STATE OF OHIO, DEPARTMENT OF COMMERCE
DIVISION OF SECURITIES
COLUMBUS, OHIO 43266-0548
Order No. 98-060
IN THE MATTER OF: CYBERNET VENTURES, INC. CEASE AND DESIST
DIVISION ORDER
WHEREAS, the Ohio Division of Securities (hereinafter "the Division") is charged with the responsibility of protecting investors and finds that this order is necessary or appropriate in the public interest or for the protection of investors, and is consistent with the purposes of the Ohio
Securities Act, Chapter 1707 of the Ohio Revised Code; and
WHEREAS, the Division has conducted an investigation into the activities of CyberNet Ventures, Inc., whose address is 1120 Lincoln Street, Suite 1601, Denver, Colorado, 80203-2141, and as a result of said investigation, the Division finds as follows:
(1) Fred Ambach is a natural person and a resident of the State of Ohio;
(2) CyberNet Ventures, Inc. ("CyberNet") is a private venture capital firm responsible for selling 420 purported general partnership interests in Lynxus Affiliate Partners ("Lynxus");
(3) Lynxus is an Internet Service Provider;
(4) Lynxus, Inc. is the pro tem managing partner of Lynxus;
(5) On or about October 27, 1997, a CyberNet salesman telephoned Fred Ambach for the purpose of selling Ambach purported general partnership interests in Lynxus. On October 30, 1997, Ambach received Lynxus offering materials in the mail from Cybernet, including a Lynxus general partnership agreement;
(6) The purported general partnership interests in Lynxus cost $5,000.00 each, and an investor is required to purchase a minimum of two general partnership interests;
(7) CyberNet receives a commission for the sale of each purported general partnership interest in Lynxus;
(8) The purported general partnership interests in Lynxus are investment contracts and fall within the definition of a "security" as that term is defined in R.C. section 1707.01(B);
(9) The events described in Paragraph (5) fall within the definition of a "sale" as that term is defined in R.C. section 1707.01(C);
(10) Cybernet is a "Dealer", as that term is defined in R.C. section 1707.01(E)(1);
(11) R.C. section 1707.14(A) provides that no person shall act as a dealer, unless the person is licensed as a dealer by the Division of Securities;
(12) R.C. section 1707.44(A) provides that no person shall engage in any act or practice that violates division (A), (B) or (C) of R.C. section 1707.14;
(13) CyberNet, as described in Paragraph (5), sold securities to Ambach without having been licensed by the Division of Securities as a dealer, and therefore, in violation of R.C. 1707.44(A);
(14) R.C. section 1707.44(C)(1) prohibits the sale in Ohio of securities that are not exempt from the registration requirements of R.C. section 1707.02, not the subject matter of an exempt transaction under R.C. sections 1707.03, 1707.04 or 1707.34, not registered by description,
coordination or qualification, or not the subject matter of a transaction that has been registered by description;
(15) The investment contracts sold in Lynxus are not exempt from the registration requirements of R.C. section 1707.02, not the subject matter of an exempt transaction under R.C. sections 1707.03, 1707.04 or 1707.34, not registered by description, coordination or qualification, not the subject matter of a transaction that was registered by description, and, therefore, the investment contracts in Lynxus were sold in violation of R.C. section 1707.44(C)(1);
WHEREAS, based on Paragraphs (1) through (15), the Division finds that CyberNet has violated the provisions of Ohio Revised Code sections 1707.44(A) and 1707.44(C)(1);
WHEREAS, on or about December 22, 1997, pursuant to Ohio Revised Code Chapter 119, the Division issued to CyberNet its Notice of Opportunity for Hearing, Division Order No.
97-426, which set forth Paragraphs (1) through (15) above;
WHEREAS, a representative of CyberNet signed for Certified Mail No. P 317-260-281 on or about December 29, 1997, with the green card being received by the Division on January 6,
1998;
WHEREAS, CyberNet timely requested an administrative hearing as permitted by Division Order No. 97-426; and
WHEREAS, in response to Division Order No. 97-426, CyberNet and the Division have entered into a Consent Agreement, which is attached hereto as Exhibit A and incorporated herein by reference.
THEREFORE, IT IS ORDERED THAT, pursuant to Ohio Revised Code section 1707.23, CyberNet Ventures, Inc. is hereby ORDERED to CEASE AND DESIST from the acts and practices as described above, which constitute a violation of Chapter 1707 of the Ohio Revised Code.
NOTICE OF APPEAL RIGHTS: CYBERNET IS HEREBY NOTIFIED THAT THIS ORDER MAY BE APPEALED PURSUANT TO SECTION 119.12 OF THE OHIO REVISED CODE BY FILING A NOTICE OF APPEAL WITH THE OHIO DIVISION OF SECURITIES SETTING FORTH THE ORDER APPEALED FROM AND THE GROUNDS OF THE APPEAL. A COPY OF SUCH NOTICE OF APPEAL SHALL ALSO BE FILED WITH THE FRANKLIN COUNTY COURT OF COMMON PLEAS. SUCH NOTICE OF APPEAL MUST BE FILED WITHIN (15) DAYS AFTER THE MAILING OF THIS ORDER.
securities.state.oh.us |
