Initial Decision Release No. 1331

Administrative Proceeding

File No. 3-18461

UNITED STATES OF AMERICA

Before the

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

In the Matter of

Universal Bioenergy, Inc.

Initial Decision

December 12, 2018

Appearances: Harry B. Roback and Lucy T. Graetz

for the Division of Enforcement,

Securities and Exchange Commission

Solomon RC Ali, Chief Executive Officer 

of Universal Bioenergy, Inc., for Respondent

Before: James E. Grimes, Administrative Law Judge

Introduction

The Securities and Exchange Commission initiated this proceeding in 

April 2018, when it issued an order instituting administrative proceedings 

(OIP) under Section 12(j) of the Securities Exchange Act of 1934.1 The OIP 

alleges that Universal Bioenergy, Inc., has a class of securities registered 

with the Commission under Exchange Act Section 12(g).2 The OIP further 

alleges that Universal Bioenergy has not filed a periodic report since it filed a 

Form 10-Q for the period ended March 31, 2014, and that it failed to disclose 

via Form 8-K the resignation of a senior officer and director.

3 Based on these 

factual allegations, the OIP alleges that Universal Bioenergy is delinquent in 

 

1 OIP at 1; see 15 U.S.C. § 78l(j).

2 OIP at 1; see 15 U.S.C. § 78l(g).

3 OIP at 1–2.
2

meeting its periodic reporting obligations and obligations to disclose certain 

reportable events and has thus violated Exchange Act Section 13(a) and 

Exchange Act Rules 13a-1, 13a-11, and 13a-13, which require public 

corporations to file annual and quarterly reports with the Commission and 

disclose certain reportable events.

4 For the reasons below, I revoke the 

registrations of Universal Bioenergy’s securities.

Procedural History

A different administrative law judge originally presided over this 

proceeding. But following the Supreme Court’s decision in Lucia v. SEC,

5 the 

proceeding was stayed, and the matter was then reassigned to me to provide 

Universal Bioenergy with the opportunity for a new hearing.6 Universal 

Bioenergy was directed to propose how further proceedings should be 

conducted.7

In a joint proposal filed on October 3, 2018, the parties stipulated that 

Universal Bioenergy was properly served with the OIP and the company had 

filed an answer. The parties also outlined their dispute about the adequacy of 

the Division’s disclosure of its investigative file.8 And they agreed that I 

should set a briefing schedule, allowing the Division to move for summary 

disposition.

I held a telephonic prehearing conference on October 16, 2018, attended 

by the Division and Solomon RC Ali, acting Chief Executive Officer of 

Universal Bioenergy.9 During the prehearing conference, I asked Mr. Ali to 

clarify several equivocal responses in Universal Bioenergy’s answer 

 

4 OIP at 1–2; see 15 U.S.C. § 78m(a); 17 C.F.R. §§ 240.13a-1, .13a-11, .13a13.

5 138 S. Ct. 2044 (2018); see Pending Admin. Proc., Securities Act of 1933 

Release No. 10536, 2018 SEC LEXIS 2058, at *2–3 (Aug. 22, 2018).

6 Pending Admin. Proc., Admin. Proc. Rulings Release No. 5955, 2018 SEC 

LEXIS 2264, at *2–3 (ALJ Sept. 12, 2018).

7 Universal Bioenergy, Inc., Admin. Proc. Rulings Release No. 5971, 2018 

SEC LEXIS 2292, at *1 (ALJ Sept. 13, 2018).

8 See 17 C.F.R. § 201.230.

9 Universal Bioenergy, Inc., Admin. Proc. Rulings Release No. 6203, 2018 

SEC LEXIS 2865, at *1 (ALJ Oct. 17, 2018).
3

submitted on May 24, 2018.

10 Based on his responses, Universal Bioenergy’s 

answer to the OIP was amended, as Ali admitted that the company had 

neither filed an annual report since October 15, 2013, nor a quarterly report 

for any fiscal period after the quarter ending March 31, 2014.

11

As the parties requested, I set a schedule for filing motions for summary 

disposition.12 The Division filed a motion for summary disposition, supported 

by a declaration with seven exhibits.

13 Universal Bioenergy did not file an 

opposition or cross motion for summary disposition. In conducting this 

proceeding and considering the Division’s motion, I gave no weight to the

opinions, orders, or rulings issued by the prior administrative law judge.14

Findings of Fact

The findings and conclusions in this initial decision are based on the 

record and on facts officially noticed under Commission Rule of Practice 323, 

17 C.F.R. § 201.323, including Universal Bioenergy’s filing history as 

reflected in the Commission’s EDGAR database and records maintained by 

the Nevada Secretary of State.

15 I have deemed true those allegations in the 

 

10 Prehr’g Tr. 5–6.

11 Universal Bioenergy, Inc., 2018 SEC LEXIS 2865, at *1; see Prehr’g Tr. 

5–6. Universal Bioenergy’s answer, as amended, is cited as “Am. Ans.” Ali 

said during the conference that he lacked sufficient information to respond to 

the allegation that Universal Bioenergy failed to timely file current reports 

on Form 8-K disclosing certain reportable events, including, but not limited 

to, the resignation of Vince Guest, a former senior officer and director. 

Prehr’g Tr. 6.

12 Universal Bioenergy, Inc., 2018 SEC LEXIS 2865, at *2.

13 The exhibits to the Declaration of Lucy T. Graetz in Support of Division 

of Enforcement’s Motion for Summary Disposition are cited as “Div. Ex. __.”

14 Pending Admin. Proc., 2018 SEC LEXIS 2058, at *4.

15 See Helpeo, Inc., Exchange Act Release No. 82551, 2018 WL 487320, at 

*4 nn.37–38 (Jan. 19, 2018) (taking official notice under Rule 323 of EDGAR 

filings and of records maintained by the Nevada Secretary of State). 
4

OIP that Universal Bioenergy did not deny.16 In making the findings below, I 

have applied preponderance of the evidence as the standard of proof.17

Universal Bioenergy, Central Index Key No. 1320729, is a revoked

Nevada corporation based in Irvine, California.

18 Universal Bioenergy

registered its securities with the Commission under Exchange Act Section 

12(g) in October 2013.

19 On the day it registered, Universal Bioenergy also 

filed a Form 10-K, which described Guest as its “Chief Executive Officer, 

Director, Principle Financial Officer,” and Ali as “Senior Vice President, 

Director.”20 By registering under Section 12, Universal Bioenergy incurred 

the obligation to file periodic and current reports with the Commission.21 

As Universal Bioenergy concedes, it has not filed a periodic report since 

it filed a Form 10-Q for the period ended March 31, 2014.

22 Including a 

delinquent Form 10-K for the year ended June 30, 2018, and a delinquent 

Form 10-Q for the quarter ended September 30, 2018, which were due after 

the Commission initiated this proceeding,23 Universal Bioenergy has failed to 

 

16 See 17 C.F.R. § 201.220(c) (“Any allegation not denied shall be deemed 

admitted.”).

17 See Vladislav Steven Zubkis, Exchange Act Release No. 52876, 2005 WL 

3299148, at *5 n.37 (Dec. 2, 2005).

18 Am. Ans. ¶ II.1; see Div. Ex. 2. Although the OIP alleges that Universal

Bioenergy is “currently or formerly a Nevada corporation,” OIP at 1, the 

Nevada Secretary of State’s website shows that it is a revoked corporation, 

see https://www.nvsos.gov/sos (search by “Entity Name” for “Universal 

Bioenergy, Inc.”).

19 Am. Ans. ¶ II.1; see Universal Bioenergy, Inc., Registration of Certain 

Classes of Securities (Form 8-A) (Oct. 15, 2013).

20 Universal Bioenergy, Inc., Annual Report at 36 (Form 10-K) (Oct. 15,

2013).

21 15 U.S.C. § 78m(a); see Accredited Bus. Consolidators Corp., Exchange 

Act Release No. 75840, 2015 WL 5172970, at *2 (Sept. 4, 2015).

22 Am. Ans. ¶¶ II.2.i, .ii; Prehr’g Tr. 5–6.

23 The time allowed for filing periodic reports varies based on the status of 

the filer, but in all cases Forms 10-K are due no later than ninety days after 

the end of the fiscal period. See 17 C.F.R. §§ 240.13a-1, 249.310(b). Similarly, 

Forms 10-Q are due no later than forty-five days after the end of the fiscal 

period. See 17 C.F.R. §§ 240.13a-13(a), 249.308a(a). Violations that postdate 

(continued...)
5

file five annual Forms 10-K and thirteen quarterly Forms 10-Q. The last

quarterly report that Universal Bioenergy filed stated: 

The Company has accumulated losses totaling 

$22,698,833 from its inception to March 31, 2014. 

Furthermore, the Company has consistently had to raise 

debt and equity capital to fund cash used in operations. 

These factors raise doubt about the ability of the 

Company to continue as a going concern if the Company 

does not continue to raise sufficient amounts of 

capital. . . .

Our ability to implement our growth plans will depend 

primarily on our ability to obtain additional private or 

public equity or debt financing. We are currently seeking 

additional capital from our current investors and 

creditors to achieve our goals and objectives. However, 

such financing from these investors and creditors may 

not be available at all, or we may be unable to locate and 

secure additional capital on terms and conditions that 

are acceptable to us. Our failure to obtain additional 

capital may have a material adverse effect on our 

business.24

In May 2015, Universal Bioenergy filed a Form 8-K in which it 

announced that Ali and Guest and had been reappointed as members of its 

board.25 It also announced the appointment of a number of other officers.26

Guest signed this filing as CEO.

 

an OIP may be considered when determining a suitable sanction. See

Nature’s Sunshine Prods., Inc., Exchange Act Release No. 59268, 2009 WL 

137145, at *6 n.27 (Jan. 21, 2009). 

24 Universal Bioenergy, Inc., Quarterly Report at 14 (Form 10-Q) (May 28, 

2014). Guest signed this report as President, CEO, Principle Financial 

Officer, and Accounting Officer and Director. Id. at 26.

25 Universal Bioenergy, Inc., Current Report, Item 5.02 (Form 8-K) (May 

18, 2015).

26 Id.
6

In December 2015, Guest resigned from all positions he held with 

Universal Bioenergy.

27 Review of the Commission’s EDGAR database shows 

that Universal Bioenergy has never filed a Form 8-K announcing Guest’s 

resignation.28

In July 2015, the Commission’s Division of Corporation Finance sent 

Universal Bioenergy a delinquency letter concerning its failure to meet its 

periodic reporting obligations.29

As of October 16, 2018, Universal Bioenergy was listed on OTC Link 

operated by OTC Market Groups Inc. and had five market makers.30 OTC 

Markets currently warns that Universal Bioenergy is delinquent in its 

reporting obligations.

31

Conclusions of Law

Rule of Practice 250(b) governs motions for summary disposition in 

proceedings brought under Section 12(j).

32 Under Rule 250(b), an 

administrative law judge may grant a motion for summary disposition if 

“there is no genuine issue with regard to any material fact” and the party 

making the motion “is entitled to a summary disposition as a matter of 

law.”33 “[S]ummary disposition is appropriate in proceedings” brought under 

“Exchange Act Section 12(j), where the issuer has not disputed the facts that 

constitute the violation.”34 Universal Bioenergy concedes that it failed to 

timely file any periodic reports since it filed its Form 10-Q for the period 

 

27 Div. Ex. 3.

28 See Div. Ex. 2

29 Div. Ex. 5.

30 Div. Ex. 4.

31 OTC Mkts. Grp., UBRG: Universal Bioenergy, Inc., OTCMarkets, 

https://www.otcmarkets.com/stock/UBRG/quote (last visited Nov. 29, 2018).

32 See 17 C.F.R. § 201.250(b).

33 Id.

34 Citizens Capital Corp., Exchange Act Release No. 67313, 2012 WL 

2499350, at *8 (June 29, 2012); see Absolute Potential, Inc., Exchange Act 

Release No. 71866, 2014 WL 1338256, at *5 (Apr. 4, 2014).
7

ended March 31, 2014.

35 Additionally, the company has not disputed the 

Division’s showing that Guest, an officer and director, resigned. And it cannot 

dispute that it did not thereafter file a timely Form 8-K.36 Summary 

disposition is thus appropriate. 

Under Exchange Act Section 13(a), the issuer of any security registered 

with the Commission under Section 12 of the Exchange Act must file certain 

reports with the Commission.37 Rules 13a-1 and 13a-13 require issuers to file

annual and quarterly reports, respectively.

38 And Rule 13a-11 requires

issuers to disclose certain reportable events, such as the resignation of senior 

officers and directors.

39 These requirements serve to “‘protect[] . . . investors 

and . . . insure fair dealing’ in the company’s securities.”40 Compliance with 

the reporting requirements is mandatory.41 Scienter is not required to 

establish a violation.42

Because Universal Bioenergy is an issuer of securities registered with 

the Commission under Section 12, it was required to file annual and

quarterly with the Commission.43 But it failed to file required periodic reports 

over more than four years.

44

As the issuer of a security registered with the Commission under Section 

12, Universal Bioenergy was also required to file notice on Form 8-K 

 

35 Am. Ans. ¶¶ II.2.i, .ii; Prehr’g Tr. 5-6.

36 See Div. Ex. 5; see also Am. Ans. ¶ II.2.iii (stating that Universal 

Bioenergy lacked sufficient information to respond to the allegation).

37 15 U.S.C. § 78m(a).

38 17 C.F.R. §§ 240.13a-1, .13a-13(a).

39 17 C.F.R. § 240.13a-11(a).

40 China-Biotics, Inc., Exchange Act Release No. 70800, 2013 WL 5883342, 

at *10 (Nov. 4, 2013) (quoting 15 U.S.C. § 78m(a)).

41 Am.’s Sports Voice, Inc., Exchange Act Release No. 55511, 2007 WL 

858747, at *4 (Mar. 22, 2007), recons. denied, Exchange Act Release 

No. 55867, 2007 WL 1624611 (June 6, 2007).

42 China-Biotics, Inc., 2013 WL 5883342, at *10 n.60.

43 15 U.S.C. § 78m(a); 17 C.F.R. §§ 240.13a-1, .13a-13(a).

44 Am. Ans. ¶¶ II.2.i, .ii.
8

following the resignation of its principal executive officer, president, principal 

financial officer, principal accounting officer, principal operating officer, or 

any member of its board.45 Guest occupied these positions, yet Universal 

Bioenergy never filed a Form 8-K announcing his resignation.46

As a result of the above, Universal Bioenergy failed to comply with 

Section 13(a) and Rules 13a-1, 13a-11, and 13a-13.

The Commission may, “as it deems necessary or appropriate for the 

protection of investors,” revoke or suspend for up to twelve months the 

registration of a security if it finds that the issuer of the “security has failed 

to comply with any provision of” the Exchange Act or rules thereunder.47

Given Universal Bioenergy’s four-year failure to comply with its periodic

filing obligations under the Act, and its failure to report the resignation of 

Guest, the registration of the company’s securities is subject to suspension or 

revocation.48

Sanctions

The Commission considers a number of factors when it determines the 

appropriate sanction in proceedings under Exchange Act Section 12(j) 

involving violations of Exchange Act Section 13(a) and Rules 13a-1, 13a-11,

and 13a-13. These factors include “the seriousness of the issuer’s violations, 

the isolated or recurrent nature of the violations, the degree of culpability 

involved, the extent of the issuer’s efforts to remedy its past violations and 

ensure future compliance, and the credibility of its assurances, if any, against 

further violations.”49 This list of Gateway factors “is non-exclusive and no 

single factor is dispositive.”50

 

45 17 C.F.R. §§ 240.13a-11(a), 249.308; Form 8-K, Item 5.02(a), (b); Form 8-

K, Item 5.02(a), (b), current version available at https://www.sec.gov/about

/forms/form8-k.pdf (Sept. 2017).

46 See Div. Exs. 2, 3.

47 15 U.S.C. § 78l(j) (emphasis added); see Advanced Life Scis. Holdings, 

Inc., Securities Act Release No. 81253, 2017 WL 3214455, at *2 (July 28, 

2017).

48 See Advanced Life, 2017 WL 3214455, at *3.

49 Gateway Int’l Holdings, Inc., Exchange Act Release No. 53907, 2006 WL 

1506286, at *4 (May 31, 2006). 

50 China-Biotics, 2013 WL 5883342, at *12. 
9

A. Consideration of the Gateway factors supports revocation.

1. Universal Bioenergy’s failures are serious. The requirement that 

issuers file periodic reports is “a central provision of the Exchange Act.”51 The 

periodic reporting requirements exist “to supply the investing public with 

current, accurate financial information about an issuer so that investors may 

make informed decisions.”52 Indeed, periodic reports are among “the primary 

sources of information available to guide the decisions of the investing 

public.”53 And current reports fill the gaps by requiring “more prompt 

disclosure by companies of significant events” to “reduce the opportunities for 

deception and manipulation that stem from delayed disclosure.”54 Without 

current reports, “the market [would be] unable to assimilate . . . undisclosed 

information into the value of a company’s securities” until a company’s next 

periodic report issues.55

When an issuer fails to meet its reporting obligations, it “depriv[es] both 

existing and prospective holders of its registered stock of the ability to make 

informed investment decisions based on current and reliable information” 

about the issuer.56 An issuer’s “recurrent failure” to meet its reporting 

obligations is thus “so serious that only a strongly compelling showing with 

 

51 Advanced Life, 2017 WL 3214455, at *3 (quoting Accredited Bus., 2015 

WL 5172970, at *2).

52 Am. Stellar Energy, 2011 WL 2783483, at *5.

53 United States v. Arthur Young & Co., 465 U.S. 805, 810 (1984); see Am.’s 

Sports Voice, 2007 WL 858747, at *4 n.17 (“The reporting requirements are 

‘the primary tool[s] . . . for the protection of investors from negligent, careless, 

and deliberate misrepresentations in the sale of stock and securities.’” 

(alteration in original) (quoting SEC v. Beisinger Indus. Corp., 552 F.2d 15, 

18 (1st Cir. 1977))).

54 Additional Form 8-K Disclosure Requirements and Acceleration of Filing 

Date, 67 Fed. Reg. 42,914, 42,915 (June 25, 2002).

55 Additional Form 8-K Disclosure Requirements and Acceleration of Filing 

Date, 69 Fed. Reg. 15,594, 15,594–95 (Mar. 25, 2004).

56 Advanced Life, 2017 WL 3214455, at *3 (quoting Accredited Bus., 2015 

WL 5172970, at *2).
10

respect to the other [Gateway] factors . . . would justify a lesser sanction than 

revocation.”57

Universal Bioenergy has not filed a required periodic report in over four

years, a period encompassing eighteen consecutive reports.58 Universal 

Bioenergy’s ongoing failure to fulfill its reporting obligation has deprived the 

investing public of important information to which it is entitled. Universal 

Bioenergy’s silence followed a Form 10-Q reporting financial problems and 

difficulties accessing additional capital.

59 Moreover, Universal Bioenergy 

failed to disclose the resignation of a senior officer and director.60 Both 

current and potential investors have been left for an extended period 

ignorant of Universal Bioenergy’s financial status and management. Given 

the foregoing, Universal Bioenergy’s violations are serious.61 

2. From May 2014 to the present, Universal Bioenergy has not filed any 

of the eighteen quarterly and annual reports it was required to file and failed 

to report the resignation of at least one senior officer and director. Universal 

Bioenergy’s delinquencies were thus recurrent and were not isolated.62

3. Universal Bioenergy’s failure to file its reports reflects a “high degree 

of culpability.”63 Universal Bioenergy knew that it was required to file 

 

57 Impax Labs., Inc., Exchange Act Release No. 57864, 2008 WL 2167956, 

at *8 (May 23, 2008). 

58 See Am. Ans. ¶¶ II.2.i, .ii.

59 See Universal Bioenergy, Inc., Quarterly Report at 14 (Form 10-Q) (May 

28, 2014).

60 See Div. Exs. 2, 3.

61 Cf. Accredited, 2015 WL 5172970, at *2 (holding that not filing “any 

periodic reports for over two years” were serious violations); China-Biotics, 

2013 WL 5883342, at *10 (finding a respondent’s “violations were serious,”

where it failed to “file a single periodic report for more than a year and a 

half”); Impax Labs., 2008 WL 2167956, at *7-8 (holding that the failure to file 

eight reports pre-OIP and six reports post-OIP was serious).

62 See Accredited, 2015 WL 5172970, at *2 (no reports for two years was 

deemed recurrent); Impax Labs., 2008 WL 2167956, at *7 (eight missing 

reports during the time period covered by the OIP); Gateway, 2006 WL 

1506286, at *5 (seven missing reports).

63 Absolute Potential, 2014 WL 1338256, at *4.
11

periodic reports; the Commission’s EDGAR database reflects that after it first 

registered its securities, Universal Bioenergy filed periodic reports.

64

Furthermore, in September 2014, the company filed a Form 12b-25 stating it 

would not timely file a form 10-K, and the company filed another 12b-25 in 

November 2014 stating it would not timely file a Form 10-Q.65 And the 

company filed at least one current report disclosing the election of new 

directors and appointment of new officers, including Guest.66

Universal Bioenergy nonetheless failed to file any required periodic 

reports for over four years and failed to disclose Guest’s departure in a 

current report.

67 It also largely failed to comply with the mandatory 

requirement to file a Form 12b-25 seeking an extension and “disclos[ing] . . .

its inability to” timely file periodic reports when it was unable to file a Form 

10-Q or 10-K after November 2014.

68 These failures reflect a lack of concern 

for the investing public and demonstrate Universal Bioenergy’s culpability.69

4. Universal Bioenergy has not taken effective steps to remedy its past 

violations. When the Commission instituted this proceeding, Universal 

Bioenergy had fifteen outstanding reports. As of the date of this initial 

decision, the number of outstanding reports has grown to eighteen.

70

 

64 See Div. Ex. 2.

65 Div. Ex. 7.

66 Div. Ex. 6.

67 Am. Ans. ¶¶ II.2.i, ii.

68 See 17 C.F.R. § 240.12b-25(a). In determining the “appropriate sanction,” 

the Commission considers a delinquent issuer’s failure to file Forms 12b-25. 

See Accredited Bus., 2015 WL 5172970, at *3 n.17. Universal Bioenergy filed 

only two Forms 12b-25 during its period of delinquency, regarding its Form 

10-K for the year ended June 30, 2014 and Form 10-Q for the quarter ended 

September 30, 2014. Div. Exs. 2, 7.

69 See Accredited Bus., 2015 WL 5172970, at *3 (“That Accredited knew of 

its reporting obligations but failed to comply with them is evidence of a high 

degree of culpability.”); Absolute Potential, 2014 WL 1338256, at *4 (noting 

an issuer’s failures over a period of years to file periodic reports or Forms 

12b-25).

70 See Am. Ans. ¶¶ II.2.i, .ii; Div. Ex. 2.
12

In its answer, Universal Bioenergy stated it would be in full compliance 

by the end of the summer of 2018.

71 But during the prehearing conference in 

October 2018, Ali conceded that Universal Bioenergy has not yet remedied its 

periodic filing deficiencies.72 The Commission’s EDGAR database confirms 

that the company has not filed any of the tardy periodic reports or even filed 

a single Form 8-K to disclose Guest’s departure.73 Despite setting a

compliance goal, Universal Bioenergy never remedied its deficient reporting.

5. There is no evidence that Universal Bioenergy has taken any steps to 

ensure its future compliance with its reporting obligations. In its answer 

Universal Bioenergy blames “former management” for its failure to meet its 

reporting requirements and claims “new management” is dealing with the 

problem.74 But Ali, the current acting CEO, was previously the senior vice 

president and a director. The implication that the situation will improve 

because there have been changes at the top is, at best, misleading. And 

Universal Bioenergy has not bothered to oppose the Division’s dispositive 

motion. Its failure to oppose, the long period of delinquency, and its financial 

condition, all suggest that it will not be able to achieve and maintain 

compliance in the future.

B. No other factors weigh in Universal Bioenergy’s favor.

In its answer, the company stated that it “expects that it will be current 

and in compliance with its SEC reporting responsibilities before the” end of 

summer 2018.75 Given that Universal Bioenergy both failed to meet this goal 

 

71 Am. Ans. ¶ II.2(f)–(j).

72 When I asked Ali whether Universal Bioenergy’s deficiencies had been 

remedied, he said:

What we have done is we advised the auditors, the 

accountant people. All of the previous accounting 

records and everything of that nature has been 

addressed according to GAAP and proper 

procedures and is ready to be filed.

Prehr’g Tr. 14. I then asked whether anything had been filed and he 

confirmed that Universal Bioenergy’s outstanding reports have not been 

filed. Id.

73 See Div. Ex. 2.

74 Am. Ans. ¶ II.2(a)–(l).

75 Id. ¶ II.2(g).
13

and failed to file an opposition to the Division’s motion for summary 

disposition, it is evident that Universal Bioenergy has either lost interest in 

the outcome of this proceeding, or is unable to make the required filings. 

Neither possibility weighs in favor of any outcome but revocation. 

Finally, although Universal Bioenergy failed to oppose the Division’s 

motion, it argued in its answer that revocation is not warranted because 

revocation “is not in the best interest of [its] shareholders,” apparently 

because revocation “could destroy shareholder value.”76

Universal Bioenergy is not the first respondent in a proceeding under 

Section 12(j) to claim that revocation will harm current shareholders.77 Like 

previous respondents, Universal Bioenergy ignores the fact that current 

shareholders are being “harmed by the continuing lack of current, reliable, 

and audited financial information” which prevents them from making 

“informed investment decision[s],” such as whether to sell the company’s 

stock.78 Moreover, possible harm to existing shareholders is not a 

“determining factor in [the Commission’s] analysis” because focusing on 

existing shareholders ignores prospective shareholders who, due to Universal

Bioenergy’s failure to file periodic reports, cannot evaluate it.79 

For the reasons described above, I find that Universal Bioenergy has not 

made a “strongly compelling showing . . . [that] would justify a lesser sanction 

than revocation.”80 It is therefore necessary and appropriate for the 

protection of investors to revoke the registration of each class of Universal 

Bioenergy’s registered securities.

Order

The Division’s motion for summary disposition is GRANTED and, under 

Section 12(j) of the Securities Exchange Act of 1934, the registration of each 

 

76 Id. ¶ II.2(l).

77 See, e.g., Impax Labs., 2008 WL 2167956, at *10; Am.'s Sports Voice, 

2007 WL 858747, at *4

78 Impax Labs., 2008 WL 2167956, at *10.

79 Am.’s Sports Voice, 2007 WL 858747, at *4.

80 Impax Labs., 2008 WL 2167956, at *8.
14

class of registered securities of Universal Bioenergy, Inc., is hereby 

REVOKED.81 

This initial decision shall become effective in accordance with and 

subject to the provisions of Rule 360.82 Under that Rule, a party may file a 

petition for review of this initial decision within twenty-one days after service 

of the initial decision. A party may also file a motion to correct a manifest 

error of fact within ten days of the initial decision, pursuant to Rule 111.83 If 

a motion to correct a manifest error of fact is filed by a party, then a party 

shall have twenty-one days to file a petition for review from the date of the 

undersigned’s order resolving such motion to correct a manifest error of fact.

This initial decision will not become final until the Commission enters an 

order of finality. The Commission will enter an order of finality unless a 

party files a petition for review or a motion to correct a manifest error of fact 

or the Commission determines on its own initiative to review the initial 

decision as to a party. If any of these events occur, the initial decision shall 

not become final as to that party.

_______________________________

James E. Grimes

Administrative Law Judge

 

81 This order applies to all classes of Universal Bioenergy’s securities 

registered under Section 12 of the Exchange Act, whether or not such 

securities are specifically identified by ticker symbol or otherwise in this 

initial decision.

82 17 C.F.R. § 201.360

83 17 C.F.R. § 201.111