among other things, that the named defendants, between February 2003 and January 2004, raised approximately $2.9 million in Kansas and other states through sales of securities, in the form of units of beneficial interest. The Commission further alleges that in selling these securities, Knudson and the other defendants made materially false and misleading statements and omissions regarding the use of investor proceeds, and the potential return on, and liquidity and risk of Kings REIT securities.
IV.
In view of the foregoing, the Commission deems it appropriate and in the public interest to impose the sanctions specified in Respondent Knudson's Offer.
Accordingly, it is hereby ORDERED:
Pursuant to Section 15(b)(6) of the Exchange Act that Respondent Knudson is barred from association with any broker or dealer.
Any reapplication for association by the Respondent will be subject to the applicable laws and regulations governing the reentry process, and reentry may be conditioned upon a number of factors, including, but not limited to, the satisfaction of any or all of the following: (a) any disgorgement ordered against the Respondent, whether or not the Commission has fully or partially waived payment of such disgorgement; (b) any arbitration award related to the conduct that served as the basis for the Commission order; (c) any self-regulatory organization arbitration award to a customer, whether or not related to the conduct that served as the basis for the Commission order; and (d) any restitution order by a self-regulatory organization, whether or not related to the conduct that served as the basis for the Commission order.
By the Commission.
Secretary