UNITED STATES OF AMERICA Before the SECURITIES AND EXCHANGE COMMISSION INVESTMENT COMPANY ACT OF 1940 Release No. 23470 / September 28, 1998 ADMINISTRATIVE PROCEEDING File No. 3-9732 ------------------------------------------------------------------ ORDER INSTITUTING PUBLIC In the Matter of ADMINISTRATIVE AND CEASE-AND-DESIST CONCORD GROWTH CORPORATION, PROCEEDING PURSUANT TO SECTION 8A OF THE SECURITIES ACT OF 1933 Respondent. AND SECTIONS 9(b) AND 9(f) OF THE INVESTMENT COMPANY ACT OF 1940, MAKING FINDINGS, IMPOSING CIVIL PENALTIES AND A CEASE-AND-DESIST ORDER ------------------------------------------------------------------ I. The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest that a public administrative and cease-and-desist proceeding be, and hereby is, instituted pursuant to Section 8A of the Securities Act of 1933 ("Securities Act") and Sections 9(b) and 9(f) of the Investment Company Act of 1940 ("Investment Company Act") against Concord Growth Corporation ("Concord" or the "Respondent"). II. In anticipation of the institution of this proceeding, the Respondent has submitted an Offer of Settlement ("Offer"), which the Commission has determined to accept. Solely for the purpose of this proceeding and any other proceedings brought by or on behalf of the Commission or to which the Commission is a party, and prior to a hearing pursuant to the Commission's Rules of Practice, 17 C.F.R.  201.100 et seq., and without admitting or denying any findings contained herein, except as to the jurisdiction of the Commission over it and over the subject matter of this proceeding, the Respondent consents to the issuance of this Order Instituting Public Administrative and Cease-and-Desist Proceeding Pursuant to Section 8A of the Securities Act of 1933 and Sections 9(b) and 9(f) of the Investment Company Act of 1940, Making Findings, Imposing Civil Penalties and a Cease-and-Desist Order ("Order"). III. FINDINGS On the basis of this Order and the Respondent's Offer, the Commission finds that[1]: RESPONDENT A. Concord, founded in 1985, is a commercial finance company which makes asset-backed loans to businesses which typically are unable to qualify for conventional bank loans. BACKGROUND B. In or about early 1991, the president of a brokerage firm which acted as Concord's private placement agent heard a business seminar presentation on how to start and administer a mutual fund. The brokerage firm president later discussed with Concord's president the concept of a mutual fund that would invest in asset-backed loans like those originated and serviced by Concord. Thereafter, the seminar speaker, the president of the brokerage firm, Concord's chairman and chief executive officer, Concord's president, and others, participated in the formation of a registered investment company (the "Fund"). One of the Fund's initial four directors was Concord's chairman, chief executive officer, and 20% owner. THE AFFILIATED TRANSACTIONS C. From October 8, 1992 to May 3, 1994, the Fund's entire investment portfolio consisted of loan participations purchased from, and originated and serviced by, Concord. During this period, one Fund director was simultaneously Concord's chairman of the board, chief executive officer, and 20% shareholder. Thus, Concord, acting as principal, sold loan participations to the Fund while an affiliate of an affiliate of the Fund. No prior approval to engage in these affiliate transactions was sought or received from the Commission. THE VIOLATIONS D.By virtue of the conduct described in paragraphs IV. A. through C., Concord willfully violated Sections 17(a)(1) and 17(a)(2) of the Investment Company Act in that, while acting as principal, it knowingly sold securities to the Fund while affiliated with a person affiliated with the Fund. IV. The Respondent has submitted an Offer of Settlement in which, without admitting or denying the findings herein, it consents to the Commission's entry of this Order. Based on the foregoing, the Commission deems it appropriate and in the public interest to accept the Respondent's Offer of Settlement and institute the Order specified in the Offer of Settlement submitted by the Respondent. Accordingly, IT IS HEREBY ORDERED, pursuant to Section 8A of the Securities Act and Sections 9(b) and 9(f) of the Investment Company Act, that: Concord cease and desist from committing or causing any violation and any future violation of Sections 17(a)(1) and 17(a)(2) of the Investment Company Act; and Concord pay, within 30 days of the entry of this Order, a civil money penalty in the amount of $10,000 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 Securities and Exchange Commission; (C) hand-delivered or mailed to the Comptroller, Securities and Exchange Commission, Operations Center, 6432 General Green Way, Stop 0-3, Alexandria, VA 22312; and (D) submitted under a cover letter that identifies Concord Growth Corporation as a Respondent in these proceedings, and the file number of these proceedings, a copy of which cover letter and money order or check shall be sent to Ronald E. Wood, Assistant Regional Director, Pacific Regional Office, Securities and Exchange Commission, 5670 Wilshire Boulevard, 11th Floor, Los Angeles, California, 90036. By the Commission. Jonathan G. Katz Secretary **FOOTNOTES** [1]: The findings herein are made pursuant to the Respondent's Offer of Settlement and are not binding on any other person or entity named as a respondent in this or any other proceeding.