I,---S_E_C_N_EW_S _DI_G_E_ST_I
Issue 98-169
September 1, 1998
:::
ENFORCEMENT PROCEEDINGS
AMERICAN AUTOMATION,
INC. COMPLAINT AMENDED TO ADD ADDITIONAL DEFENDANT
On August 28, 1998, the Commission filed a first amended complaint
in federal district court, Dallas, Texas, adding Jayne R. Roose as
a defendant in its previously filed civil action.
The Commission
alleges that Roose acted in concert with defendants Kendyll R.
Horton, Hazel A. Horton and Merle B. Gross in the fraudulent offer
and sale of American Automation, Inc. stock in which $4.5 million
was raised from over 1400 investors in several states. In fact,
according to the first amended complaint, Roose and fellow defendant
Gross continued their fraudulent activity after the Commission filed
the civil action and obtained a temporary restraining
order
prohibiting future fraudulent conduct.
The first amended complaint alleges that the defendants told
investors that American Automation would develop and place automated
insurance vending machines in high traffic areas, and that projected
profits would be almost $100 million by the end of its third year of
operation; apparently, however, no automated vending machines have
been sold and American Automation's only source of revenue has come
from investors' funds. Additionally, according to the first amended
complaint, the defendants used investor funds to pay for their
personal expenses, and for business expenses unrelated to American
Automation's operations.
Roose is charged in the first amended complaint with violations of
the securities registration and antifraud provisions of the federal
securities laws.
[SEC v. Amer;_can Automation, Inc., et al., 3: 98-
CV-1S96-D, USDC, ND/TX] (LR-15863)
INVESTMENT COMPANY ACT RELEASES
NOTICES OF DEREGISTRATIONS UNDER THE INVESTMENT COMPANY ACT OF 1940
For the month of August, 1998, a notice has been issued g~vJ.ng
interested persons until September 22, 1998, to request a hearing on
any of the following applications for an order under Secti