UNITED STATES OF AMERICA Before the SECURITIES AND EXCHANGE COMMISSION SECURITIES ACT OF 1933 Release No. 7559 / July 30, 1998 SECURITIES EXCHANGE ACT OF 1934 Release No. 40282 / July 30, 1998 ADMINISTRATIVE PROCEEDING File No. 3-9662 : In the Matter of : AmeriVision Communications, Inc. : ORDER INSTITUTING PUBLIC Hebron Communications Corp. : CEASE-AND-DESIST PROCEEDINGS, Tracy C. Freeny and : MAKING FINDINGS AND IMPOSING Carl D. Thompson, : A CEASE-AND-DESIST ORDER Respondents : : I. The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest that public cease-and- desist proceedings be, and hereby are, instituted pursuant to Section 8A of the Securities Act of 1933 ("Securities Act") and Section 21C of the Securities Exchange Act of 1934 ("Exchange Act") against AmeriVision Communications, Inc. ("AVC"), Hebron Communications Corporation ("Hebron"), Tracy C. Freeny ("Freeny") and Carl D. Thompson ("Thompson"). In anticipation of the institution of this proceeding, AVC, Hebron, Freeny and Thompson have submitted Offers of Settlement ("Offers") to the Commission, which the Commission has determined to accept. 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 Section II.A. through D., and the jurisdiction of the Commission over them in this matter, which are admitted, AVC, Hebron, Freeny and Thompson consent to the issuance of this Order Instituting Public Cease-and-Desist Proceedings, Making Findings and Imposing a Cease-and-Desist Order ("Order"), and to the entry of the findings set forth below. II. On the basis of this Order and the Offers submitted by AVC, Hebron, Freeny and Thompson, the Commission finds that: A.AmeriVision Communications, Inc. ("AVC") is an Oklahoma corporation with its principal offices in Oklahoma City, Oklahoma. AVC provides long distance telephone and telecommunications services to residential and commercial customers throughout the United States. B.Hebron Communications Corporation ("Hebron") is a Florida corporation with its principal offices in Oklahoma City, Oklahoma. Hebron acquires and supplies telecommunication switches for AVC and other long distance re-sellers. C.Tracy C. Freeny ("Freeny"), age 52, is a resident of Edmond, Oklahoma, and since March 1991 has served as president, chief financial officer and chairman of the board of directors of AVC. In December 1995, he co-founded Hebron and served as an officer and a director until his resignation in November 1996. One of Freeny's primary responsibilities was to direct the offer and sale of AVC's securities and, on occasion, Hebron's securities to the public, including communicating with prospective investors and preparation of securities offering materials. D.Carl D. Thompson ("Thompson"), age 48, is a resident of Edmond, Oklahoma, and was a director, secretary and senior vice president of AVC from March 1991 until April 1998. In December 1995, he co-founded Hebron and served as an officer and a director until his resignation in November 1996. In addition to overseeing the day-to-day operations of AVC, Thompson assisted Freeny in preparing the offering materials that were provided to prospective investors of AVC and Hebron. E.From September 1991 to December 1996, AVC raised nearly $12 million through the offer and sale of unregistered securities to investors throughout the United States. These securities, consisting of common stock and notes convertible to common stock, were offered continuously for the purpose of funding AVC's current operations. F.From November 1995 to December 1996, AVC raised an additional $4.6 million through the sale of securities called "Advanced Payment Loan Program" notes. G.From December 1995 to December 1996, Hebron raised approximately $4.6 million through the sale of common stock. H.Because of the amount raised in the above-described offerings and the fact that the offerings were made through general solicitations, among other reasons, the sale of these securities did not qualify for any exemption from the Securities Act registration provisions. Accordingly, in making these sales AVC, Hebron, Freeny and Thompson violated Sections 5(a) and 5(c) of the Securities Act. I.From October 1991 through July 1996, Freeny sold approximately 25,000 shares of restricted AVC stock to the public. From October 1991 through July 1996, Thompson sold approximately 13,575 shares of restricted AVC stock to the public. These sales did not fall within the safe harbor afforded by Rule 144 of the Securities Act. Thus, in making these sales Freeny and Thompson acted as underwriters within the meaning of Section 2(a)(11) of the Securities Act, and the sales were not exempt from the Securities Act registration provisions. Accordingly, Freeny and Thompson violated Sections 5(a) and 5(c) of the Securities Act. J.By December 31, 1994, AVC had over 1,000 shareholders and over $10 million in assets and was obligated to register its equity securities with the Commission pursuant to Section 12(g) of the Exchange Act and Rule 12g-1 thereunder. However, AVC has not filed such a registration statement with respect to its equity securities. Accordingly, AVC is violating Section 12(g) of the Exchange Act and Rule 12g-1 thereunder. Freeny and Thompson, due to an act or omission which they knew or should have known would contribute to the violation, caused the violation. III. In view of the foregoing, the Commission deems it appropriate and in the public interest to accept the Offers and impose the sanctions, as specified in the Offers. Accordingly, IT IS HEREBY ORDERED pursuant to Section 8A of the Securities Act and Section 21C of the Exchange Act that: A.AVC cease and desist from committing or causing any violations, and any future violations, of Sections 5(a) and 5(c) of the Securities Act and Section 12(g) of the Exchange Act and Rule 12g-1 thereunder; B.Hebron cease and desist from committing or causing any violations, and any future violations, of Sections 5(a) and 5(c) of the Securities Act; Tracy C. Freeny cease and desist from committing or causing any violations, and any future violations, of Sections 5(a) and 5(c) of the Securities Act and Section 12(g) of the Exchange Act and Rule 12g-1 thereunder; and Carl D. Thompson cease and desist from committing or causing any violations, and any future violations, of Sections 5(a) and 5(c) of the Securities Act and Section 12(g) of the Exchange Act and Rule 12g-1 thereunder. By the Commission. Jonathan G. Katz Secretary SERVICE LIST Rule 141 of the Commission's Rules of Practice provides that the Secretary of the Commission, or another duly authorized officer of the Commission, shall serve a copy of the Order Instituting Public Cease-and-Desist Proceedings, Making Findings and Imposing a Cease-and-Desist Order on each person named as a party in the order and their legal agent. The attached Order Instituting Public Cease-and-Desist Proceedings, Making Findings and Imposing a Cease-and-Desist Order has been sent to the following parties and other parties entitled to notice: ----------------------------------------------------------------- Honorable Brenda P. Murray Chief Administrative Law Judge Securities and Exchange Commission 450 5th St., N.W., STOP: 11-6 Washington, DC 20549 Jon Batterman Securities and Exchange Commission Division of Enforcement STOP: 8-9 450 Fifth Street, N.W. Washington, DC 20549 Harold F. Degenhardt District Director Securities and Exchange Commission 801 Cherry St., 19th Floor Fort Worth, TX 76102 Wallis M. Hampton, Esq. David M. Bond, Esq. Vinson & Elkins L.L.P. 2300 First City Tower 1001 Fannin Street Houston, Texas 77002-6760 Counsel for Respondents Freeny, Thompson, Amerivision Communications, Inc., and Hebron Communications Corp. Tracy C. Freeny 6220 North Bryant Edmond, Oklahoma 73034 Carl D. Thompson 1905 Ridgecrest Road Edmond, Oklahoma 73013 Tracy C. Freeny, President AmeriVision Communications, Inc. 3141 N.W. Expressway, Suite 101 Oklahoma City, OK 73112-4143 John E. Telling, President Hebron Communications Corp. 3141 N.W. Expressway, Suite 701 Oklahoma City, OK 73112