UNITED STATES OF AMERICA Before the SECURITIES AND EXCHANGE COMMISSION SECURITIES EXCHANGE ACT OF 1934 Release No. 55627 / April 12, 2007 Administrative Proceeding File No. 3-11524 ____________________________________ : In the Matter of : Order Directing : Disbursement of Fair Fund PILGRIM BAXTER & : ASSOCIATES, LTD., : : Respondent. : ____________________________________: On June 30, 2006, the Securities and Exchange Commission (the “Commission”) published a proposed Plan of Distribution and issued a Notice of Proposed Distribution Plan and Opportunity for Comment (Exchange Act Release No. 54073) pursuant to Rule 1103 of the Fair Fund Rules, 17 C.F.R. § 201.1103 (the “Notice”). The Commission received comments and, on November 22, 2006, the Commission approved the proposed Plan of Distribution as modified (Exchange Act Release No. 54812). The Plan provides that a Fair Fund consisting of $250,000,000 in disgorgement and civil penalties, plus any accrued interest, less any amounts necessary to pay taxes due on Fair Fund earnings be transferred in increments to Deutsche Bank Trust Company Americas (the “Bank”) to be distributed to injured investors according to the methodology set forth in the Plan. The Plan provides that the Commission will arrange for distribution of the Fair Fund in tranches when a Payment File listing the payees with the identification information required to make the distribution has been received and accepted for each tranche. The Payment File for the first tranche has been received and accepted. Accordingly, it is ORDERED that the Commission shall transfer for the first tranche $124,999,781.40 of the Fair Fund to the Bank and the Plan Administrator shall distribute to investors, as provided for in the Plan of Distribution. For the Commission, by its Secretary, pursuant to delegated authority. Nancy M. Morris Secretary
34-55626 Apr. 12, 2007 Commonwealth Growth Fund II, Medical Asset Management, Inc., NexTech Enterprises International, Inc., Pentagenic Pharmaceuticals, Inc., and Star Tech Health Services, Inc. Note: See also the Order in this matter http://www.sec.gov/litigation/admin/2007/34-55626.pdf
U.S. SECURITIES AND EXCHANGE COMMISSION SECURITIES EXCHANGE ACT OF 1934 Release No. 55626 / April 12, 2007 Administrative Proceeding File No. 3-12617 In the Matter of Commonwealth Growth Fund II, Medical Asset Management, Inc., NexTech Enterprises International, Inc., Pentagenic Pharmaceuticals, Inc., and Star Tech Health Services, Inc. SECURITIES AND EXCHANGE COMMISSION INSTITUTES ADMINISTRATIVE PROCEEDINGS AGAINST FIVE COMPANIES FOR FAILURE TO MAKE REQUIRED PERIODIC FILINGS The U.S. Securities and Exchange Commission today instituted public administrative proceedings against the following five companies to determine whether the registration of each class of their securities should be revoked or suspended for a period not exceeding twelve months for failure to file required periodic reports: • Commonwealth Growth Fund II • Medical Asset Management, Inc. • NexTech Enterprises International, Inc. • Pentagenic Pharmaceuticals, Inc. • Star Tech Health Services, Inc. In this Order, the Division of Enforcement (Division) alleges that the five issuers are delinquent in their required periodic filings with the Commission. In these proceedings, instituted pursuant to Securities Exchange Act of 1934 (Exchange Act) Section 12(j), a hearing will be scheduled before an Administrative Law Judge. At the hearing, the judge will hear evidence from the Division and the respondents to determine whether the allegations of the Division contained in the Order, which the Division alleges constitute failures to comply with Exchange Act Section 13(a) and Rules 13a-1 and 13a-13 thereunder, are true. The judge in the proceeding will then determine whether the registrations pursuant to Exchange Act Section 12 of the securities of these respondents should be revoked or suspended for a period not exceeding twelve months. The Commission ordered that the Administrative Law Judge in these proceedings issue an initial decision not later than 120 days from the date of service of the order instituting proceedings.
UNITED STATES OF AMERICA before the SECURITIES AND EXCHANGE COMMISSION SECURITIES EXCHANGE ACT OF 1934 Release No. 55623 / April 12, 2007 ACCOUNTING AND AUDITING ENFORCEMENT Release No. 2596 / April 12, 2007 ADMINISTRATIVE PROCEEDING File No. 3-12616 : : : In the Matter of : ORDER INSTITUTING ADMINISTRATIVE : PROCEEDINGS PURSUANT TO RULE LESLEY DON COLE (CPA), : 102(e) OF THE COMMISSION’S RULES OF : PRACTICE, MAKING FINDINGS, AND Respondent. : IMPOSING REMEDIAL SANCTIONS : : ____________________________________ : I. The Securities and Exchange Commission (“Commission”) deems it appropriate and in the public interest that public administrative proceedings be, and hereby are, instituted against Lesley Don Cole (“Respondent” or “Cole”) pursuant to Rule 102(e)(3)(i) of the Commission’s Rules of Practice.1 1 Rule 102(e)(3)(i) provides, in relevant part, that: The Commission, with due regard to the public interest and without preliminary hearing, may, by order, . . . suspend from appearing or practicing before it any . . . accountant . . . who has been by name . . . permanently enjoined by any court of competent jurisdiction, by reason of his or her misconduct in an action brought by the Commission, from violating or aiding and abetting the violation of any provision of the Federal securities laws or of the rules and regulations thereunder. 2 II. In anticipation of the institution of these proceedings, Respondent has submitted an Offer of Settlement (the “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 herein, except as to the Commission’s jurisdiction over him and the subject matter of these proceedings, and the findings contained in Section III.3. below, which are admitted, Respondent consents to the entry of this Order Instituting Administrative Proceedings Pursuant to Rule 102(e) of the Commission’s Rules of Practice, Making Findings, and Imposing Remedial Sanctions (“Order”), as set forth below. III. On the basis of this Order and Respondent’s Offer, the Commission finds that: 1. Cole, age 46, of Roland, Arkansas, was employed as an audit partner with Moore Stephens Frost, PLC (“Moore Stephens”) from approximately December 1989 until April 2003. Cole is currently a partner with Huffman Webb Smith & Cole, PLC, an accounting firm located in Little Rock, Arkansas. Cole is licensed as a CPA in Arkansas, Alabama, and Georgia. He registered as a CPA in Oklahoma. 2. At all relevant times, UCAP was a Colorado corporation with its principal place of business in Aurora, Colorado. UCAP operated a mortgage banking business until it ceased operations on approximately April 30, 2004. UCAP’s common stock was registered with the Commission pursuant to Section 12(g) of the Securities Exchange Act of 1934 (“Exchange Act”) from 1996 through August 23, 2005, and the company was required to file reports with the Commission on Forms 10-KSB and 10-QSB. At all relevant times, UCAP’s common stock traded in the Pink Sheets (on www.pinksheets.com, a service of Pink Sheets LLC). On August 23, 2005, the Commission revoked UCAP’s securities registration pursuant to Section 12(j) of the Exchange Act. 3. On _______, 2006, the Commission filed a complaint against Cole in SEC v. Jimmy Lynn Bradley, et al., Civil Action No. 06-____, United States District Court for the District of Colorado. On ____, 2006, the court entered an order permanently enjoining Cole, by consent, from future violations of Section 10(b) of the Exchange Act and Rules 10b-5 and 13b2-1 thereunder, and from aiding and abetting violations of Sections 13(a) and 13(b)(2)(A) of the Exchange Act and Rules 12b-20 and 13a-1 thereunder. The court further ordered that Cole pay a $25,000 civil penalty. 4. The Commission’s complaint alleged, among other things, that Cole knowingly allowed UCAP fraudulently to overstate revenue by recording only half of a revenue adjustment necessary to make UCAP’s financial statements comply with generally accepted accounting principles (“GAAP”) and to overstate the value of real estate. Together, these actions enabled UCAP to meet falsely a key financial covenant required to save the company’s sole line of 3 credit. Additionally, the Commission’s complaint alleged that Cole knowingly allowed UCAP to record revenue from a real estate transaction with a related party and fail to record an expense for a settlement agreement between UCAP and a third party. Some of the terms and conditions of the settlement agreement were contained in UCAP’s 2002 Form 10-KSB, but the financial statements did not contain an accrual for the liability. Moreover, the Commission’s complaint alleged that Cole caused Moore Stephens to issue an unqualified audit report, falsely stating that the audit had been performed in accordance with generally accepted auditing standards, and that the financial statements were free of material misstatements and were presented in conformity with GAAP. As a result, UCAP’s financial statements for the annual period ended September 30, 2002 understated the company’s pre-tax net loss by over $1.8 million, or 26 percent, and were therefore false and misleading. IV. In view of the foregoing, the Commission deems it appropriate and in the public interest to impose the sanction agreed to in Respondent Cole’s Offer. Accordingly, it is hereby ORDERED, effective immediately, that: A. Cole is suspended from appearing or practicing before the Commission as an accountant. B. After five years from the date of this order, Respondent may request that the Commission consider his reinstatement by submitting an application (attention: Office of the Chief Accountant) to resume appearing or practicing before the Commission as: 1. a preparer or reviewer, or a person responsible for the preparation or review, of any public company’s financial statements that are filed with the Commission. Such an application must satisfy the Commission that Respondent’s work in his practice before the Commission will be reviewed either by the independent audit committee of the public company for which he works or in some other acceptable manner, as long as he practices before the Commission in this capacity; and/or 2. an independent accountant. Such an application must satisfy the Commission that: (a) Respondent, or the public accounting firm with which he is associated, is registered with the Public Company Accounting Oversight Board (“Board”) in accordance with the Sarbanes-Oxley Act of 2002, and such registration continues to be effective; (b) Respondent, or the registered public accounting firm with which he is associated, has been inspected by the Board and that inspection did not identify any criticisms of or potential defects in the Respondent’s or the firm’s quality control system that would indicate that the Respondent will not receive appropriate supervision; 4 (c) Respondent has resolved all disciplinary issues with the Board, and has complied with all terms and conditions of any sanctions imposed by the Board (other than reinstatement by the Commission); and (d) Respondent acknowledges his responsibility, as long as Respondent appears or practices before the Commission as an independent accountant, to comply with all requirements of the Commission and the Board, including, but not limited to, all requirements relating to registration, inspections, concurring partner reviews and quality control standards. C. The Commission will consider an application by Respondent to resume appearing or practicing before the Commission provided that his state CPA license is current and he has resolved all other disciplinary issues with the applicable state boards of accountancy. However, if state licensure is dependant on reinstatement by the Commission, the Commission will consider an application on its other merits. The Commission’s review may include consideration of, in addition to the matters referenced above, any other matters relating to Respondent’s character, integrity, professional conduct, or qualifications to appear or practice before the Commission. By the Commission. Nancy M. Morris Secretary
UNITED STATES OF AMERICA before the SECURITIES AND EXCHANGE COMMISSION SECURITIES EXCHANGE ACT OF 1934 Release No. 55622 / April 12, 2007 ACCOUNTING AND AUDITING ENFORCEMENT Release No. 2595 / April 12, 2007 ADMINISTRATIVE PROCEEDING File No. 3-12615 : : : In the Matter of : ORDER INSTITUTING ADMINISTRATIVE : PROCEEDINGS PURSUANT TO RULE JIMMY LYNN BRADLEY (CPA), : 102(e) OF THE COMMISSION’S RULES OF : PRACTICE, MAKING FINDINGS, AND Respondent. : IMPOSING REMEDIAL SANCTIONS : : ____________________________________ : I. The Securities and Exchange Commission (“Commission”) deems it appropriate and in the public interest that public administrative proceedings be, and hereby are, instituted against Jimmy Lynn Bradley (“Respondent” or “Bradley”) pursuant to Rule 102(e)(3)(i) of the Commission’s Rules of Practice.1 1 Rule 102(e)(3)(i) provides, in relevant part, that: The Commission, with due regard to the public interest and without preliminary hearing, may, by order, . . . suspend from appearing or practicing before it any . . . accountant . . . who has been by name . . . permanently enjoined by any court of competent jurisdiction, by reason of his or her misconduct in an action brought by the Commission, from violating or aiding and abetting the violation of any provision of the Federal securities laws or of the rules and regulations thereunder. 2 II. In anticipation of the institution of these proceedings, Respondent has submitted an Offer of Settlement (the “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 herein, except as to the Commission’s jurisdiction over him and the subject matter of these proceedings, and the findings contained in Section III.3. below, which are admitted, Respondent consents to the entry of this Order Instituting Administrative Proceedings Pursuant to Rule 102(e) of the Commission’s Rules of Practice, Making Findings, and Imposing Remedial Sanctions (“Order”), as set forth below. III. On the basis of this Order and Respondent’s Offer, the Commission finds that: 1. Bradley, age 44, is a resident of Katy, Texas. At all relevant times, he was a certified public accountant (“CPA”) licensed in Arkansas. Bradley served as chief financial officer of UCAP, Inc. (“UCAP”) from approximately March 2001 through May 2003 and again from October 2003 through April 2004. Bradley also served as a UCAP director from October 30, 2003 through April 20, 2004. 2. At all relevant times, UCAP was a Colorado corporation with its principal place of business in Aurora, Colorado. UCAP operated a mortgage banking business until it ceased operations on approximately April 30, 2004. UCAP's common stock was registered with the Commission pursuant to Section 12(g) of the Securities Exchange Act of 1934 (“Exchange Act”) from 1996 through August 23, 2005, and the company was required to file reports with the Commission on Forms 10-KSB and 10-QSB. At all relevant times, UCAP’s common stock traded in the Pink Sheets (on www.pinksheets.com, a service of Pink Sheets LLC). On August 23, 2005, the Commission revoked UCAP’s securities registration pursuant to Section 12(j) of the Exchange Act. 3. On ______, 2006, the Commission filed a complaint against Bradley in SEC v. Jimmy Lynn Bradley, et al., Civil Action No. 06-____, United States District Court for the District of Colorado. On ______, 2006, the court entered an order permanently enjoining Bradley, by consent, from future violations of Sections 10(b) and 13(b)(5) of the Exchange Act and Rules 10b-5, 13a-14 and 13b2-1 thereunder, and from aiding and abetting violations of Sections 13(a) and 13(b)(2) of the Exchange Act and Rules 12b-20 and 13a-1 thereunder. The court further ordered that Bradley be barred from acting as an officer or director of any issuer that has a class of securities registered pursuant to Section 12 of the Exchange Act or that is required to file reports pursuant to Section 15(d) of the Exchange Act. 4. The Commission’s complaint alleged, among other things, that Bradley knowingly allowed UCAP fraudulently to overstate revenue by recording only half of a revenue adjustment necessary to make UCAP’s financial statements comply with generally accepted accounting 3 principles (“GAAP”) and to overstate the value of real estate. Together, these machinations enabled UCAP to meet falsely a key financial covenant required to save the company’s sole line of credit. Additionally, Bradley knowingly allowed UCAP to record revenue from a real estate transaction with a related party and fail to record an expense for a settlement agreement between UCAP and a third party. Moreover, on January 15, 2003, Bradley certified falsely UCAP’s 2002 Form 10-KSB and filed it with the Commission. As a result, UCAP’s financial statements for the annual period ended September 30, 2002 understated the company’s pre-tax net loss by over $1.8 million, or 26 percent, and were therefore false and misleading. IV. In view of the foregoing, the Commission deems it appropriate and in the public interest to impose the sanction agreed to in Respondent Bradley’s Offer. Accordingly, it is hereby ORDERED, effective immediately, that: A. Bradley is suspended from appearing or practicing before the Commission as an accountant. B. After five years from the date of this order, Respondent may request that the Commission consider his reinstatement by submitting an application (attention: Office of the Chief Accountant) to resume appearing or practicing before the Commission as: 1. a preparer or reviewer, or a person responsible for the preparation or review, of any public company’s financial statements that are filed with the Commission. Such an application must satisfy the Commission that Respondent’s work in his practice before the Commission will be reviewed either by the independent audit committee of the public company for which he works or in some other acceptable manner, as long as he practices before the Commission in this capacity; and/or 2. an independent accountant. Such an application must satisfy the Commission that: (a) Respondent, or the public accounting firm with which he is associated, is registered with the Public Company Accounting Oversight Board (“Board”) in accordance with the Sarbanes-Oxley Act of 2002, and such registration continues to be effective; (b) Respondent, or the registered public accounting firm with which he is associated, has been inspected by the Board and that inspection did not identify any criticisms of or potential defects in the Respondent’s or the firm’s quality control system that would indicate that the Respondent will not receive appropriate supervision; (c) Respondent has resolved all disciplinary issues with the Board, and has complied with all terms and conditions of any sanctions imposed by the Board (other than reinstatement by the Commission); and 4 (d) Respondent acknowledges his responsibility, as long as Respondent appears or practices before the Commission as an independent accountant, to comply with all requirements of the Commission and the Board, including, but not limited to, all requirements relating to registration, inspections, concurring partner reviews and quality control standards. C. The Commission will consider an application by Respondent to resume appearing or practicing before the Commission provided that his state CPA license is current and he has resolved all other disciplinary issues with the applicable state boards of accountancy. However, if state licensure is dependant on reinstatement by the Commission, the Commission will consider an application on its other merits. The Commission’s review may include consideration of, in addition to the matters referenced above, any other matters relating to Respondent’s character, integrity, professional conduct, or qualifications to appear or practice before the Commission. By the Commission. Nancy M. Morris Secretary
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