UNITED STATES OF AMERICA Before the SECURITIES AND EXCHANGE COMMISSION SECURITIES EXCHANGE ACT OF 1934 Release No. 37708 / September 23, 1996 ADMINISTRATIVE PROCEEDING File No. 3-9089 ___________________________ : In the Matter of : ORDER INSTITUTING PROCEEDINGS : PURSUANT TO SECTION 15(b)(6) George C. Bergleitner, Jr.,: OF THE SECURITIES EXCHANGE ACT : OF 1934, MAKING FINDINGS, AND : IMPOSING REMEDIAL SANCTIONS Respondent. : ___________________________: I. The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest that public administrative proceedings be, and they hereby are, instituted pursuant to Section 15(b)(6) of the Securities Exchange Act of 1934 ("Exchange Act") against George C. Bergleitner, Jr. ("Bergleitner"). II. In anticipation of the institution of this administrative proceeding, Bergleitner has submitted an Offer of Settlement 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 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 any findings set forth herein, except as to jurisdiction and paragraphs III.A. and III.C.3 below, which he admits, Bergleitner consents to the issuance of this Order Instituting Administrative Proceedings Pursuant to Section 15(b)(6) of the Securities Exchange Act of 1934, Making Findings, and Imposing Remedial Sanctions ("Order") and to the entry of the findings and imposition of the remedial sanctions as set forth below. ==========================================START OF PAGE 2====== III. FINDINGS On the basis of this Order and Bergleitner's Offer of Settlement, the Commission finds that:-[1]- A. Respondent Bergleitner, of Stamford, New York, is and was at all relevant times the President of Stamford Financial Consulting, Inc. ("Stamford"). During 1989 and 1990, Stamford was a "consultant" to various blind pool companies, including Leona Enterprises, Inc. ("Leona"). During the relevant period, Bergleitner participated in the offering of Leona penny stock. B. Related Parties 1. Leona, a blind pool formed in 1987, was incorporated in Delaware. Leona was at all relevant times a reporting company registered with the Commission pursuant to Section 15(d) of the Exchange Act, 15 U.S.C.  78o(d). Leona's common stock was traded over the counter and listed in the Pink Sheets. The common stock of Leona was not registered or approved for registration upon notice of issuance on a national securities exchange, nor was such security authorized, or approved for authorization upon notice of issuance, for quotation on an automated quotation system sponsored by a registered securities association, nor was such security issued by a registered investment company. At all times relevant to this matter the price of Leona common stock was less than five dollars per share. At no time relevant to this matter did Leona have net tangible assets in excess of $2,000,000 nor average revenue of $6,000,000 for a three year period. 2. Milan National, was at all relevant times a private Delaware corporation formed in 1991. 3. Milan International, was at all relevant times a private Delaware corporation formed in 1991. 4. Anthony Sarivola [a/k/a Anthony Martelli and Anthony Steele] ("Sarivola") was from October 1991 onward the undisclosed ---------FOOTNOTES---------- -[1]- The findings herein are made pursuant to Respondent's Offer of Settlement and are not binding on any other person or entity in this or any other proceeding. ==========================================START OF PAGE 3====== owner, promoter and control person of Leona and its related companies, including, among others, Milan National, Milan International and Eurobanc Ltd. ("Eurobanc"). C. FACTS 1. On October 31, 1995, the Commission filed a complaint in the United States District Court for the Southern District of New York, SEC v. Anthony Sarivola, et al., 95 Civ. 9270, against, among others, Sarivola, Bergleitner, Leona, Milan National, Milan International and certain of their officers, directors, control persons and promoters. The Complaint charges the defendants with violations of various registration, antifraud, corporate reporting, and books and records provisions of the federal securities laws. 2. The Commission's Complaint alleges, among other things, as follows: a. From July 1987 through September 1989, Bergleitner formed and controlled Leona and seven other shell companies. b. Between January 1989 and September 1990, Bergleitner caused each of his eight companies to file a registration statement on Form S-18 with the Commission for the issuance of stock and warrants through a "blank check" or "blind pool" offering. Ultimately, only the registration statements of Leona and three other companies were declared effective. c. After the registration statements were filed, Bergleitner promoted the blind pools through his consulting firm, Stamford, and received undisclosed compensation in the form of cash and stock. d. Bergleitner continued to control every aspect of the blind pools' operations even after they became public. He appointed nominee officers, controlled the corporate funds, maintained company documents, and arranged for each company to employ the same counsel, transfer agent, financial printer, certified public accountant, and underwriter. e. The registration statements, and the amendments thereto, however, made no mention of Bergleitner's role as a promoter, shareholder, or control person. f. By concealing his control of these companies, Bergleitner thereby avoided disclosing that, in 1984, Bergleitner was permanently enjoined from violating the registration and antifraud provisions of the securities ==========================================START OF PAGE 4====== laws in SEC v. International Property Exchange, et al. 84 Civ. 6072 (C.D.Cal.). g. The registration statements further failed to disclose that Bergleitner received undisclosed compensation from each of the companies in the form of consulting fees, shares of common stock, and kickbacks from legal counsel. Specifically, the registration statements failed to disclose that Bergleitner received a $12,000 "consulting fee" from each of the companies through Stamford; that prior to the initial public offerings, Bergleitner caused each of the companies to issue at least 15,000 to 20,000 shares of stock and additional cash to Bergleitner through Stamford; and that Bergleitner directed counsel for certain of the companies to provide Bergleitner with $3,000 from funds that had been earmarked as "legal expenses." h. In or about October 1991, Bergleitner sold control of Leona to Sarivola for $25,000. From approximately November 1991 through June 1992, Bergleitner also sold approximately 19,000 shares of Leona stock in the open market and received proceeds of $29,975. 3. On March 28, 1996, without admitting or denying any of the allegations contained in the Commission's Complaint, except as to jurisdiction, Bergleitner consented to the entry of a final judgment of permanent injunction and other relief. On August 13, 1996, the Court permanently enjoined Bergleitner from future violations of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Exchange Act, and Rule 10b-5 thereunder. IV. Based on the foregoing, the Commission deems it appropriate and in the public interest to accept the Offer of Settlement submitted by Bergleitner, and accordingly, IT IS HEREBY ORDERED, effective immediately, that Bergleitner be, and hereby is, barred from participating in any offering of penny stock, including (i) acting as a promoter, finder, consultant, agent or other person who engages in activities with a broker, dealer or issuer for purposes of the issuance of or trading in any penny stock, or (ii) inducing or attempting to induce the purchase or sale of any penny stock. By the Commission. Jonathan G. Katz Secretary