![]() ![]() ![]() The finder's fees that Snow received from Naxos created a conflict of interest that should have been disclosed in EEI's securities recommendations. Section 206(2) prohibits an investment adviser from engaging in any transaction, practice, or course of business which operates as a fraud or deceit upon any client or prospective client. By virtue of the conduct described above, EEI willfully violated and Snow caused and willfully aided and abetted violations of Section 206(2) of the Advisers Act. Such disclosure, however, did not appear in other reports recommending the purchase of securities that EEI through Snow distributed between February 1996 and March 1998, in particular, the reports recommending securities of Naxos and Solv-Ex. EEI's Form ADV filed in 1992, its initial report on Naxos dated February 1, 1995, and some of its reports recommending securities, contained general disclosure that EEI may have a position in and may buy or sell securities it recommends at any time. Moreover, EEI and Snow never amended EEI's Form ADV to disclose such information. EEI made no disclosure in any reports recommending securities to clients or prospective clients with respect to the receipt or possible receipt by EEI or a related person of finder's fees or other compensation from issuers, the securities of which EEI recommended. Between January 30 and March 13, 1996, Snow purchased 2,300 shares of Solv-Ex stock on the open market.į. In 1995, Snow accumulated in excess of 130,000 shares of Naxos stock through private placement and market purchases. Snow bought and sold Naxos and Solv-Ex stock during the period that EEI recommended those stocks to its clients. Further, on March 28, 1995, Naxos issued to Snow a two-year option for 50,000 shares of Naxos stock in exchange for Snow's agreement to introduce the company to investors.Į. Between April 1995 and August 1997, Snow introduced investors to Naxos who invested a total of $528,803. On March 1, 1995, Naxos, a Canadian public company, contracted to pay Snow a finder's fee equal to five percent of funds invested by persons Snow introduced to Naxos who participated in a private placement or other new financing. EEI sends the reports directly to its clients, most of whom are institutional investors, such as mutual funds and money managers.ĭ. ("Naxos") and Solv-Ex Corporation ("Solv-Ex"). ![]() These reports included reports recommending the purchase of the securities of Naxos Resources Ltd. Since 1996, EEI has written and published approximately 50 analyst reports covering at least 13 issuers, most of whom are involved in the oil, mineral, and mining industries. Snow is a resident of Wayne, New Jersey, and is the president and sole owner and employee of EEI.Ĭ. On June 1, 1998, EEI withdrew its federal registration pursuant to Section 203(h) of the Advisers Act and Rule 203-2 thereunder.ī. 801-41472), a New Jersey corporation, was registered as an investment adviser under the federal securities laws between May 1992 and June 1, 1998. On the basis of this Order and the Offer submitted by Respondents, the Commission finds that:Ī. Solely for the purpose of these proceedings and any other proceedings brought by or on behalf of the Commission or in which the Commission is a party, and without admitting or denying the findings herein, except that Respondents admit the Commission's jurisdiction over them and over the subject matter of these proceedings, Respondents have consented to the entry of the findings and the imposition of the remedial sanctions and cease-and-desist order as set forth below. In anticipation of the institution of these administrative proceedings, Respondents have submitted a joint Offer of Settlement ("Offer"), which the Commission has determined to accept. The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest that public administrative and cease-and-desist proceedings be instituted pursuant to Sections 203(e), 203(f) and 203(k) of the Investment Advisers Act of 1940 ("Advisers Act") against Respondents Energy Equities, Inc. ORDER INSTITUTING PROCEEDDINGS PURSUANT TO SECTIONS 203(e), 203(f) AND 203(k) OF THE INVESTMENT ADVISERS ACT OF 1940, MAKING FINDINGS, AND IMPOSING REMEDIAL SANCTIONS AND A CEASE-AND-DESIST ORDER ![]()
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