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part one/ SEC Digest from Oct. 1, 1993 also confirming the disbarment

https://www.sec.gov/news/digest/1993/dig100193.pdf

RUSES AND RELATED' MATTERS
P m S 53, 54 AND 57 ADOPTED UNDER R1E PUBLIC UTILITY HOLDING COMPANY ACT OF 1935 AND
mNI)MENT TO RULE 87 ISSUED FOR COMMENT The Commission has adopted Rules 53, 54 and 57, under the Public Utility Holding
Company Act of 1935. Rule 53 defines a partial safe harbor for registered holding
company financing of exempt wholesale generators, and Rule 54 creates a similar safe
harbor for other transactions involving companies in the registered system. Rule 57
prescribes notification and reporting requirements. The Commission also adopted
amendments to Forms U5S and U-3A-2. In addition, the Commission issued for public
comment an amendment to Rule 87 which would require Commission approval for the sale
of goods and services and construction rendered, directly or indirectly, both to
exempt wholesale generators and foreign utility companies from, and by such entities
to, other companies in the registered holding company system. (Rels. 35-25886;
International Series Rel. 583 and 35-25887; International Series Rel. 584; File No.
S7-28-93, respectively)
FINANCIAL DATA SCHEDULES DEFERRED
The staff of the Office of Information Technology announced today that the Commission
will not begin accepting Financial Data Schedules in the operational EDGAR system on
November 1, 1993, as planned. Financial Data Schedules will be accepted when full
system functionality is available, which the staff currently anticipates will be in
the second quarter of 1994. Further notice will be provided to afford filers
sufficient time to submit test filings before the start of live electronic submissions
of Financial Data Schedules. FOR FURTHER INFORMATION CONTACT: David T. Copenhafer,
Office of Information Technology at [phone] ext. 3005; Sylvia J. Reis, Division
of Corporation Finance at [phone]; Anthony A. Vertuno, Division of Investment
Management at [phone].
PROCEEDING INSTITUTED AGAINST NANCY BRANDSTATTER
The Commission announced that on September 24 public administrative proceedings wer,instituted pursuant to Sections 15(b) and 19(h) of the Securities Exchange Act of 1934 (Exchange Act) against Nancy Brandstatter. Simultaneously with the institution of the proceedings, the Commission accepted Brandstatter's Offer of Settlement wherein Brandstatter. without admitting or denying the findings, except as to the Jurisdiction of the Commission and the entry of the injunction against her. which she admitted. consented to the entry of an Order. The Order found that Brandstatter was permanentlyenjoined by the United States District Court for the Northern District of California from future violations of Section lOeb) of the Exchange Act, Rule 10b-5 thereunder. and Section l7(a) of the Securities Act of 1933.
In her Offer of Settlement. Brandstatter. without admitting or denying any of the matters set forth in the Order, consented to a permanent bar from association with any broker. dealer, municipal securities dealer, investment adviser or investment company. (Rels. 33-7016; 34-32953)
ADMINISTRATIVE PROCEEDINGS INSTITUTED. FINDINGS HADE AND SANCTIONS IMPOSED AGAINST JAIME GOMEZ
The Commission has instituted administrative proceedings. made findings and impose,sanctions against Jaime Gomez (Gomez) of Miramar, Florida. Gomez was formerly the president. sole shareholder and a general securities principal of Guardian International Securities. Inc. (Guardian). a registered broker-dealer Which ceased operations in November 1991. The Commission has accepted an Offer of Settlement (Offer) submitted by Gomez.
The Order Making Findings and Imposing Remedial Sanctions (Order) contains findingsthat Gomez willfully aided and abetted violations of Sections l5(c). 17(&) and 17(b) of the Securities Exchange Act of 1934 and Rules 15c3-1, 17a-3. 17a-5 and 17a-11. thereunder. The Order also requires Gomez to cease and desist from committing or causing a violation ~r future violation of these provisions.
In accordance with the Offer, the Commission issued an Order barring Gomez from association with any broker, dealer, municipal securities dealer. investment companyor investment adviser. (Rel. 34-32954)
KHALSA FINANCIAL SERVICES, INC., GURUJOT KHALSA AND DARSHAN KHALSA SANCTIONED
The Commission instituted administrative proceedings, made findings and imposedsanctions against Khalsa Financial Services. Inc. (Khalsa). a registered investment adviser, Gurujot Singh Khalsa (Gurujot). Khalsa's president. and Darshan Singh Khalsa (Darshan), Khalsa's vice-president. The findings and sanctions were in accordance with Offers of Settlement submitted by the Respondents whereby they consented to the Order, without admitting or denying the findings therein.
NEWS DIGEST, October 1, 1993 2
Pursuant to the Order and Offers, the Commission found that the Respondents violated the antifraud provisions of the Investment Advisers Act of 1940 by causing Khalsa to pool client funds in a money market account and falsely represent to clients that their funds were invested in wTime Deposits.w In fact, the Respondents used client funds to make undisclosed loans to companies which they controlled and to repay loans to those companies. The Commission also found that the Respondents violated certain of the book and recordkeeping provisions of the Advisers Act. Previously, Khalsa, Gurujot and Darshan consented to permanent injunctions in the Commission's civil action based upon similar allegations (See LR-13498).
The Commission's Order revokes Khalsa's registration as an investment adviser and bars Gurujot and Darshan from association with any broker, dealer, municipal securities dealer, investment company or investment adviser. [ReI. IA-1383]
CIVIL PROCBBDI.G8
PERMANENT INJUNCTION AND CIVIL PENALTIES AGAINST ORACLE SYSTEMS CORPORATION
The Commission today announced that on September 24 a complaint was filed in the Northern District of California seeking injunctive relief and civil penalties against Oracle Systems Corporation (Oracle) alleging that Oracle committed violations of Sections l3(a), l3(b)(2)(A) and 13(b)(2)(B) of the Securities Exchange Act of 1934 (Exchange Act) and Rules l2b-20, l3a-l and 13a-13 promulgated thereunder. The Commission's complaint alleges that Oracle filed with the Commission reports that included financial statements which materially misstated revenues, net income and related captioned line items for the periods ended August 31, 1989 through November 30, 1990.
The complaint alleges that Oracle's materially inaccurate financial reports resulted from an inadequate internal accounting control system that failed to detect double invoicing of customers for products and/or technical support services, invoicing of customers for work that was not performed, failure to credit customers for productreturns, booking revenues that were contingent and premature recognition of other revenue. The complaint further alleges that, as a result, Oracle failed to maintain accurate books and records as required under the federal securities laws.
Simultaneous with the filing of the complaint and without admitting or denying the Commission'S allegations, Oracle consented to the entry of a permanent injunctionprohibiting future violations of Sections l3(a). l3(b)(2)(A) and 13(b)(2)(B) and Rules 12b-20. 13a-l and 13a-13 and to the entry of an order imposing civil penalties pursuant to Exchange Act Section 2l(d) in the amount of $100,000. The civil penalties were imposed in connection with the two periodic filings that occurred after October 15, 1990, the effective date of the Securities Enforcement Remedies and Penny Stock Reform Act of 1990. [SEC v. Oracle Systems Corporation, Civil Action No. C93 3517 DLJ, N.D. Cal.] (LR-13808)
NEWS DIGEST, October 1, 1993 3
ORDER ISSUED AGAINST DAVID KING
The Commission announced that on September 16 the Honorable Edward F. Harrington,
U.S. District Judge for the District of Massachusetts, issued a Final Judgment of Permanent Injunction against David A. King (King) and King Capital Corporation (KCC).The defendants, who consented to relief without admitting or denying the Commission's allegations, vere enjoined from further violations of the registration and antifraud provisions of the securities lavs.
The complaint alleged that the defendants engaged in the fraudulent offer and sale of unregistered securities. These securities were interests in an investment poolthat vas developed and managed by another individual who, at all times relevant to the complaint, vas barred by an Order of the Commission from association with anybroker or dealer, investment company, investment adviser or municipal securities dealer. In connection vith the offer and sale of these securities, King and KCC allegedly misrepresented the risks, liquidity and nature of the investment to potential investors. [SEC v. David A. King and King Capital Corporation, Docket Number 93-12025H, D. Mass] (LR-13809)
ROBERT DOVIAK, II, ENJOINED AND SPECIAL MASTER APPOINTED
The Commission announced that on September 15 an Order of Permanent Injunction vas entered by consent against Robert F. Doviak, II, (Doviak) enjoining him from future violations of the antifraud provisions of the federal securities laws, and aiding and abetting violations of the net capital, book and record keeping, and notice provisions of the federal securities lavs. A Special Master was appointed to take possesaionof Doviak's assets and prepare a plan of liquidation and distribution.
The Commission's complaint alleges that Doviak raised over $4 million in salea of limited partnership interests, diverting over $1 million either to himself or to fund the broker-dealer he controlled. The complaint also alleges that he aided and abetted that broker-dealer's violations of the net capital, book and record keeping, and notice provisions of the securities laws. [SEC v. Robert F. Doviak, II, et al.,3:93CV0444, USDC/ND TX, Dallas Division] (LR-13810)
YAKIMA RESIDENT NAKED IN INJUNCTION ACTION
The Commission announced that on September 22 a complaint was filed in U.S. District Court for the Eastern District of Vashington against Michael H. Veiss of Yakima,Vashington. The c~mp1aint alleges Veiss violated the antifraud and registrationprovisions of the Securities Act of 1933, the Securities Exchange Act of 1934 and the Investment Advisers Act of 1940 by making misrepresentations of material facta,omitting to disclose material facts, and engaging in a scheme to defraud in connection vith the offer and sale of Northwest Premium Income Fund One Partnership interests and by failing to register with the Commission as a broker-dealer and as an investment adviser.
NEWS DIGEST, October 1, 1993 4