UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION
SECURITIES ACT OF 1933
Release No. 7771 / November 15, 1999
SECURITIES EXCHANGE ACT OF 1934
Release No. 42139 / November 15, 1999
ACCOUNTING AND AUDITING ENFORCEMENT
Release No. 1208 / November 15, 1999
ADMINISTRATIVE PROCEEDING
File No. 3-10096
____________________________________
ORDER INSTITUTING PUBLIC
In the Matter of ADMINISTRATIVE PROCEEDINGS
PURSUANT TO SECTION 8A OF THE
THE CRONOS GROUP, SECURITIES ACT OF 1933
AND SECTION 21C
OF THE SECURITIES EXCHANGE ACT
Respondent. OF 1934, MAKING FINDINGS, AND
IMPOSING A CEASE-AND-DESIST ORDER
_____________________________________
I.
The Securities and Exchange Commission ("Commission") deems it
appropriate that public administrative proceedings be instituted
against The Cronos Group ("Cronos" or "Respondent") pursuant to
Section 8A of the Securities Act of 1933 ("Securities Act) and Section
21C of the Securities Exchange Act of 1934 ("Exchange Act").
II.
In anticipation of the institution of these administrative
proceedings, Cronos has submitted an Offer of Settlement of The Cronos
Group ("Offer") that the Commission has determined to accept. 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, without admitting or denying the findings set forth
herein, except as to jurisdiction of the Commission over it and over
the subject matter of these proceedings, which Cronos admits, Cronos
consents to the entry of this Order Instituting Public Proceedings
SNIPPETS:
The Securities and Exchange Commission deems it appropriate that public administrative
In anticipation of the institution of these administrative proceedings, Cronos has submitted
Solely for the purpose of these proceedings, and any other proceedings brought by or on
ies Exchange Act of 1934, Making Findings, and Imposing a Cease-and-Desist Order set forth below.
Cronos' common stock is traded only in the United States.
Palatin was removed as CEO and, in July 1998, resigned from the board of Cronos.
In doing so, it concealed, among other information, that Palatin had intercepted payments
Palatin controlled the company's disclosures and was the beneficiary of the transactions
Palatin consolidated his control of these companies in 1991 when he purchased his partner's
On December 7, 1995, the Commission declared the registration statement effective.
When Contrin subsequently asserted a claim for the $500,000, Cronos paid the funds but
Shortly after this transaction, Palatin directly or indirectly, formed Barton Holdings Ltd.
Cronos' registration statement and prospectus identified Barton as a debtor of the company
The offering materials also failed to disclose that prior to the IPO Cronos had paid $7.5
This defect raised serious questions concerning the value of the collateral, the
In October, 1996, shortly after receiving counsel's final report, Cronos paid another $1.5
Nevertheless, the company's accounting staff at Palatin's direction, disbursed $1.5 million
Disclosure Requirements for Related Party Transactions
According to Generally Accepted Accounting Principles, an issuer's financial statements are
Cronos' registration statement and prospectus contained false and misleading information
upon reasonable request by the Commission or its staff, and on reasonable notice, and without
tled In the Matter of The Cronos Group, and in any future investigations or inquiries from the
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