UNITED STATES OF AMERICA Before the SECURITIES AND EXCHANGE COMMISSION INVESTMENT ADVISERS ACT OF 1940 RELEASE NO. 1589 / September 30, 1996 SECURITIES EXCHANGE ACT OF 1934 RELEASE NO. 37763 / September 30, 1996 ADMINISTRATIVE PROCEEDING File No. 3-9133 --------------------------------- : In the Matter of : ORDER PURSUANT TO SECTION : 203(f) OF THE INVESTMENT : ADVISERS ACT OF 1940 AND DOMENIC P. FERRANTE, : SECTIONS 15(b) AND 19(h) OF : THE SECURITIES EXCHANGE ACT OF : 1934, INSTITUTING PROCEEDINGS, Respondent. : MAKING FINDINGS AND IMPOSING : REMEDIAL SANCTIONS : -------------------------------- I. The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest that a public administrative proceeding be instituted pursuant to Section 203(f) of the Investment Advisers Act of 1940 ("Advisers Act") and Sections 15(b) and 19(h) of the Securities Exchange Act of 1934 ("Exchange Act") against Domenic P. Ferrante ("Ferrante"). II. In anticipation of the institution of these proceedings, Ferrante has submitted an Offer of Settlement ("Offer"), 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 in which the Commission is a party, and without admitting or denying the Commission's findings contained herein, except that he admits that he has been convicted as described in paragraph III.B., below, and he also admits the jurisdiction of the Commission over him and the subject matter of this proceeding, Ferrante consents to the issuance of this Order Pursuant to Section 203(f) of the Advisers Act and Sections 15(b) and 19(h) of the Exchange Act, Instituting Proceedings, Making Findings and Imposing Remedial Sanctions (the "Order"). ==========================================START OF PAGE 2====== III. FINDINGS On the basis of this Order and the Offer, the Commission makes the following findings: A. Background 1. Ferrante, 45, of Rehoboth, Massachusetts was registered as an investment adviser, d/b/a First Capital Group ("First Capital") from July 23, 1992 through January 31, 1994, when he withdrew his registration. From February 1979 through May 1994, Ferrante was a registered representative with a series of broker-dealers. 2. From 1979 until December 1995, Ferrante operated an insurance and accounting firm, d/b/a First Financial Group ("First Financial"). Ferrante began providing investment advisory services in April 1991, using the d/b/a First Capital. B. Ferrante's Guilty Plea On January 29, 1996, pursuant to a plea agreement, Ferrante pled guilty to one count of mail fraud and one count of filing a false income tax return. In the plea agreement, and at the plea hearing, Ferrante admitted that, during 1991 through 1995, he diverted investor funds to his own personal use and to pay other investors interest or return principal to them, that he falsely claimed to investors that their money had been embezzled by a law firm and an accounting firm, and that, on or about August 14, 1992, he knowingly filed a false income tax return. On April 26, 1996, Ferrante was sentenced to five years in prison, to be followed by three years of supervised release, and to pay restitution of $1.5 million. IV. Based on the foregoing, the Commission deems it appropriate and in the public interest to impose the sanctions specified in Ferrante's Offer of Settlement. Accordingly, IT IS HEREBY ORDERED, that Ferrante be, and hereby is, barred from association with any broker, dealer, municipal securities dealer, investment adviser or investment company. By the Commission. Jonathan G. Katz Secretary