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Microcap & Penny Stocks : Computerized Thermal Imaging CIO (formerly COII) -- Ignore unavailable to you. Want to Upgrade?

To: Bobo who wrote (4191)	6/24/2000 1:50:00 AM
From: Pluvia	Respond to of 6039

*JOHNSTON'S PARTNER STOCKETT NAILED BY THE SEC* Bobo - nice work on the Johnston/Grace/Stockett link... Here's a few interesting tidbits on Stockett... It appears birds of a feather flock... sec.gov c. Mr. Stockett's Disciplinary History Mr. Stockett claims that he has never attempted to hide his disciplinary history. (Tr. 1082-88.) He did not, however, offer any information about his disciplinary record to Mr. Latef or Mr. Choudhry at any time during negotiation or execution of the contracts.<10> (Tr. 237, 839-40.) In fact, he has an extensive disciplinary record in the securities industry that includes: (i) a 1985 permanent injunction from the United States District Court for the Eastern District of Virginia which enjoined him from engaging in acts and practices which constitute or would constitute violations of the antifraud provisions of the federal securities laws; (ii) a 1988 permanent injunction from the State of California which enjoined him from offering to sell or selling certain securities in California and assessed civil penalties; (iii) a 1996 cease and desist order from the State of Oregon which ordered Mr. Stockett and OTC to cease and desist from offering securities in Oregon and to pay a civil penalty. (Div. Exs. 4, 5, 6; see also Div. Ex. 9 at 15-16; Div. Ex. 56 at 15-16; Tr. 696-98.) The Division requests that Mr. Stockett be barred from association with any broker, dealer, municipal securities dealer, investment adviser, and investment company. This is commonly referred to as an industry-wide bar or "collateral bar." The Commission recently decided that it had the authority to issue such collateral bars against respondents "in cases where it is contrary to the public interest to allow someone to serve in any capacity in the securities industry." Meyer Blinder, 65 SEC Docket 1970, 1981 (Oct. 1, 1997). Two factors to consider in determining whether a collateral bar is appropriate in the public interest are whether the respondent's "misconduct is of the type that, by its nature, 'flows across' various securities professions and poses a risk of harm to the investing public in any such profession" and "whether the egregiousness of the respondent's misconduct demonstrates the need for a comprehensive response in order to protect the public." Id. In light of the public interest factors cited above, I conclude that it is appropriate to issue a collateral bar against Mr. Stockett. The allegations, findings, and conclusions against Mr. Stockett were made pursuant to the Securities Act, Exchange Act, Advisers Act, and Company Act. Mr. Stockett's activities necessarily "flowed across" the various securities professions and posed a significant risk of harm to the investing public. His conduct was egregious and requires an immediate and comprehensive response in order to protect the public interest. Applying these criteria, I find that a third tier civil money penalty of $50,000 is appropriate against Mr. Stockett and that no money penalty should be issued against the Hudson Respondents. The Respondents' acts and omissions involved fraudulent and deceitful conduct and posed a significant risk of substantial losses to investors. Mr. Stockett's conduct, however, exhibited a higher level of scienter and egregiousness. The evidence is that Mr. Stockett intended to continue and expand his course of fraudulent and manipulative conduct. He has been disciplined by three government bodies for prior violative conduct and has, generally, demonstrated a reckless disregard of regulatory requirements. It is overwhelmingly likely that Mr. Stockett will violate the securities laws in the future, which emphasizes the need to deter him from doing so.