UNITED STATES OF AMERICA Before the SECURITIES AND EXCHANGE COMMISSION SECURITIES EXCHANGE ACT OF 1934 Release No. 39152 / September 30, 1997 ADMINISTRATIVE PROCEEDING File No. 3-9455 : : ORDER INSTITUTING PUBLIC In the Matter of : PROCEEDINGS, MAKING : FINDINGS AND IMPOSING MARK COLEMAN GRAVES : REMEDIAL SANCTIONS : Respondent. : : : I. The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest that administrative proceedings be instituted pursuant to Sections 15(b) and 19(h) of the Securities Exchange Act of 1934 ("Exchange Act") against Mark Coleman Graves ("Graves"). In anticipation of the institution of these proceedings, Graves has submitted an Offer of Settlement ("Offer") 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 for those set forth in paragraphs II.A. and II.E. below, which are admitted, Graves by his Offer consents to the findings and the imposition of the remedial sanctions set forth below. Accordingly, IT IS ORDERED that proceedings against Graves be, and hereby are, instituted. ======END OF PAGE 1====== II. On the basis of this Order, and the Offer submitted by Graves, the Commission finds that: A. Graves was employed, at all times relevant to this proceeding, as a registered representative with Janney Montgomery Scott, Inc. ("Janney"), a broker-dealer registered with the Commission, in its Philadelphia, Pennsylvania branch office. Graves' employment with Janney was terminated on August 16, 1996. He has not been employed in the securities industry since his termination from Janney. B. From July 1988 until August 1996, Graves willfully violated Section 17(a) of the Securities Act of 1933 ("Securities Act") in that he, in the offer and sale of securities, by the use of the means and instruments of transportation and communication in interstate commerce, and by the use of the mails, directly and indirectly, employed devices, schemes, and artifices to defraud; obtained money and property by means of untrue statements of material fact and omitted to state material facts necessary to make the statements made, in the light of the circumstances under which they were made, not misleading; and engaged in transactions, practices and courses of business which would and did operate as a fraud and deceit upon the purchasers of such securities. C. As part of the aforesaid conduct described in paragraph II.B. above, from July 1988 until August 1996, Graves engaged in a fraudulent scheme through which he misappropriated more than $1.9 million from approximately 25 customers. Graves induced numerous Janney customers to issue him checks by soliciting them to purchase various types of securities. Upon obtaining the checks, Graves merely deposited them into his bank account and used the money for his personal expenses. Graves also utilized fictitious documents to effect unauthorized transfers of customer funds. Graves prepared fictitious letters of authorization and other documents, and forged customers' signatures. He then used the documents to effect transfers between Janney customer accounts. Once the money had been transferred, Graves persuaded the customers to issue him checks by falsely claiming that the funds had been transferred in error and that he would correct the mistake. Graves then misappropriated the funds. In order to conceal his fraudulent acts, Graves made a myriad of false and misleading statements to his customers. He also effected transfers between customer accounts in order to replace previously misappropriated funds. D. From July 1988 until August 1996, Graves willfully violated Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, in that he, in connection with the purchase and sale ======END OF PAGE 2====== of securities, by the use of the means and instrumentalities of interstate commerce, and by the use of the mails, directly and indirectly, employed devices, schemes, and artifices to defraud; made untrue statements of material fact and omitted to state material facts necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading; and engaged in acts, practices and courses of business which would and did operate as a fraud and deceit upon the purchasers of such securities, as more fully described in paragraphs II.B. and II.C. above. E. Based upon the conduct described in paragraph II.C. above, Graves pled guilty to one count of mail fraud in violation of 18 U.S.C.  1341. United States v. Mark Coleman Graves (E.D. Pa., Crim. No. 96-506). On July 23, 1997, Graves was sentenced to 30 months imprisonment plus a period of probation, and ordered to pay restitution of $1,854,000. F. Graves has submitted a sworn financial statement and other evidence and has asserted his financial inability to pay a civil penalty. The Commission has reviewed the sworn financial statement and other evidence provided by Graves and has determined that Graves does not have the financial ability to pay a civil penalty. III. On the basis of the foregoing, the Commission deems it appropriate and in the public interest to impose the sanctions and other relief specified in the Offer. Accordingly, IT IS HEREBY ORDERED that: 1. Graves be, and hereby is, barred from association with any broker, dealer, municipal securities dealer, investment company or investment adviser; and 2. the Division of Enforcement ("Division") may, at any time following the entry of this Order, petition the Commission to: (1) reopen this matter to consider whether Graves provided accurate and complete financial information at the time such representations were made; (2) determine the amount of the civil penalty to be imposed; and (3) seek any additional remedies that the Commission would be authorized to impose in this proceeding if Graves' offer of settlement had not been accepted. No other issues shall be considered in connection with this petition other than whether the financial information provided by Graves was fraudulent, misleading, inaccurate or incomplete in any material respect, the amount of civil penalty to be imposed and whether any additional remedies should be imposed. Graves may not, by ======END OF PAGE 3====== way of defense to any such petition, contest the findings in this Order or the Commission's authority to impose any additional remedies that were available in the original proceeding. By the Commission. Jonathan G. Katz Secretary ======END OF PAGE 4======