UNITED STATES OF AMERICA Before the SECURITIES AND EXCHANGE COMMISSION Securities Exchange Act of 1934 Release No. 41155 / March 11, 1999 Administrative Proceeding File No. 3-9848 __________________________ : In the Matter of : ORDER INSTITUTING ADMINISTRATIVE : PROCEEDINGS PURSUANT TO SECTION CHARLES STEMBER, : 15(b)(6) OF SECURITIES EXCHANGE : ACT OF 1934, MAKING FINDINGS AND : IMPOSING REMEDIAL SANCTIONS AS TO Respondent. : CHARLES STEMBER __________________________: I. The Commission is instituting these administrative proceedings pursuant to Section 15(b)(6) of the Securities Exchange Act of 1934 (the "Exchange Act") as to Charles Stember ("Stember"). II. Stember has submitted an Offer of Settlement (the "Offer") which the Commission has determined to accept. Solely for the purposes 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 contained in this Order, except as to jurisdiction which Stember admits, Stember consents to the entry of this Order by the Commission. III. On the basis of this Order and Stember’s Offer, the Commission makes the following findings:[1] A. In 1992, Stember was employed as a registered representative in the Denver office of RAF Financial Corporation, which was registered with the Commission as a broker-dealer. B. While so employed, Stember participated in a scheme whereby he sold substantial amounts of the common stock of Teletek, Inc. to his unsuspecting customers and received secret compensation from Teletek’s principal officer. In August 1992, Stember received $3,000 from such person through an intermediary in connection with sales of the stock. C. Section 17(a) of the Securities Act of 1933 (the "Securities Act") and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder prohibit any person from, in the offer or in connection with the purchase or sale of securities, by the use of means or instruments of transportation or communication in interstate commerce or by the use of the mails, directly or indirectly, employing devices, schemes or artifices to defraud; obtaining money or property by means of or making untrue statements of material facts or omitting to state material facts necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading; or engaging in transactions, acts, practices or courses of business which operate or would operate as a fraud or deceit. By engaging in the conduct specified in Paragraph III. B. above, Stember willfully violated Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder.[2] D. Stember has submitted a sworn financial statement and other evidence and has asserted his financial inability to pay disgorgement, prejudgment interest and a civil penalty and that the Commission has determined that Stember does not have the financial ability to pay disgorgement, prejudgment interest and a civil penalty. IV. In view of the foregoing, the Commission has determined that it is in the public interest to accept Stember’s Offer and to impose the sanctions specified therein. Accordingly, IT IS ORDERED that: A. Stember be and he is hereby barred from association with any broker, dealer, municipal securities dealer, investment adviser or investment company and from participating in any offering of penny stock. B. Stember pay disgorgement in the sum of $3,000 plus prejudgment interest, but that payment of such amount be waived based upon Stember’s demonstrated financial inability to pay. C. The Division of Enforcement may, at any time following the entry of this Order, petition the Commission to: (1) reopen this matter to consider whether Stember provided accurate and complete financial information at the time such representations were made; (2) determine the amount of the disgorgement, prejudgment interest and civil penalty to be imposed; and (3) seek any additional remedies that the Commission would be authorized to impose in this proceeding if Stember’s Offer had not been accepted. No other issues shall be considered in connection with this petition other than whether the financial information provided by Stember was fraudulent, misleading, inaccurate or incomplete in any material respect, the amount of disgorgement, prejudgment interest and civil penalty to be imposed and whether any additional remedies should be imposed. Stember 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]: The findings herein are made pursuant to Stember’s Offer and are not binding on any other person or entity in this or any other proceeding. [2]: Stember was indicted in a factually related case in November 1996 by a federal grand jury sitting in Las Vegas, Nevada. U.S. v. Damon Cozzolino, et al., CR-S-96-287. He subsequently pleaded guilty to one count of conspiracy, 18 U.S.C. § 371.