UNITED STATES OF AMERICA Before the SECURITIES AND EXCHANGE COMMISSION SECURITIES ACT OF 1933 Release No. 7682 / May 13, 1999 SECURITIES EXCHANGE ACT OF 1934 Release No. 41398 / May 13, 1999 ADMINISTRATIVE PROCEEDING File No. 3-9648 : In the Matter of : : Order Making Findings Robert G. Bettiga, : and Imposing Remedial : Sanctions, and Order to Respondent. : Cease and Desist : I. In these proceedings instituted pursuant to Section 8A of the Securities Act of 1933 ("Securities Act") and Sections 15(b), 19(h) and 21C of the Securities Exchange Act of 1934 ("Exchange Act"), Respondent Robert G. Bettiga ("Bettiga"), pursuant to Rule 240 of the Rules of Practice of the Securities and Exchange Commission, has submitted an Offer of Settlement ("Offer") which the Commission has determined to accept. [1] Solely for the purposes of this proceeding and any other proceeding brought by or on behalf of the Commission or in which the Commission is a party, prior to a hearing pursuant to the Commission's Rules of Practice, 17 C.F.R. § 201.100 et seq., and, without admitting or denying the findings contained herein, except those contained in Sections II A. and B., and the jurisdiction of the Commission over him in this matter, which are admitted, Bettiga consents to the issuance of this Order Making Findings and Imposing Remedial Sanctions, and Order to Cease and Desist ("Order"). II. On the basis of Bettiga's Offer and this Order, the Commission finds as follows: A. From June 18, 1985 to May 30, 1996, Bluebonnet Securities, Inc. ("Bluebonnet") (File No. 8-34073), located in Austin, Texas, was registered with the Commission as a broker-dealer pursuant to Section 15(b) of the Exchange Act. B. During the period from June 1989 through November 1995, Bettiga, a resident of Corpus Christi, Texas, was a registered representative with Bluebonnet. C. During the period from at least November 1993 until May 1995, Bettiga willfully violated Sections 5(a), 5(c) and 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, as more fully described in paragraphs D and E below. D. From at least November 1993 through May 1995, Bettiga offered and sold to his customers a high-risk, speculative security called a trust participation. Bettiga sold this security to his customers without regard for their investment needs or objectives. In these offers and sales, Bettiga misrepresented the high-risk, speculative nature of this investment to his customers; he also failed to consistently provide offering memoranda to customers, which would have disclosed the risk. Bettiga also evaded the financial eligibility requirements of the offerings by submitting false statements of net worth for customers who did not otherwise qualify to purchase this security. In many instances, contrary to his customers' investment objectives, Bettiga recommended multiple purchases of this security, and other high-risk securities, which caused an over concentration of high-risk, speculative securities in his customers' accounts. E. Bettiga's submission of false statements of net worth contributed to over 35 non-accredited investors purchasing the securities discussed in paragraph II.D. above in an unregistered offering, which relied upon an exemption from registration pursuant to Rule 506 of Regulation D. Furthermore, no other exemption from registration was applicable. F. Bettiga has submitted a sworn financial statement and other evidence and has asserted his financial inability to pay the full disgorgement amount plus prejudgment interest, or a civil penalty, except for $5,000. The Commission has reviewed the sworn financial statement and other evidence provided by Bettiga and has determined that Bettiga does not have the financial ability to pay the total disgorgement amount of $50,340, plus prejudgment interest, or a civil penalty, except for $5,000. III. In view of the foregoing, the Commission deems it appropriate and in the public interest to impose the sanctions that are set forth in the Offer submitted by Bettiga. Accordingly, IT IS ORDERED that: A. Bettiga be, and hereby is, barred from association with any broker, dealer, municipal securities dealer, investment adviser or investment company, and ordered to cease and desist from committing or causing any violation and any future violation of Sections 5(a) and (c) and 17(a) of the Securities Act, and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder; B. Bettiga shall pay disgorgement of $50,340 plus prejudgment interest, provided that payment of all but $5,000 of such amount is waived due to his demonstrated financial inability to pay the full amount. C. Bettiga shall, within 60 days of the entry of this Order, pay disgorgement in the amount of $5,000 to the United States Treasury. Such payment shall be: (A) made by United States postal money order, certified check, bank cashier's check or bank money order; (B) made payable to the Securities and Exchange Commission; (C) hand-delivered or mailed to the Comptroller, Securities and Exchange Commission, Operations Center, 6432 General Green Way, Stop 0-3, Alexandria, VA 22312; and (D) submitted under cover letter that identifies Bettiga as a respondent in these proceedings, and the file number of these proceedings, a copy of which cover letter and money order or check shall be sent to Harold F. Degenhardt, the District Administrator of the Fort Worth District Office, Securities and Exchange Commission, 801 Cherry Street, Suite 1900, Fort Worth Texas 76102. D. The Division of Enforcement ("Division") may, at any time following the entry of this Order, petition the Commission to: 1) reopen this matter to consider whether Bettiga provided accurate and complete financial information at the time such representations were made; 2) determine the amount of the civil penalty to be imposed; and 3) seek any additional remedies that the Commission would be authorized to impose in this proceeding if Bettiga's offer of settlement had not been accepted. No other issues shall be considered in connection with this petition other than whether the financial information provided by Bettiga was fraudulent, misleading, inaccurate or incomplete in any material respect and whether any additional remedies should be imposed. Bettiga may not, by way of defense to any such petition, contest the findings in this Order or the Commission's authority to impose any additional remedies that were available in the original proceeding. By the Commission. Jonathan G. Katz Secretary **FOOTNOTES** [1]: An Order Instituting Public Administrative and Cease-and-Desist Proceedings against Bettiga was issued by the Commission on July 9, 1998.