UNITED STATES OF AMERICA Before the SECURITIES AND EXCHANGE COMMISSION SECURITIES ACT OF 1933 Release No. 7370 / December 10, 1996 SECURITIES EXCHANGE ACT OF 1934 Release No. 38036 / December 10, 1996 ADMINISTRATIVE PROCEEDING File No. 3-9200 _________________________ : In the Matter of : ORDER INSTITUTING PROCEEDINGS : PURSUANT TO SECTION 8A OF THE ROBERT TATAROWICZ, : SECURITIES ACT OF 1933 AND SECTION : 21C OF THE SECURITIES EXCHANGE ACT Respondent. : OF 1934, AND CEASE AND DESIST ORDER _________________________: I. The Commission deems it appropriate that public administrative proceedings be instituted against Robert Tatarowicz ("Tatarowicz") 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, Tatarowicz has submitted an Offer of Settlement which 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 to which the Commission is a party, and without admitting or denying the findings herein, Tatarowicz consents to the entry of the Order herein. III. FINDINGS On the basis of Respondent's Offer of Settlement, the Commission finds the following: A. Background On January 11, 1996, the Commission, along with the Commodity Futures Trading Commission, instituted a civil injunctive action in U.S. District Court for the District of New Jersey entitled SEC and CFTC v. Michael Tropiano d/b/a Ardmore Financial Services (96-CV-228 (JEI). In that action, the plaintiffs alleged that the defendant engaged in a scheme to defraud investors by offering and selling securities in the form of investment contracts in pools purportedly formed for the purpose of funding commodity futures trading. From 1989 through 1995, the defendant raised approximately $2.9 million from 118 investors. The amounts invested ranged from $2000 to more than $250,000. After initially conducting some commodity futures trading, the defendant in 1992 ceased all trading activity. The defendant thereafter generated false account statements reflecting fictitious profitable trades and continued to raise money from investors by falsely representing that he had engaged in profitable trading. In the above-referenced civil action, the plaintiffs alleged that the defendant committed fraud, failed to register the investment contract securities with the Securities and Exchange Commission, failed to register as a broker-dealer, and failed to maintain his commodity pool operator registration with the Commodity Futures Trading Commission. The Complaint charged that by this conduct, Tropiano violated Sections 5 and 17(a) of the Securities Act, Sections 10(b) and 15(a) of the Exchange Act and Rule 10b-5 thereunder, and Sections 4b(a), 4m, 4o, and 9(a) of the Commodity Exchange Act. The defendant consented to the entry of a Preliminary Injunction which enjoins him from engaging in violations of those provisions, freezes his personal assets as well as all investor funds under his possession or control, and orders him to account for the use of investor funds. In addition, the U.S. Attorney for the District of New Jersey filed a criminal complaint charging Tropiano with mail fraud for the activities underlying the civil action. B. Respondent's Role and Violations In 1990, Respondent Tatarowicz began investing with Tropiano in commodity pools. Beginning in 1991, Tatarowicz began locating investors for the commodity pool programs supposedly managed by Tropiano. Tatarowicz became licensed with the National Futures Association, under the authority of the Commodity Futures Trading Commission, under the registration of Ardmore Financial Services (which registration was withdrawn by Tropiano in 1993). Through his participation in the offer and sale of these interests, Tatarowicz made net income of slightly less than $125,000. He also invested over $123,000 of his own money in the alleged commodity pools, none of which has been recovered by Tatarowicz, and as to which he has waived any and all claims in the civil action brought against Tropiano, and in all other actions. Notwithstanding the fact that the offering of the commodity pool interests by Tropiano and Tatarowicz constituted the public offer and sale of securities, the securities were not registered with the Commission as required by Section 5 of the Securities Act. Moreover, Tatarowicz was neither registered with the Commission as a broker or dealer pursuant to Section 15(a) of the Exchange Act, nor associated with a registered broker or dealer. Based upon the above, the Commission finds that Tatarowicz committed violations of Section 5 of the Securities Act and Section 15(a) of the Exchange Act. IV. ORDER Accordingly, IT IS HEREBY ORDERED, pursuant to Section 8A of the Securities Act and Section 21C of the Exchange Act, that: A. Tatarowicz cease and desist from committing or causing any violation, and any future violation, of Section 5 of the Securities Act and Section 15(a) of the Exchange Act; and B. Pursuant to the terms of the Offer of Settlement submitted by Tatarowicz, and in lieu of disgorgement, Tatarowicz relinquishes any and all claims for damages, restitution, rescission, compensation, or other monetary recovery he may have against Michael Tropiano, Ardmore Financial Services, and/or the Receiver appointed in the civil action. Nothing herein shall preclude Tatarowicz from exercising any rights of joinder, contribution or indemnification he may have in any civil action brought against Tatarowicz. By the Commission. _______________________________ Jonathan G. Katz Secretary