FOR IMMEDIATE RELEASE 99-103 SEC Brings Additional Enforcement Actions Against Investment Advisers and Transfer Agents for Failing to Make Required Year 2000 Disclosure Washington, DC, August 26, 1999 -- The Securities and Exchange Commission today charged five investment advisers and four transfer agents for failing to report to the Commission concerning their Year 2000 preparedness. Within the past year, the Commission has filed actions charging a total of 37 broker- dealers, 13 investment advisers and 15 transfer agents for failing to report their Year 2000 preparedness. No charges were brought against broker-dealers today because they filed their BD- Y2K forms as required. SEC Director of Enforcement Richard H. Walker said, "We place great importance on full and fair Y2K disclosure by those we regulate. With only four months left to the millennium, it is vital that both investors and regulators be given a current report card by each firm as to their state of readiness. We are pleased that, with few exceptions, firms made the required filings." The Commission instituted public administrative and cease- and-desist proceedings against five investment advisers that failed to timely file all or part of Form ADV-Y2K, which was due on June 7, 1999. Two of the five investment advisers, Amervest Company, Inc., located in Los Angeles, California, and KMI Realty Advisors, Inc., located in Indianapolis, Indiana, simultaneously settled with the Commission by agreeing to the entry of an order to cease and desist from further violations, be censured, and pay a civil penalty of $22,500 and $15,000, respectively. The other three investment advisers charged by the Commission are contesting the charges. They are: Huber Hogan Consulting, Inc., located in Red Bank, New Jersey; Russon Financial Services, Inc., located in Woodland Hills, California; and Robert Sears, located in Northampton, Massachusetts. The Commission also instituted proceedings against two transfer agents for failing to timely file an updated Form TA- Y2K, which was due by April 30, 1999. Those transfer agents are Peachtree Stock Transfer and Robert J. Crain Jr., both located in Memphis, Tennessee. Finally, the Commission charged two transfer agents, Bassett Furniture Industries, Inc. ("Bassett"), located in Bassett, Virginia, and Thermal Energy Storage, Inc. ("Thermal"), located in San Diego, California, with failing to make the first filing of Form TA-Y2K, which was due by August 31, 1998. Bassett and Thermal simultaneously settled the action by agreeing to the entry of an order to cease and desist from further violations and be censured. Bassett agreed to pay a civil penalty of $5,000. No penalty was imposed against Thermal based upon its demonstrated inability to pay. Today's actions against investment advisers and transfer agents mark a continuation of the Commission's efforts to protect investors by ensuring that securities industry participants fully disclose their Year 2000 preparedness. The Commission is using the Y2K filings to obtain a more complete picture of the securities industry's overall Year 2000 preparations and to identify firm-specific and industry-wide problems. By failing to timely make the required filings, the five investment advisers and four transfer agents failed to disclose to the Commission and the investing public the steps, if any, they have taken to address Year 2000 problems, including contingency plans. For the investment advisors and transfer agents that have not settled with the Commission, hearings will be held to assess the validity of the charges and determine if remedial sanctions are appropriate and in the public interest. Broker-dealers were also required to file an updated Form BD- Y2K no later than April 30, 1999. As all broker-dealers made the required filings, no actions have been brought against any broker- dealers today. Issuers, their representatives, and investors are encouraged to assess the Year 2000 readiness of firms in the securities industry by reviewing their Y2K filings. These filings may be obtained either by calling the Commission's public reference room at (202) 942-8090 or by accessing the Commission's web site at http://www.sec.gov/news/y2k/y2kreps.htm. For further information regarding the Commission's action against the five investment advisers, contact Valerie Caproni, Regional Director, Pacific Regional Office, at (323) 965-3998. For information regarding the Commission's action against the four transfer agents, contact Daniel F. Shea, Regional Director, Central Regional Office at (303) 844-1000. # # #