WASHINGTON -- The SEC plans to hold a trial-like hearing on Nov. 7 in Atlanta to consider fraud charges it has brought against an underwriter and bond counsel in connection with almost $20 million of housing bonds that were sold for two Mississippi counties.

The trial date was agreed to yesterday by lawyers for all of the parties involved in the case -- the Securities and Exchange Commission; the underwriting firm of Thorn, Alvis, Welch Inc. in Jackson, Miss.; the firm's president, John E. Thorn Jr.; and bond counsel Derryl W. Peden, who is with Stennett, Wilkinson & Peden in Jackson.

The underwriting firm has since changed its name to Thorn Welch & Co.

The SEC filed the fraud charges against Thorn, his firm, and Peden in June in connection with seven tax-exempt multifamily housing bond transactions that were done for Warren and Hinds-counties in 1992 and 1993.

The SEC claims that Thorn, his firm, and Peden paid a contractor more than $1 million from bond proceeds which was then, in effect, kicked back to them when the contractor paid some of the costs of issuance,

As a result, the SEC charges, the bond offering documents erroneously said that the contractor had made "contributions" to the projects and failed to disclose that the bonds might be taxable because of violations of tax law limits.

The tax law limits to 2% the amount of bond proceeds that can be used to pay issuance costs for housing and other tax-exempt private- activity bond issues. It also limits to 5% the amount of tax-exempt private-activity bond proceeds that can be used for costs that are not incurred in connection with the tax-exempt purpose of the bonds.

The underwriter and bond counsel dispute the SEC charges and say they did not violate any tax laws. They contend that the SEC charges are improper because they stem from tax law issues that are the jurisdiction of the Internal Revenue Service and not the SEC.

SEC Judge Brenda Murray will preside over the trial-like administrative hearing in November, SEC lawyers said yesterday. She is the SEC's chief administrative law judge, they said.

The hearing is designed to clarify the facts and issues of the case and will probably last three or four days, according to lawyers with the SEC and King & Spalding, the law firm in Atlanta that is representing Thom and his firm.

The hearing will not result in an immediate decision, but is instead only one of several steps in the proceeding, the lawyers said.

After the hearing, the two sides will file briefs on the issues raised in the bearing, the lawyers said.

The case is not likely to be resolved until next year, they said.

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