Cope Enterprises, LTD

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IN THE MATTER OF COPE ENTERPRISES, LTD., ET AL.

CONSEr\T ORDER , ETC., IN l EGARD TO ALLEGED VIOLATIO THE FEDERAL TRADE COMl\nSSIOK ACT Dockel C-'l78. i. CU1ifJlaiJ/l, Jan. 197fi- Dcci.'iiulI , J(I/I. J3, 1.97(; Consent order requiring a Brooklyn, I\' , distributor of batteries and cosmetics among other things to cease misrepre:senting the high potential earnings of distributors: the type and number of sales locations the re::pondents would secure for distributors; the availability of training, business assistance, sales aids and advertising: the p!' orlnd line to be added: and the history of the company. Further, respondents an required to make refunds to requesting distributors and to disclose to prospective franchisees their right to cancel the agreement and obtain a full refund within ten (0) days of signing the agreement. Appearances For the Commission: Sandra L. Bird and Sandra L. Grayson. For the responuents: Solornan Z. Ferz"igeJ' New York City and Marvin Wolinetz Brooklyn CO:\PLAINT Pursuant to the provisions of the Federal Trade Commission Act and by virtue of the authority vested in it by said Act, the Federal Trade Commission, having reason to believe that Cope Enterprises Ltd., a corporation, Andrew Montero, individually and as an officer of said corporation, and Stanley Fuchs, individually and as former sales manager of said corporation, hereinafter sometimes referred to as respondents, have violated the provisions of said Act, and it appearing to the Commission that a proceeding by it in respect thereof would be in the public interest, hereby issues its complaint stating its charges in that respect as follows:

PARAGRAPH 1. Respondent Cope Enterprises, Ltd., is a corporation organized, existing and doing business under and by virtue of the laws of the State of Nevv' York. It formerly maintained its principal office and place of business at 2701 A venue lJ , Brooklyn, J\ ew York. Respondent Anclre\v Ivlontero is an officer of the corporate respondent, Cope Enterprises, Ltd. He formulates, directs and controls the policies, acts and practices of the corporate respondent including those hereinafter set forth. His business address was the same as that of said corporation and his home address is 3626 Kings H wy., Brooklyn New York.

Respondent Stanley Fuchs was the sales manager of the corporate 1:30 FEDERAL TRADE COMMISSIOC' DECISIONS Complaint 87 F.

respondent during the period from August 1972, to approximately October 1973. As such he cooperated and acted together with respondent Montero in formulating, directing and controlling the policies of the corporate respondent and was responsible for the planning, supervision and execution of certain of the acts and practices hereinafter set forth. His present address is 8 Paerdegat 1st St. Brooklyn, ;:ew York.

PAR. 2. I(respondents Cope Enterprises, Ltd., Andrew Montero individually and as an officer of said corporation, and Stanley Fuchs individually and as former sales manager of said corporation, were and for some time in the past have been, engaged in the advertising, offering for sale, and sale of distributorships which authorize the purchasers to sell to members of the public items of merchandise including Helen Neushaefer Hypo-Allergenic cosmetics and Burgess batteries.

PAR. 3. In the course and conduct of their business, respondents Cope Enterprises, Ltd., Andrew Montero, individually and as an officer of said corporation, and Stanley Fuchs, individually and as former sales manager of said corporation caused, and for some time last past have caused, said products, when sold, to be shipped from their suppliers places of business in the States of New Jersey and Minnesota to purchasers thereof located in various other States of the United States. In addition, in the course and conduct of their business, respondents have disseminated and caused to be disseminated in newspapers of interstate circulation, advertisements designed to be read by persons residing outside the State of New York and intended to induce such persons to enter into contractual agreements with respondents to purchase distributorships and products from respondents. Respondents also introduced into interstate circulation, through the instrumentality of the United States mails, promotional materials, circulars, business papers and other written instruments and communications with the result and effect that members of the public residing outside the State of ;:ew York, in various other States of the United States did, in fact purchased respondents' distributorships and products, thereby placing respondents' business in commerce within the intent and meaning of Section 5 of the Federal Trade Commission Act. Respondents have maintained, and at all times mentioned herein maintained, a substantial course of trade in distributorships and products, in commerce, as "commerce" is defined in the Federal Trade Commission Act.

PAR. 4. In the course and conduct of their business as above mentioned and for the purpose of inducing the purchase of their distributorships and products, respondents Cope Enterprises Ltd. COPE ENTERPRISES, LTD., ET AL. 131 129 Complaint Andrew Montero, individually and as an officer of said corporation, and Stanley Fuchs, individually and as former sales manager of said corporation, engaged in a program of recruitment of distributors for their distributorship program. As part of this program respondents have made numerous statements and representations in promotional materials and in newspaper advertisements.

Typical and illustrative of such statements, but not all inclusive thereof, are the following:

T 5-6 Huurs Weekly Xets To $700 a MONTH F - O Hours Weekly Nets To $7 000 a MONTH $2800 part time "ecured investment has unlimited growth potential with eventual full time earning of SlOO OOO per year. This public company has an outstanding success record since 1945 and is seeking reliable individuals to service company secured routes. NO SELL1!\G , NO OVERHEAD Simply restock merchandise and collect money * * * Our national advertised name brand product opens the door to top retail accounts. All accounts secured by the company * '" * . Your job i;: to restock and collect money. This is the only experience you wil ever kno'A,' '" * "" For a minimum investment of $2 800 you can earn approximately $624 or more a month A full time distributorship can produce earnings from $60 000 up to $100 000 a year Earnings Increase with the addition of add-on items which we literally have loa' s of :\ational accounts Types of locations Airports, Food Stores, Discount Stores, Variety stores " 0. "' PAR. G. By and through the use of the aforesaid statements and representations, and others of similar import and meanmg not 1::!2 FEDERAL TRADE COMMISSION DECISIONS Complaint R7 F.TC. expressly set forth herein, respondents have represented directly or by implication:

A. That persons v,rho purchase a distributorship from respondents can earn sums ranging from approximately $600 a month to S100 000 a year in their spare time or through full time operation of a distributorship.

B. That said earnings projections are the earnings made by a significant number of persons who have purchased and operated respondents' distributorships.

C. That respondents wi1 secure established, sales producing accounts or locations for purchasers of respondents' distributorships. D. That purchasers of respondents' distributorships wil not be required to sell products or engage in sales activities with potential customers in order to operate and maintain their distributorships successfully.

E. That corporate respondent is a public company with an outstanding record of success for a period of time in excess of 25 years. PAR.A. Relatively6. In truth few,and iniffact:any, persons who purchased distributorships from the respondents earned sums ranging from $600 a month to SIOO OOO a year in their spare time or through full time operation of their distributorships.

B. Respondents' claimed earnings projections are far in excess of the earnings of any person or persons \",'ho purchased and operated respondents' distributorships.

C. In the vast majority of cases respondents did not secure established, sales-producing locations for purchasers of their distributorships, but placed most of their merchandise in retail establishments which have very little consumer traffic. The locations secured by respondents were usually undesirable, unsuitable and unprofitable. D. The purchasers of the distributorships are required to sell and engage in sales activities in order to operate and maintain their distributorships successfully. It is frequently necessary to place merchandise in other locations because of the unprofitable nature of the locations selected by the respondents.

E. The corporate respondent is not a public company. It has not had an outstanding record of success for twenty-five or more years. In fact at the time of this representation, the corporate respondent had been in business less than a year.

Said statements and representations were therefore false, misleading, deceptive or unfair.

PAR. 7. In the further course and conduct of their business as aforesaid and for the purpose of inducing the purchase of their COPE E"TERPRISES, L TD .. ET AI. 1;33 129 Complaint distributorships and pJ'oducts, respondents, their agents, representatives or employees, or any of them, have made representations, either orally or in writing, that:

A. Respondents wil secure a specific number of profitable locations for each purchaser of a distributorship within a specified time period. B. Merchandise and/or sales aids purchased from respondents by respondents' distributors wil be furnished to said distributors within a specified time period.

C. Respondents wil provide purchasers of its distributorships \with sales literature, instruction manuals, order forms and other materials in connection with the operation of their distributorships. D. Respondents wil provide national and local advertising of the products purchased by their distributors so as to create a greater demand for same.

E. Purchasers of respondents' distributorships wil be trained in the operation of their distributorships, and respondents wil furnish business assistance which wil be of value to their distributors. F. Respondents \vil repurchase a distributorship at 75 percent of its original value, after a period of one year, if a distributor fails to maintain a stated quota for said distributorship or respondents, at the request of a distributor, wil aid in the resale of a distributorship. G. New cosmetic products are added every six weeks to the line of Helen Keushaefer Hypo-Allergenic cosmetics available to distributors. H. Respondent Cope Enterprises, Ltd. and the Helen Neushaefer Division of Supronics Corp., an established company, are one and the same company and that purchasers of distributorships are dealing with both.

PAR. 8. In truth and in fact:

A. In a substantial number of instances, respondents did not secure the agreed upon number of locations for the purchasers of distributorships within the time period specified, or only secured them after undue delay. In a substantial number of instances, the locations respondents did obtain were unprofitable and the merchandise was later removed at the location owner s request. B. In a substantial number of instances, respondents failed to cause delivery of the merchanrlise and/or sales aids purchased from respondents by distributors \within the time period specified, or only shipped them after undue delay and repeated complaints. C. In a substantial number of instances, respondents failed to provide distributors \\with sales literature, instruction manuals, order forms and other materials in connection with the operation of the distributorships within the time period specified, or only furnished such materials after undue delay and repeated complaints. 1:34 FEDERAL TRADE COMMISSION DECISIONS Decision and Order 87 F.

D. Very few, if any, local or national advertisements or advertisements of any kind, were published or disseminated by respondents for products purchased by respondents' distributors. E. Respondents failed to train distributors in the operation of their distributorships and did not furnish any significant business assistance to distributors.

F. Respondents rarely, if ever, repurchased at 75 percent of its original value, or for any other amount, the distributorship of any distributor after a one year period, or aided in any way in the resale of' such distributorships.

G. New products are not added every six weeks to the line of Helen N eushaefer Hypo-Allergenic cosmetics available to distributors. H. Respondent Cope Enterprises, Ltd. and the Helen N eushaefer Division of Supronics Corp. are not one and the same company. Respondent Cope Enterprises, Ltd. is an independent distributor and Supronics Corp. disclaims any responsibilty for the agreements between Cope Enterprises, Ltd. and its distributors. Said statements and representations were, therefore, false, misleading, deceptive or unfair.

PAR. 9. The use by respondents of the aforesaid unfair, false misleading and deceptive statements, representations, acts and practices, has had the capacity and tendency to mislead members of the public into the erroneous and mistaken belief that said statements and representations were true and complete, and into the purchase of respondents' distributorships and products by reason of said erroneous and mistaken belief, and into the assumption of obligations and the payment of monies, as a result thereof, which they might otherwise not have incurred.

PAR. 10. In the course and conduct of their aforesaid business, and at all times mentioned herein, respondents have been in substantial competition, in commerce, with corporations, firms and individuals engaged in the sale of distributorships and products of the same general kind and nature as those sold by respondents. PAR. 11. The aforesaid acts and practices of respondents, as herein alleged, were all to the prejudice and injury of the public and of respondents' competitors and constituted unfair methods of competition in commerce and unfair and deceptive acts and practices in commerce, in violation of Section 5 of' the Federal Trade Commission Act.

DECISION AND ORDER The Federal Trade Commission having initiated an investigation of certain acts and practices of the respondents named in the caption COPE EKTERPRISES, LTD., ET AI. 1;3;' 129 Decision and Onler hereof, and the respondents having been furnished thereafter with a copy of a draft of complaint which the New York Regional Office proposed to present to the Commission for its consideration and which if issued by the Commission, would charge respondents with violation of the Fcdera! Trade Commission Act; and The respondents and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by the respondents of al1 the jurisdictional facts set forth in the aforesaid draft of complaint, a statement that the signing of said agreement is for settlement purposes only and docs not constitute an admission by respondents that the law has been violated as alleged in such complaint and waivers and other provisions as required by the Commission Rules; and The Commission having thereafter considered the matter and having determined that it had reason to believe that the respondents have violated the said Act and that complaint should issue stating its charges in that respect, and having thereupon accepted the executed consent agreement and placed such agreement on the public record for a period of sixty (60) days, now in further conformity with the procedure prescribed in Section 2.34(b) of its Rules, the Commission hereby issues its complaint, makes the following jurisdictional findings and enters the following order:

1. Respondent Cope Enterprises, Ltd. is a corporation organized existing and doing business under and by virtue of the laws of the State of New York. It formerly maintained its principal place of business at 2701 Avenue t: , Brooklyn, New York.

Respondent Andrew Montero is an officer of said corporation. He formulates, directs and controls the policies, acts and practices of said corporation. His business address \vas the same as that of said corporation and his home address is 3626 Kings Hwy., Brooklyn, New York.

Respondent Stanley Fuchs was sales manager of said corporate respondent during the period from August 1972 to approximately October 1973. As such he cooperated and acted together with respondent Montero in formulating, directing and controllng the policies of the corporate respondent. His present address is 8 Paerdegat 1st St., Brooklyn, New York.

2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondents, and the proceeding is in the public interest.

ORDER It is ordered That respondents Cope Enterprises, Ltd., a corporation j:\( FEDERAL TltADE CO:'L\IISSION DECISIONS Dccisiun and Order 87 F.TC. its successors ancl assigns and its officers and, Andrew Montero individually and as an officer of said corporation, and Stanley Fuchs individually and as former sales manager of said corporation, and respondents' agents, representatives and employees, individually, or in concert, directly or through any corporation, subsidiary, division or other device in connection with the advertising, offering for sale, sale or distribution of cosmetic.s, batteries or any other products, distributorships or franchises in commerce, as "commerce" is defined in the Federal Trade Commission Act, do forth\with cease and desist from directly or by implication:

, gross A. 1. Representing in any manner the potential sales, income or net profits of a prospective distributor, franchisee or salesman unless:

a. such sales, income or profits are reasonably likely to be achieved by the person to \whom the representation is made; b. the basis and assumptions for such representation arc set forth in detail;

c. such representation and the underlying data have been prepared in accordance with generally accepted. accounting principles; d. in immediate conjunction therewith, the following statement is clearly and conspicuously disclosed:

THERE IS NO ASSURAr-CE THAT I;.COME A D PROFIT PROJECTIOI\' WILL BE A 1'1' AINED BY A;.Y SPECIFIC (DISTRIBUTOR FRANCHISEE OR SALESMAK). THEY ARE 11BRELY ESTIMATES. and c. the amount:- represented are not in excess of sales, income or profits actually achieved by existing distributors, franchisees or salesmen and where distributors, franchisees or salesmen have not been in operation long enough to indicate what sales, income or profits may result, making any representation of such to a prospective distributor, franchisee or salesman, 2. Hepresenting that respondents, their agents, representatives or employees wil secure sales producing and profitable locations or accounts for purchasers of respondents' distributorships or franchises; or misrepresenting, in any manner, the desirability of the locations to be provided by respondents.

3. Representing that prior sales experience or training is not necessary to successfully operate and maintain respondents' distributorships or franchises.

4. Representing that the corporate respondent is a public company or that respondents have been successful or have been in business for any significant period of time or misrepresenting in any manner the history, status or nature of respondents' business. COPE ENTERPRISES, LTD., ET AL. 1;37 129 Deci ion and Order 5. Representing that respondents wil secure any number of locations for any distributor or franchisee \within a specified period of time unless in fact they secure said number of locations within the stated period and offer to replace any locations that (1) refuse to receive the (listributor s or franchisee s merchandise or (2) request the distributor or franchisee to remove the merchandise within three months of its initial placement.

6. Representing that any merchandise and sales aids offered for sale or sold by respondents to their distributors or franchisees \vil be delivered to said distributors OY franchisees within a specified time period, unless respondents have available, or in stock, all such merchandise or sales aids in quantities sufficient to meet all reasonably anticipated orders.

7. Representing that respondents wil provide their distributors or franchisees with sales literature, promotional literature, instructional manuals, forms or any other materials relating to the operation of respondents' distributorships or franchises within a specified time period, unless respondents have available, or in stock, an such literature, manuals, forms or such other materials in quantities sufficient to meet all reasonably anticipated orders. 8. Representing that respondents wil provide national and local advertising of the products offered for sale or sold by respondents to their distributors or franchisees; or misrepresenting, in any manner the extent, type, and method of promotion and services provided by respondents in connection with the advertising of products offered for sale or sold by respondents to their distributors or franchisees; or misrepresenting, in any manner, the media in which said advertising has appeared or will appear.

9. Representing that purchasers of respondents' distributorships or franchises wil be trained in the operation of their distributorships or franchises; or misrepresenting in any manner the quality, amount and nature of assistance to be provided by respondents. 10. Ilcpresenting that respondents wil repurchase distributorships or franchises or wil aid or assist in the resale of the same. 11. Misrepresenting, in any manner the amount, nature, type and character of the products available to distributors through respondents distributorships or franchises.

12. Representing that respondents have any connections, financial or otherwise, with the Helen :; eushaefer Division of Supronics Corp. other than that of purchasers of cosmetics manufactured by that company; or misrepresenting, in any manner, respondents' business connections or associations with other firms, organizations, groups or jndividuals.

216- 96" O-LT - 77 - 10 l;iR FEDERAL TRADE COMMISSION DECISIO Decision and Order 87 F.T.C. B. Making any claim, either orally or in writing, for which the respondents do not have in their possession valid substantiating data which data shall be made available to prospective distrihutors or franchisees, or to the Commission or its staff upon demand. C. Failing to furnish any prospective distributor or franchisee with all of the following information, in a clear and concise manner, at the time when a contract is first established between such prospective distributor or franchisee and the respondents or their representatives: I. The official name(s) and addressees) of the franchisor, and the parent firm or holding company of the franchisor, if any. 2. A detailed statement setting forth all the rights and obligations of the parties under the distributorship or franchise agreement. 3. The business experience of the respondents, including the length of time the respondents have conducted a business of the type to be operated by the distributor or franchisee, or have granted distributorships or franchises for such business, or have granted distributorships or franchises in other lines of business.

4. Where such is the case, a statement that the franchisor or any of its directors, stockholders owning more than ten percent of the stock or chief executive officers:

a. has been held liable in a civil action, convicted of a felony, or pleaded nolo contendere to a felony charge in any case involving fraud embezzlement, fraudulent conversion, or misappropriation of property; b. is subject to any currently effective injunctive or restrictive order or ruling relating to business activity as a result of action by any public agency or department; or c. has filed bankruptcy or been associated \with management or any company that has been involved in bankruptcy or reorganization proceedings; or d. is, or has been, a party to any cause of action brought by distributors or franchisees against the franchisor. Such statement shall set forth the identity and location of the court date of conviction or judgment, any penalty imposed or damages assessed, and the date, nature and issuer of each such order or ruling. 5. The financial history of the corporate respondent including balance sheets and profit and loss statements for the most recent fiveyear period; and a statement of any material changes in the financial condition of the corporate respondent since the date of such financial statement.

6. Complete financial details pertaining to the distributorship or franchise agreement including the amount to be paid by the distributor or franchisee, the amount to be paid for any services to be rendered by COPE ENTEHPRISES, LTD., ET AI. l:m 129 Decision and Order respondents and the amount to be paid for any merchandise offered for sale or sold thereunder.

7. A description of the distributorship or franchise fee; and a statement indicating whether all or part of this fee may be returned to the distributor or franchisee and the conditions under \which the fee wil be refunded.

8. A statement of the number of distributorships or franchises that are presently operating and the number proposed to be sold. 9. A list of the names and addresses of all persons who, in the two calendar years immediately preceding, purchased a distributorship or franchise for products or product lines similar to, or the same as, those being offered by respondents to any prospective distributor or franchisee and who are situated in the same geographical area as the prospective distributor, or franchisee, and the gross dollar volume of purchases of such products from respondents by each such distributor or franchisee, exclusive of dollar amount of merchandise purchased and paid for at the time of purchase of the distributorship or franchise. 10. A statement of the conditions under which the distributorship or franchise agreement may be terminated or repurchased at the option of the corporate respondent, and a statement setting forth the number of distributors or franchisees that fell into each of those categories during the past 12 months.

11. If the respondents inform prospective distributors or franchisees that they intend to provide them with training, they must state the number of hours of instruction and furnish prospective distributors or franchisees with a brief biography of the instructors who wil conduct the training.

12. A statement of the average length of time between the signing of a distributorship or franchise agreement and the time when a distributor could commence operation of his distributorship or franchise.

Al1 of the foregoing information in I to 12 above shall be set forth in a single disclosure statement, which shall not contain any promotional claims or other information not required by this order. The statement shall carry a distinctive and conspicuous cover sheet with the following notice (and no other) imprinted thereon in boldface type of not less than 10 point size:

IKFORMATION FOR PROSPECTIVE IJSTRIBt:TORS REQUIRIOD BY FEDERAL TR.ADE COMI\llSSION This package of information is provided for YOllr own protection. It is in your best interest to study it carefuliy befol'f' making any commitment If you do sign a t:ontr3c:" YOll may cancel it. and obtain a full refund of any money paid 140 FEDERAL TRADE CO:\IMISSION DECISIO:\S Decision and Order H7 F T.c. for any reason within ten bu iness days after sign mg. Details appear on the contl"act itself.

The information contained herein has not been reviewed or approved by the Fcdera; Trade Commission, but any misrepresentation constitutes a violation of Fcclel"allow. If you feel you have been misled, you should contact the Federal Trade Commission in Washington, or the Federal Trade Commission Hegional Office nearest .you. D. Failing to include immediately above and on the same page as the distributor s or franchisee s signature line of any contract establishing or confirming a distributorship or franchise agreement, the follo\ving statement in boldface print at least 50 percent larger than any other print in the body of such contract, or in boldface print of a contrasting color:

NOTICE, YOU ARE ENTITLED TO CERTAIN DIPORTANT INFORMATION CONCEENI'IG THIS TRANSACTIOX , EXTITLED "IXFORMATION FOE PROS- PECTIVE DISTRIBCTORS REQUIRED BY FEDERAL TRADE COMY1ISSION." IT IS IN YOUR nest INTEREST TO DEMAND AND STUDY SUCH INFOEMATION. YOU MAY CANCEL THIS CONTRACT FOR ANY R ASON WITHIN TEN BUSINESS DAYS AFTER YOU SIGlv' JT. If you do choose to cancel, you will be entitled to receive full refund of any money paid within ten bu"iness days after the franchisor receives notice of your cancellation. You must notify the franchisor by certified mail with return receipt requested . which would be sent to the address below\-\'. lRespondents will insert here the address and telephone number to which such notices should be sent.J E. Failing to cancel any contract for which a notice of cancellation was sent by any reasonable means within ten business days after the contract' s execution or to fail to refund any money paid by distributor or franchisee within ten business days after the date of receipt of such noticeF. ofFailingcancellation.to furnish the prospective distributor or franchisee, upon request, at any time and in the absence of any request, before consummation of any agreement, with a copy of the franchise agreement proposed to be used.

As used in this order, the following definitions shall apply: 1. "Prospective distributor or franchisee" means any person who approaches, or is approached by, respondents or their agents or representatives for the purpose of investigating a distributorship or franchise between such person and respondents; 2. "Time when contact is first established" means the earlier of the time when:

(a) a direct personal meeting first occurs between respondents or their agents or representatives and a prospective distributor or franchisee or COPE ENTERPRISES , L TIJ., ET AL. 141 129 Decision ami Order (b) any document or promotional literature is distributed to a prospective distributor or franchisee.

It IS fliTther ordered That respondents Cope Enterprises, Ltd. and Andrew :vontero notify the Commission at least thirty (30) days prior to any proposed change in the corporate respondent such as dissolution assignment or sale resulting in the emergence of a successor corporation, the creation or dissolution of subsidiaries, or any other change in the corporation which may affect compliance obligations arising out of this order.

It is fliTther ordered That respondent Andrew Montero promptly notify the Commission upon the discontinuance of his present business and of his affiliation with a new business or employment. Such notice shall include respondent' s current business address and a statement as to the nature of the business or employment in which he is engaged, as well as a description of his duties and responsibilties. It is jurther ordered That respondent Stanley Fuchs promptly notify the Commission of his current business address and the nature of the business or employment in which he is presently engaged, as well as a description of his duties and responsibilities. It is further ordered That the respondents herein distribute a copy of this order to each of their officers, agents or representatives engaged in the offering for sale of respondents' distributorships or franchises or in any aspect of the preparation, creation, or placing of advertisements or promotional materials for this purpose.

It -is jl-trther ordered That no provision of this order shall be construed in any way to annul, invalidate, repeal, terminate, modify or exempt respondents from complying with agreements, orders, or directives of any kind obtained by any other agency or act as a defense to actions instituted by municipal or State regulatory agencies. provision of this order shall be construed to imply that any past or future conduct of respondents complies with the rules and regulations , or the statutes administered by the Federal Trade Commission. It is further ordered That the respondents herein shall within sixty (60) days after service upon them of this order, file with the Commission a report, in writing, setting forth in detail the manner and form in which they have complied with this order. 142 FF.DERAL TRADE CmIMISSION DECISIONS Order 87 FTC.

II' THE MATTER OF AMREP CORPORATION Dockel .9018. Order, Jon. IfJ7fi Complaint counsel directed to consider whether to seek preliminary injunction under Section 13(h) of Federal Trade Commis5lon Act, with appropriate motion to Commission seeking such action wi.th notice to res,pondent. Appearances For the Commission: Perry W. Will,ston, Jon R. Calhoun and George E. Schulman.

For the respondent: Solomon Friend, Theodore Schaeier and 1. David Parlwf!' In-house General Counsel for Amrep Corporation, N. Morton J.\1. lvIaneker, Pros kauer, Rose, Goetz Mendelsohn New York City.

ORDER In accordance with the suggestion of the Court in United States Amrep Corp. 75 Cr. 1023 (S. ), that the Commission might apply for a preliminary injunction under Section l:J(b) of the Federal Trade Commission Act 1 , the Commission directs complaint counsel to consider whether a preliminary injunction should be sought. In the event that complaint counsel so conclude, they should make a motion, on notice to respondent, requesting the Commission to take such action. 1 t is so ordered.

, Opinion, dated .Ja11J;lry 1;" 1 7!;. PI'- 11J. , CAVANAGH COMMU"ITI S CORP., ET AL. 14:3 14:3 Order