Michael L. Jenkins, et al.

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

LITIGATION RELEASE NO. 16375 / November 30, 1999

SECURITIES AND EXCHANGE COMMISSION v. MICHAEL L. JENKINS, ET AL.
USDC/NDTX/DALLAS 3-99CIV2222-D

The Securities and Exchange Commission announced that on October 26, 1999, the Honorable Sam A. Lindsay, United States District Court for the Northern District of Texas entered final judgments of permanent injunction against defendants Lawrence Arthur Petersen and Jamie T. Tsutusi. The judgments permanently enjoined both defendants from violating Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933, and Sections 10(b) and 15(a) of the Securities Exchange Act of 1934. Petersen and Tsutsui were ordered to pay disgorgement in the amounts of $115,326 and $18,741, respectively. Payment of disgorgement, however, was waived based upon Petersen's and Tsutsui's sworn showings of inability to pay. Moreover, the Court did not order either defendant to pay a civil penalty because of his demonstrated inability to pay. Petersen and Tsutusi consented to the entry of the judgment.

The Complaint, which was filed by the Commission on August 11, 1998, alleged that between April 1993 and December 1994, Tsutsui, Petersen and another defendant collectively raised approximately $800,000 in promissory notes issued by Absolute Resources Corporation, a Dallas, Texas privately held company. The proceeds of the notes were purportedly used to develop a sand mine. The Complaint further alleges that in connection with the offer and sale of the notes, Petersen and Tsutsui made material misrepresentations and omissions of material fact concerning, among other things, the ownership of the sand mine, the use of investor funds, and the safety of the investment.