UNITED STATES OF AMERICA Before the SECURITIES AND EXCHANGE COMMISSION SECURITIES EXCHANGE ACT OF 1934 Release No. 38803 / July 1, 1997 ADMINISTRATIVE PROCEEDING File No. 3-9136 In the Matter of STEPHEN J. SOGIN, Respondent ORDER MAKING FINDINGS AND CEASE-AND-DESIST ORDER I. Stephen J. Sogin ("Respondent") has submitted an Offer of Settlement ("Offer") for the purpose of disposing of the issues raised by this proceeding. Solely for the purpose of this proceeding and any other proceeding brought by or on behalf of the Commission or to which the Commission is a party, and without admitting or denying the matters set forth herein, Respondent consents to the issuance of the Order Making Findings and Cease-and-Desist Order ("Order") set forth herein.<(1)> The Commission has determined that it is appropriate and in the public interest to accept Respondent's Offer and accordingly is issuing this Order. <(1)> In a related matter, Montgomery Medical Ventures II, L.P. ("MMVII") and Montgomery Medical Partners II, L.P. ("MMPII") consented, without admitting or denying the allegations, to a Commission order that they cease and desist from violating Sections 13(d), 13(g), and 16(a) of the Exchange Act and Rules 13d-1, 13d-2, and 16a-2 and 16a-3 thereunder, In the Matter of Montgomery Medical Ventures, L.P., et al., Admin. Proc. No. 3-9028, and consented, without admitting or denying the allegations, to a final judgment ordering them to pay civil penalties of $15,000 each, SEC v. Montgomery Medical Ventures, L.P., et al., Civil Action No. 96-1444 (D.D.C. 1996). On September 30, 1996, the Commission issued an Order Instituting Cease-and-Desist Proceedings Pursuant to Section 21C of the Securities Exchange Act of 1934 against Stephen J. Sogin and Steven N. Weiss. ======END OF PAGE 1====== II. Based on the foregoing, the Commission finds that: A. FACTS 1. Respondent Respondent, Stephen J. Sogin, age 55, is a resident of Occidental, California and Geneva, Switzerland. Sogin was a general partner of MMPII from its formation in 1987 until his resignation on January 31, 1995. Sogin was at all relevant times an indirect beneficial owner of the securities beneficially owned by MMVII. Sogin has been a director of Finet Holdings Corporation since March 1990, a director of Osteotech, Inc. since October 1988, and a director of Procept, Inc. since December 1985. 2. Related Parties a. MMVII is a California limited partnership with its principal offices in San Francisco, California. MMVII is an investment partnership that engages in early-stage financing and acquisition of investments in health care and medical technology companies. MMVII is or was the direct or indirect beneficial owner of more than ten percent of the equity securities of, among other securities, Advanced Medical, Inc. ("Advanced Medical"), Finet Holdings Corporation ("Finet"), Innerdyne, Inc., Osteotech, Inc., Procept, Inc. and Somatix Therapy Corporation ("Somatix"). b. MMPII is a California limited partnership with its principal offices in San Francisco, California. MMPII, as the general partner of MMVII, is or has been at all relevant times the indirect beneficial owner of the equity securities beneficially owned by MMVII. 3. Issuers a. Advanced Medical, Inc. Advanced Medical, Inc. (formerly known as Advanced Medical Technologies, Inc.), is incorporated in Delaware with its principal offices in San Diego, California. Advanced Medical through its major operating subsidiary, IMED Corporation, is engaged in the development and manufacturing of infusion systems and related technologies for the health care industry. According to Advanced Medical's most recent Annual Report on Form 10-K for its fiscal year ended December 31, 1995, it had total assets of $169.6 million and had stockholders' equity of over $31.5 million. As of March 21, 1996, Advanced Medical had 16,135,125 shares of common stock outstanding. Advanced Medical reported net income of $27,454,000 or $.83 per share, assuming full dilution, for its 1995 fiscal year. Advanced Medical's common stock has been registered with the Commission pursuant to Section 12(b) of the Exchange Act since March 27, 1989, and is traded on the American Stock Exchange. ======END OF PAGE 2====== b. Finet Holdings Corporation Finet Holdings Corporation (formerly known as William & Clarissa, Inc.), is incorporated in Delaware with its principal executive offices in San Francisco, California. Finet is the holding company for Finet Corporation, a mortgage brokerage company. According to Finet's most recent Annual Report on Form 10-K for its fiscal year ended December 31, 1994, it had total assets of approximately $4 million and stockholders' equity of approximately $3 million. As of March 30, 1995, Finet had 7,154,031 shares of common stock outstanding. Finet reported a net loss from continuing operations of over $2.7 million or $.70 per share for its 1994 fiscal year. Finet's common stock has been registered with the Commission pursuant to Section 12(g) of the Exchange Act since November 14, 1989. According to its filings with the Commission, during 1992 through parts of 1994, there was no established public trading market for Finet's common stock and its shares were either unpriced or periodically quoted in the pink sheets. Periodic trades have occurred since 1994 in the over-the-counter market. c. Innerdyne, Inc. Innerdyne, Inc. (formerly known as Cardiopulmonics, Inc.), is incorporated in Delaware with its principal executive offices in Sunnyvale, California. Innerdyne is engaged in the business of developing, manufacturing and marketing pulmonary and cardiopulmonary products. According to Innerdyne's most recent Annual Report on Form 10-KSB for its fiscal year ended December 31, 1996, it had total assets of over $11.3 million and stockholders' equity of over $8.7 million. As of February 28, 1997, Innerdyne had 21,618,658 shares of common stock outstanding. Innerdyne reported a net loss of over $4.6 million or $.23 per share for its 1996 fiscal year. Innerdyne's common stock has been registered with the Commission pursuant to Section 12(g) of the Exchange Act since February 2, 1992, and is traded on NASDAQ. d. Osteotech, Inc. Osteotech, Inc. is incorporated in Delaware with its principal executive offices in Eatontown, New Jersey. Osteotech is engaged in the aseptic processing of bone, ligaments and tendons for transplantation and provides ceramic (hydroxyapatite) plasma spray coating services and ceramic based products to the orthopedic, dental and ear, nose and throat implant markets. According to Osteotech's most recent Annual Report on Form 10-K for its fiscal year ended December 31, 1996, it had total assets of over $31.4 million and stockholders' equity of over $22.7 million. As of March 3, 1997, Osteotech had 7,909,787 shares of common stock outstanding. Osteotech reported a net loss of $324,000 or $.04 per share for its 1996 ======END OF PAGE 3====== fiscal year. Osteotech's common stock has been registered with the Commission pursuant to Section 12(g) of the Exchange Act since July 12, 1991, and is traded on NASDAQ. e. Procept, Inc. Procept, Inc. is incorporated in Delaware with its principal offices in Cambridge, Massachusetts. Procept is engaged in the development of small molecule compounds for the treatment of immune system disorders. According to Procept's most recent Annual Report on Form 10-K for its fiscal year ended December 31, 1996, it had total assets of over $8.9 million and stockholders' equity of over $6.3 million. As of March 24, 1997, Procept had 13,771,868 shares of common stock outstanding. Procept reported a net loss of over $11 million or $.97 per share for its 1996 fiscal year. Procept's common stock has been registered with the Commission pursuant to Section 12(g) of the Exchange Act since December 16, 1992, and is traded on NASDAQ. f. Somatix Therapy Corporation Somatix Therapy Corporation (formerly known as Hana Biologics, Inc.), is incorporated in Delaware with its principal offices in Alameda, California. Somatix is engaged in the development of gene therapy approaches to the treatment of diseases. According to Somatix's most recent Annual Report on Form 10-K for its fiscal year ended June 30, 1996, it had total assets of over $19.3 million and stockholders' equity of over $12.2 million. As of August 19, 1996, Somatix had 24,369,403 shares of common stock outstanding. Somatix reported a net loss of over $20 million or $.90 per share for its 1996 fiscal year. Somatix's common stock has been registered with the Commission pursuant to Section 12(g) of the Exchange Act since July 21, 1986, and is traded on NASDAQ. III. APPLICABLE LAW Section 16(a) of the Exchange Act [15 U.S.C.  78p(a)] requires that beneficial owners of more than ten percent of any class of any equity security registered pursuant to Section 12 of the Exchange Act and the officers and directors of the issuer of any such security (hereinafter "insider") file a statement with the Commission by the effective date of a registration statement filed pursuant to Section 12 of the Exchange Act, or within ten days of becoming such officer, director or beneficial owner, reporting the amount of all equity securities of such issuer of which they are a beneficial owner. Section 16(a) also requires an insider to file with the Commission within ten days after the close of each calendar month, if there has been a change in the insider's ownership of the issuer's equity securities during such month, a statement indicating such changes. Rules 16a-2 and 16a-3 [17 C.F.R.  240.16a-2 and 16a-3] enacted pursuant to Section 16(a) provide that an initial statement by an ======END OF PAGE 4====== insider is to be made on a Form 3 and subsequent statements of changes in beneficial ownership are to be made on a Form 4 or a Form 5. Until May 1, 1991, the statutory filing requirements under Section 16(a) of the Exchange Act were implemented by Rule 16a-1 [17 C.F.R. 240.16a-1]. On January 10, 1991, the Commission adopted a comprehensive revision of the rules under Section 16(a) of the Exchange Act which became effective on May 1, 1991. Among other things, these amendments place the implementation of the former Rule 16a-1 filing requirements in new Rules 16a-2 and 16a-3. IV. RESPONDENT'S VIOLATIONS OF SECTION 16(a) AND THE RULES THEREUNDER Respondent did not timely file for periods ranging from one week to more than four years and three months five Forms 3 and amendments thereto, reporting his beneficial interest in the common stock of four issuers, did not timely file for periods ranging from one week to more than one year eight Forms 4, and did not timely file for more than one month a Form 5. The combined value of Respondent's stock transactions in late Form 4 filings is approximately $697,534. Respondent's history of untimely filings, compiled from the ownership reports, which he filed with the Commission, or which were filed by MMVII or MMPII, and signed by Respondent, is set forth below: ======END OF PAGE 5====== STEPHEN J. SOGIN Forms 3 and 4 Advanced Medical, Inc. (formerly Advanced Medical Technologies, Inc.) March 27, 1989 through February 12, 1993 Date Month Price Due/ Apprx. of No. of Per Total Date Yrs/Mos/ Trans. Type Shares Share* $Value Rec'd Wks.Late 03-89 Form 3 2,631,549 05-01-91 1w 05-10-91 Forms 4 02-92 Buy 1,000 13.38 13,380 03-10-92 11m Amend. 9,000 13.50 121,500 02-12-93 10,000 14.00 140,000 274,880 Total value late reported transactions: $ 274,880 Finet Holdings Corporation (formerly William & Clarissa, Inc.) November 14, 1989 through April 9, 1993 Date Month Price Due/ Apprx. of No. of Per Total Date Yrs/Mos/ Trans. Type Shares Share* $Value Rec'd Wks.Late Forms 3 11-89 Form 3 11-14-89 6m3w Wts for 600,000 06-08-90 C/S 1,067,815 Finet Holdings Corporation (formerly William & Clarissa, Inc.) ======END OF PAGE 6====== Forms 4 04-90 WTS 250,000 .0167 4,175 01-10-92 1m Granted 02-14-92 08-90 WTS 171,429 .0167 2,863 01-10-92 1m Granted 02-14-92 12-91 Buy 800 1.00 800 01-10-92 1m 02-14-92 01-92 Buy 10,000 .63 6,300 02-10-92 1y1w 10,000 .75 7,500 02-16-93 35,000 1.00 35,000 48,800 06-92 Buy 35,000 5.34 186,900 07-10-92 1m 08-11-92 01-93 Buy 10,000 .63 6,300 02-10-93 2m 10,000 .75 7,500 04-09-93 13,800 Total value late reported transactions: $ 257,338 Innerdyne, Inc. (formerly Cardiopulmonics, Inc.) February 2, 1992 through February 16, 1993 Date Month Price Due/ Apprx. of No. of Per Total Date Yrs/Mos/ Trans. Type Shares Share* $Value Rec'd Wks.Late Forms 3 01-92 Form 3 1,309,524 01-27-92 6m 14,394 07-27-92 01-92 Form 3 1,323,340 01-27-92 1y3w Amend. 02-16-93 * = Price per share rounded off C/S = Common stock Wts = Warrants Osteotech, Inc. February 10, 1993 through February 16, 1995 ======END OF PAGE 7====== Date Month Price Due/ Apprx. of No. of Per Total Date Yrs/Mos/ Trans. Type Shares Share* $Value Rec'd Wks.Late Forms 4 01-93 Sale 8,730 7.94 69,316 02-10-93 1m2w 2,000 8.00 16,000 03-23-93 10,000 8.00 80,000 165,316 01-95 Other 374,770 N/R N/R 02-10-95 1w Disp** 02-16-95 Total value late reported transactions: $ 165,316 Procept, Inc. September 12, 1994 through March 28, 1995 Date Month Price Due/ Apprx. of No. of Per Total Date Yrs/Mos/ Trans. Type Shares Share $Value Rec'd Wks.Late Forms 4, 5 08-94 Acq.by 258 N/A N/A 09-12-94 6m2w distribution 03-28-95 to partners FY-94 Form 5 02-14-95 1m2w 03-28-95 Total value late reported transactions: $ 0 * = Price per share rounded off ** = Sogin ceased being a general partner of Montgomery Medical Ventures II, L.P., effective January 31, 1995. Somatix Therapy Corporation (formerly Hana Biologics, Inc.) December 23, 1988 through August 15, 1995 ======END OF PAGE 8====== Date Month Price Due/ Apprx. of No. of Per Total Date Yrs/Mos/ Trans. Type Shares Share $Value Rec'd Wks.Late Form 3 12-88 Form 3 05-01-91 4y3m2w** Not rec'd ** = Lateness calculated through August 15, 1995 * = Price per share rounded off B/O = Beneficial Ownership change ======END OF PAGE 9====== V. FINDINGS Based on the above, the Commission finds that Respondent violated Section 16(a) of the Exchange Act, and Rules 16a-2, 16a-3 and former Rule 16a-1 promulgated thereunder. VI. ORDER In view of the foregoing, the Commission deems it appropriate and in the public interest to accept Respondent's Offer of Settlement. Accordingly, IT IS HEREBY ORDERED that Respondent: Pursuant to Section 21C of the Exchange Act, cease and desist from committing or causing any violation of, and committing or causing any future violation of, Section 16(a) of the Exchange Act and Rules 16a-2 and 16a-3 promulgated thereunder. By the Commission. Jonathan G. Katz Secretary ======END OF PAGE 10======