Re: In the Matter of High Growth Publishing Group; In the Matter of IBJ Publications, et al
UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION
SECURITIES ACT OF 1933
Release No. 7595 / October 27, 1998
ADMINISTRATIVE PROCEEDING
File No. 3-9762
______________________________________
In the Matter of
THE HIGH GROWTH PUBLISHING GROUP and EVERETT GUST,
Respondents.
______________________________________
ORDER INSTITUTING PUBLIC CEASE-AND-DESIST PROCEEDING, MAKING
FINDINGS AND ISSUING A CEASE-AND-DESIST ORDER
I.
The Securities and Exchange Commission ("Commission")
deems it appropriate that a public cease-and-desist
proceeding pursuant to Section 8A of the Securities Act of
1933 ("Securities Act") be instituted against The High
Growth Publishing Group ("HGPG") and Everett Gust ("Gust").
II.
In anticipation of the institution of this proceeding,
HGPG and Gust have each submitted an Offer of Settlement,
each of which the Commission has determined to accept.
Solely for the purpose of this proceeding and any other
proceeding brought by or on behalf of the Commission or in
which the Commission is a party, and without admitting or
denying the findings contained herein, except that HGPG and
Gust each admits the jurisdiction of the Commission over
each of them and over the subject matter of this proceeding,
HGPG and Gust each consents to the entry of this Order
Instituting Public Cease-and-Desist Proceeding, Making
Findings and Issuing a Cease-and-Desist Order ("Order") set
forth below.
Accordingly, IT IS ORDERED that a proceeding pursuant
to Section 8A of the Securities Act be, and hereby is,
instituted.
III.
On the basis of this Order and the Offers of Settlement
submitted by HGPG and Gust, the Commission finds that:
A. RESPONDENTS
1. The High Growth Publishing Group ("HGPG") is a Costa
Mesa, California publishing business owned and operated
under a fictitious business name by Everett Gust. HGPG
publishes two Internet newsletters, The High Growth
Newsletter and Portfolio Prospects.
2. Everett Gust ("Gust") is 64 years old and resides in
Costa Mesa, California.
B. FACTS
1. From March 1991 through March 1998, HGPG published The
High Growth Newsletter, and from September 1994 through
March 1998, HGPG published Portfolio Prospects. Both
newsletters described the securities of small, low-
priced, publicly-held companies that purportedly had
strong growth potential and targeted "high-risk-reward
investors." The newsletters were posted on HGPG's
website on the Internet in or about September 1995.
The High Growth Newsletter was also available to
subscribers via the mail. HGPG claimed that in early
1998, The High Growth Newsletter had a circulation of
between 5,000 and 10,000.
2. Gust owns and operates HGPG. He currently operates
HGPG out of his home. Gust wrote HGPG's newsletters
and was responsible for their content.
3. Issuers paid HGPG a fee to appear in the "PayDirt"
section of The High Growth Newsletter and in Portfolio
Prospects. The HGPG website contained a disclaimer
that HGPG may be paid a fee by companies referred to in
the newsletters and requested that viewers read the
disclaimer before accessing HGPG's newsletters. In
addition, HGPG disclosed in the "PayDirt" section of
The High Growth Newsletter that HGPG received
compensation from the companies listed, but did not
disclose the amount of compensation received. HGPG
did, in fact, receive compensation from certain issuers
featured in the newsletters.
4. Section 17(b) of the Securities Act prohibits any
person from publishing, giving publicity to, or
circulating any notice, circular, advertisement,
newspaper, article, letter, investment service or
communication which describes a security for a
consideration received or to be received, directly or
indirectly, from an issuer, underwriter or dealer,
without fully disclosing the receipt, whether past or
prospective, of such consideration and the amount
thereof. As a result of the conduct identified in
paragraphs III.B.1. through III.B.3., HGPG and Gust
violated Section 17(b) of the Securities Act by
publishing investment newsletters, available on the
Internet, which described certain securities without
disclosing the amount of consideration received from
the issuers of such securities.
IV.
Based on the foregoing, the Commission deems it
appropriate to accept the Offers of Settlement submitted by
HGPG and Gust.
Accordingly, IT IS HEREBY ORDERED that:
1. Pursuant to Section 8A of the Securities Act, HGPG
cease and desist from committing or causing any violation
and any future violation of Section 17(b) of the Securities
Act; and
2. Pursuant to Section 8A of the Securities Act, Gust
cease and desist from committing or causing any violation
and any future violation of Section 17(b) of the Securities
Act.
By the Commission.
Jonathan G. Katz
Secretary
=====
UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION
SECURITIES ACT OF 1933
Release No. 7604 / October 27, 1998
ADMINISTRATIVE PROCEEDING
File No. 3-9771
)
In the Matter of ) ORDER INSTITUTING PUBLIC
) CEASE-AND-DESIST
) PROCEEDINGS PURSUANT TO
IBJ Publications, Inc., ) SECTION 8A OF THE
Respondent. ) SECURITIES ACT OF 1933,
) MAKING FINDINGS AND
) ORDERING RESPONDENT TO
CEASE AND DESIST
I.
The Commission deems it appropriate and in the public
interest to institute cease-and-desist proceedings pursuant
to Section 8A of the Securities Act of 1933 ("Securities
Act") against IBJ Publications, Inc. ("IBJ Publications").
In anticipation of these proceedings, IBJ Publications
has submitted an Offer of Settlement ("Offer") which the
Commission has determined to accept. Solely for the purpose
of these proceedings and any other proceedings brought by or
on behalf of the Commission, or to which the Commission is a
party, and without admitting or denying the findings
contained in this Order Instituting Public Cease-and-Desist
Proceeding pursuant to Section 8A of the Securities Act,
Making Findings and Ordering Respondent to Cease and Desist
("Order"), except as to the Commission's jurisdiction over
IBJ Publications and the matters set forth in this Order,
which is admitted, IBJ Publications consents to the entry of
this Order.
II.
Accordingly, IT IS HEREBY ORDERED THAT public cease-
and-desist proceedings pursuant to Section 8A of the
Securities Act be, and hereby, are, instituted.
III.
On the basis of this Order and the Offer submitted by
IBJ Publications, the Commission finds that:
Respondent
IBJ Publications, which is incorporated in the state of
Florida, publishes an on-line and hard copy newsletter, the
IBJ Observer, which has its Internet registration and
offices in Clearwater, Florida.
Summary
A. The IBJ Observer promotes BioGenetic Technologies,
Inc., ("BioGenetic") which trades on the Toronto Stock
Exchange-Canadian Dealers Network. The IBJ Observer has
published a variety of articles and press releases
concerning BioGenetic.
B In approximately March 1998, IBJ Publications and
BioGenetic entered into a written contract in which IBJ
Publications agreed to feature stories about BioGenetic in
the newsletter for two years in exchange for 150,000 shares
of BioGenetic stock.
C IBJ Publications failed to specifically disclose
in the IBJ Observer the compensation that was or is to be
paid by BioGenetic and what amount was received.
Violations
D. IBJ Publications has violated Section 17(b) of
the Securities Act by promoting BioGenetic in return for
150,000 shares of BioGenetic stock without properly
disclosing the specific compensation that was received.
IV.
Accordingly, IT IS ORDERED, pursuant to Section 8A of
the Securities Act, that IBJ Publications cease and desist
from committing or causing any violations, and any future
violations, of Section 17(b) of the Securities Act.
By the Commission.
Jonathan G. Katz,
Secretary
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