Litigation Release No. 16271 / September 2, 1999

Accounting and Auditing Enforcement 1157 / September 2, 1999

Judgments for Injunctions and Other Relief Entered Against All Defendants in United Fire Technology, Inc. Securities Case

U.S. Securities and Exchange Commission v. United Fire Technology, Inc., James Gartland, Beverlee Kamerling, A/K/A Beverlee Claydon, WWBM Consultants, Inc., Michael Hooper, Kenneth Starnes, and Charles Jones, United States District Court, Western District of Washington at Seattle, No. C97-1151R

The Securities and Exchange Commission announced that on August 31, 1999 United States District Judge Barbara Jacobs Rothstein entered judgments against all defendants sued by the Commission for their involvement in the issuance and sale of common stock of United Fire Technology, Inc. ("UFT").

The Commission's complaint filed on July 15, 1997 alleged that Kamerling secretly controlled UFT and directed UFT to conduct an unregistered distribution of common stock and disseminate materially misleading information about UFT to investors. Specifically, the complaint alleged that UFT conducted a distribution of unregistered shares of its common stock, and Kamerling, WWBM, and Jones illegally sold this common stock to investors in violation of the federal securities laws. The complaint also alleged that UFT, Kamerling, Gartland, and Hooper violated the antifraud provisions of the federal securities laws by making false and misleading material statements and by failing to disclose material information about UFT's "Flamex" products and about Kamerling's involvement with UFT to securities brokers and the investing public. The complaint further alleged that UFT paid undisclosed compensation, or kickbacks, to Starnes, a stockbroker, to induce him to sell UFT common stock to his customers.

Without admitting or denying the allegations of the Commission's complaint, six defendants consented to the entry of final judgments:

UFT, a corporation based in Bellevue, Washington, consented to a permanent injunction barring it from issuing unregistered securities and from violating the antifraud provisions of the federal securities laws. UFT was ordered to disgorge its ill-gotten gains of $250,000 together with pre-judgment interest of $67,768.03. Payment of these amounts was waived, based on UFT's demonstrated inability to pay.

Beverlee Kamerling, also known as Beverlee Claydon, age 55, of Kirkland, Washington, and Victoria, British Columbia, consented to a permanent injunction barring her from issuing unregistered securities and from violating the antifraud provisions of the federal securities laws. Kamerling was ordered to disgorge her ill-gotten gains of $1,066,515.80 together with pre-judgment interest of $412,570.71. Finally, Kamerling consented to an order permanently prohibiting her from serving as an officer or director of any publicly traded corporation.

WWBM Consultants, Inc., a corporation controlled by Kamerling and based in Bellevue, Washington, consented to a permanent injunction barring it from issuing unregistered securities. WWBM was ordered to disgorge its ill-gotten gains of $1,066,515.80 together with pre-judgment interest of $412,570.71. The disgorgement obligations of Kamerling and WWBM are joint and several.

James Gartland, age 53, of Kirkland, Washington, former president of UFT, consented to a permanent injunction barring him from violating the antifraud provisions of the federal securities laws.

Michael Hooper, age 47, of Spokane, Washington, an accountant, consented to a permanent injunction barring him from violating the antifraud provisions of the federal securities laws.

Charles Jones, age 64, of Lake Dallas, Texas, consented to a permanent injunction barring him from issuing unregistered securities and from effecting transactions in securities unless associated with a registered securities broker or dealer. Jones was convicted of one count of securities fraud in connection with the sale of UFT common stock in the United States District Court for the Eastern District of Texas. Jones is currently serving a 14 month sentence imposed on that conviction, and ordered to make restitution to his victims. United States v. Charles F. Jones, United States District Court, Eastern District of Texas, Sherman Division, No. 4:99-cr-00016 (June 21, 1999).

A judgment was entered against the remaining defendant on his default in defending the Commission's action:

Kenneth Starnes, age 32, a stockbroker formerly of Taylors, South Carolina, was enjoined from violating the antifraud provisions of the federal securities laws. Starnes was ordered to disgorge his ill-gotten gains of $12,136.24 together with pre-judgment interest of $4,520.57.

For further information, see Commission Litigation Release No. 15415, July 16, 1997.