UNITED STATES OF AMERICA Before the SECURITIES AND EXCHANGE COMMISSION SECURITIES ACT OF 1933 Release No. 7651 / March 1, 1999 SECURITIES EXCHANGE ACT OF 1934 Release No. 41125 / March 1, 1999 ADMINISTRATIVE PROCEEDING File No. 3 - 9157 _____________________ : In the Matter of : ORDER MAKING FINDINGS, : IMPOSING REMEDIAL SANCTIONS Richard Cedrone, : AND IMPOSING A CEASE-AND- : DESIST ORDER : Respondent. : _____________________: I. In connection with a public administrative proceeding instituted against him pursuant to Section 8A of the Securities Act of 1933 ("Securities Act") and Sections 15(b) and 21C of the Securities Exchange Act of 1934 ("Exchange Act"), Richard Cedrone ("Cedrone") has submitted an Offer of Settlement ("Offer") to the Securities and Exchange Commission ("Commission"), which the Commission has determined to accept. Solely for the purpose of this proceeding and any other proceeding brought by or on behalf of the Commission or in which the Commission is a party, and without admitting or denying the findings contained herein, except as to jurisdiction and the facts set forth in Paragraphs II.D. through II.E. below, which are admitted, Cedrone consents to the entry of the findings and remedial sanctions set forth below. II. On the basis of this Order and the Offer submitted by Cedrone, the Commission makes the following findings[1]: A. Richard Cedrone ("Cedrone"), at the time of the conduct in question was 33 years old, and a resident of Florida. Although Cedrone was previously a registered representative, at the time of the conduct in question he was not, and currently is not, associated with a registered broker-dealer. B. Rose International, Inc. is located in Tulsa, Oklahoma. It purports to manufacture dyes and coloring agents in India. The company's stock is listed on the Over- the-Counter Bulletin Board pursuant to Rule 15c2-11 of the Exchange Act under the symbol DYES. C. During the period from at least March 1996 through May 1996, Cedrone offered to pay, and did pay, undisclosed compensation to person(s) whom he believed to be registered representative(s) or registered principal(s), to induce such registered representatives, registered principals or persons to purchase DYES stock for the accounts of customers. For example, between on or about May 31, 1996 and on or about June 5, 1996, Cedrone directly or indirectly transferred, or caused to be transferred, 1,250 shares of DYES stock in undisclosed compensation to a broker-dealer for having previously purchased 5,000 shares of DYES at approximately $3.375 per share by the broker- dealer. Accordingly, Cedrone willfully violated, and committed and caused violations of, Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. D. On February 10, 1997, Cedrone pled guilty in the United States District Court for the Southern District of New York to one felony count of wire fraud in violation of Section 1343 of Title 18, United States Code. United States v. Richard Cedrone, Case No. 96 Cr. 1064 (DLC). E. The indictment underlying Cedrone's guilty plea alleged, inter alia, that from in or about February 1996 through in or about June 1996, Cedrone "unlawfully, wilfully, and knowingly did devise and intend to devise a scheme and artifice to defraud and to obtain money and property by means of false and fraudulent pretenses, representations, and promises[.]" Moreover, Cedrone did devise "a scheme and artifice to pay compensation to the Broker without the knowledge or approval of the Broker's clients, in order unlawfully to induce the Broker to cause those clients to purchase the common stock of [Rose International Inc.]" Finally, the indictment alleges that Cedrone, "for the purpose of executing said scheme and artifice, did cause to be transmitted by means of wire communication in interstate and foreign commerce . . . a fraudulent consulting agreement by facsimile from Delray Beach, Florida, to the Broker in New York, New York." III. Based on the foregoing, the Commission deems it appropriate and in the public interest to impose the sanctions and issue the cease-and-desist order as specified in the Offer of Settlement. Accordingly, IT IS HEREBY ORDERED that: 1. Respondent Cedrone, effective immediately, cease and desist from committing or causing any violations and any future violations of Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder; 2. Respondent Cedrone, effective immediately, is barred from participation in penny stock offerings; and 3. Respondent Cedrone, prior to the close of business on the thirtieth business day after the date of the Order, pay disgorgement in the amount of $500, plus interest from March 1996 to the date of the Order,[2] to the United States Treasury. Such payment shall be: (a) made by United States postal money order, certified check, bank cashier's check or bank money order; (b) made payable to the U.S. Securities and Exchange Commission; (c) hand-delivered to the Comptroller, Securities and Exchange Commission, Mail Stop 0-3, 450 Fifth Street, N.W., Washington, D.C. 20549; and (d) submitted under cover letter which identifies Cedrone as the Respondent in this proceeding, the file number of this proceeding, 3-9157, and a copy of which cover letter and money order or check shall be sent to Thomas A. Capezza, Staff Attorney, Northeast Regional Office, Securities and Exchange Commission, 7 World Trade Center, 13th Floor, New York, New York 10048. By the Commission. Jonathan G. Katz Secretary **FOOTNOTES** [1]: Any findings contained herein are made pursuant to Respondent Cedrone's Offer of Settlement and are not binding on any other person or entity named as a respondent in this or any other proceeding. [2]: The amount of prejudgment interest is to be calculated using the Internal Revenue Service late payment rate.