UNITED STATES OF AMERICA Before the SECURITIES AND EXCHANGE COMMISSION SECURITIES ACT OF 1933 Release No. 7332 / September 19, 1996 SECURITIES EXCHANGE ACT OF 1934 Release No. 37700 / September 19, 1996 ADMINISTRATIVE PROCEEDING File No. 3-9084 ______________________________ : In the Matter of : ORDER INSTITUTING CEASE-AND- : DESIST AND ADMINISTRATIVE VINCENT P. LOBAN and : PROCEEDINGS PURSUANT TO FIRST CAPITAL MARKETING GROUP : SECTION 8A OF THE SECURITIES : ACT OF 1933 AND SECTIONS : 15(b)(4), 15(b)(6), 19(h) AND : 21C OF THE SECURITIES EXCHANGE : ACT OF 1934, MAKING FINDINGS, : AND IMPOSING REMEDIAL SANCTIONS ______________________________: I. The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest to institute cease- and-desist and public administrative proceedings pursuant to Section 8A of the Securities Act of 1933 ("Securities Act") and Sections 15(b)(4), 15(b)(6), 19(h) and 21C of the Securities Exchange Act of 1934 ("Exchange Act") against Vincent P. Loban ("Loban") and First Capital Marketing Group ("FCMG"), collectively referred to herein as the Respondents. Accordingly, IT IS HEREBY ORDERED that said proceedings be, and hereby are, instituted. II. In anticipation of the institution of these proceedings, Respondents have 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, without admitting or denying the findings contained herein, except that Respondents admit the jurisdiction of the Commission over them and over the subject matter of these proceedings, the Respondents consent to the entry of the findings and remedial sanctions set forth below. ==========================================START OF PAGE 2====== III. On the basis of this Order and Respondents' Offer, the Commission finds that:-[1]- A. Loban currently is associated with Tower Equities, Inc., a registered broker-dealer. B. From about February 1993, through at least February 1996, Loban owned and operated FCMG, a sole proprietorship located in Roseville, California. C. During the period from about February 1994 through about May 1995, Loban and FCMG, through a network of independent insurance agents, marketed and sold nine-month notes ("Notes"), pursuant to an agreement with the issuer of the Notes, Direct Participation Services, Inc., d/b/a Government Financial ("GF"). D. Throughout the period specified in paragraph III.B., FCMG was not registered with the Commission as a broker or dealer pursuant to Section 15(b) of the Exchange Act. Nor was Loban associated with a registered broker or dealer. E. At the time the Notes were offered and sold, no registration statement covering the Notes had been filed or was in effect. Instead, the Notes were sold in purported reliance upon Section 3(a)(3) of the Securities Act. The Section 3(a)(3) exemption was unavailable, however, because the Notes were: (1) not prime quality negotiable commercial paper; (2) offered and sold to the general public; and (3) not issued to facilitate well recognized types of current operational business requirements. Nor was any other exemption from the registration requirements of Sections 5(a) and 5(c) of the Securities Act available. F. Accordingly, Loban and FCMG willfully violated Section 5(a) of the Securities Act by acting as underwriters for GF, in that they, directly and indirectly, made use of the means or instruments of transportation or communication in interstate commerce and the mails, to sell securities, and carried and caused to be carried through the mails and interstate commerce, by the means and instruments of transportation, securities for the purpose of sale and delivery after sale, for an issuer in connection with the distribution of securities, namely the Notes issued by GF, and participated and had a direct or indirect participation in such undertaking, when no registration statement ---------FOOTNOTES---------- -[1]- The findings herein are made pursuant to Respondents' Offer and are not binding on any other person or entity named as a respondent in this or any other proceeding. ==========================================START OF PAGE 3====== was filed or in effect and no exemption was available as to such securities pursuant to the Securities Act. G. Moreover, Loban and FCMG willfully violated Section 5(c) of the Securities Act by acting as underwriters for GF, in that they, directly and indirectly, made use of the means or instruments of transportation or communication in interstate commerce, and the mails, to offer to sell securities for an issuer in connection with the distribution of securities, namely the Notes issued by GF, and participated and had a direct or indirect participation in such undertaking, when no registration statement was filed or in effect and no exemption was available as to such securities pursuant to the Securities Act. H. As a consequence, Loban and FCMG also willfully violated Section 15(a)(1) of the Exchange Act, in that they made use of the mails and means and instrumentalities of interstate commerce to effect transactions in, and induce the purchase of, securities (other than an exempted security or commercial paper, bankers' acceptances, or commercial bills), without FCMG first having registered with the Commission as a broker or dealer, and without Loban first having been associated with a registered broker or dealer. IV. Based upon the foregoing, the Commission deems it appropriate and in the public interest to impose the sanctions specified in the Respondents' Offer. Accordingly, IT IS HEREBY ORDERED that Respondents Loban and FCMG be, and hereby are, censured by the Commission for their violations of Sections 5(a) and 5(c) of the Securities Act and Section 15(a)(1) of the Exchange Act; IT IS HEREBY FURTHER ORDERED, pursuant to Section 8A of the Securities Act and Section 21C of the Exchange Act, that Respondents Loban and FCMG cease and desist from committing or causing any violation and any future violation of Sections 5(a) and 5(c) of the Securities Act and Section 15(a)(1) of the Exchange Act; IT IS HEREBY FURTHER ORDERED, pursuant to Sections 15(b)(4) and 15(b)(6), that Respondents Loban and FCMG permanently refrain from offering and selling unregistered commercial paper; and IT IS HEREBY FURTHER ORDERED that, prior to the close of business on the date of this Order, Respondents Loban and FCMG pay a civil money penalty in the aggregate amount of $5,000. 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 Securities and Exchange Commission; (C) ==========================================START OF PAGE 4====== hand-delivered to the Comptroller, Securities and Exchange Commission, 450 5th Street, N.W., Washington, D.C. 20549; and (D) submitted under cover letter which identifies Loban and FCMG as Respondents in these proceedings, the file number of these proceedings, a copy of which cover letter and money order or check shall be sent to Sandra J. Harris, Associate Regional Director, Division of Enforcement, Securities and Exchange Commission, 5670 Wilshire Boulevard, 10th Floor, Los Angeles, California 90036. By the Commission. Jonathan G. Katz Secretary