UNITED STATES OF AMERICA Before the SECURITIES AND EXCHANGE COMMISSION SECURITIES EXCHANGE ACT OF 1934 Release No. 40573 / October 20, 1998 ADMINISTRATIVE PROCEEDING File No. 3-9758 ______________________________ ) In the Matter of ) ORDER INSTITUTING ) PUBLIC ADMINISTRATIVE ) AND CEASE-AND- ) DESIST PROCEEDINGS Certain Broker-Dealers ) PURSUANT TO SECTIONS ) 15(b) AND 21C OF THE Who Failed To File All ) SECURITIES EXCHANGE Or Part of Form BD-Y2K ) ACT OF 1934, MAKING ) FINDINGS, IMPOSING ) REMEDIAL SANCTIONS ) AND ORDERING ) RESPONDENTS TO Respondents. ) CEASE AND DESIST ______________________________) I. The Securities and Exchange Commission (Commission) deems it appropriate and in the public interest to institute public administrative and cease-and-desist proceedings against the Respondents listed in Appendices A, B and C pursuant to Sections 15(b) and 21C of the Securities Exchange Act of 1934 (Exchange Act). In anticipation of the institution of these administrative proceedings, the Respondents listed in Appendices A, B and C have submitted Offers of Settlement 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 without admitting or denying the findings herein, except as to jurisdiction and those facts set forth in paragraph II.A below, which are admitted by the Respondents listed in Appendix A, and those facts set forth in paragraph II.B below, which are admitted by the Respondents listed in Appendix B, and those facts set forth in paragraph II.B below, which are admitted by the Respondents listed in Appendix C, the Respondents listed in Appendices A, B and C consent to the entry of this Order Instituting Public Administrative and Cease-And-Desist Proceedings Pursuant to Sections 15(b) and 21C of the Securities Exchange Act of 1934, Making Findings, Imposing Remedial Sanctions and Ordering Respondents To Cease And Desist. Accordingly, IT IS ORDERED that administrative and cease-and-desist proceedings pursuant to Sections 15(b) and 21C of the Exchange Act be, and hereby are, instituted. II. On the basis of this Order and the Offers of Settlement submitted by the Respondents listed in Appendices A, B and C, the Commission makes the following findings[1]: A. The Respondents listed on Appendix A are all broker-dealers registered with the Commission pursuant to Section 15(b) of the Exchange Act. These Respondents were each required to maintain minimum net capital of $5000 or greater but less than $100,000 pursuant to 17 C.F.R. 240.15c3-1(a)(2) as of July 15, 1998. B. The Respondents listed on Appendices B and C are all broker-dealers registered with the Commission pursuant to Section 15(b) of the Exchange Act. These Respondents were each required to maintain minimum net capital of $100,000 or greater pursuant to 17 C.F.R. 240.15c3-1(a)(2) as of July 15, 1998. C. Rule 17a-5(e)(5) promulgated under Section 17(a) of the Exchange Act provides that every broker or dealer required to maintain minimum net capital of $5000 or greater as of July 15, 1998 must file with the Commission and its designated examining authority (DEA) no later than August 31, 1998, Part I of Form BD-Y2K reflecting the broker- dealer's Year 2000 preparedness as of July 15, 1998. Rule 17a-5(e)(5) further provides that every broker or dealer required to maintain minimum net capital of $100,000 or greater as of July 15, 1998 must also file no later than August 31, 1998, Part II of Form BD-Y2K reflecting the broker-dealers' Year 2000 preparedness as of July 15, 1998. D. As of September 4, 1998, the Respondents listed on Appendix A had not filed Part I of Form BD-Y2K with the Commission or their DEA, the National Association of Securities Dealers (NASD). E. As of September 4, 1998, the Respondents listed on Appendix B had filed Part I but did not file Part II of Form BD-Y2K with the Commission or their DEA, the NASD, except that as of September 18, 1998, Respondent Pellinore Securities Corp. had filed Part I but did not file Part II of Form BD-Y2K with the Commission or its DEA, the NASD. F. As of September 4, 1998, the Respondents listed on Appendix C had not filed Part I or Part II of Form BD-Y2K with the Commission or their DEA, the NASD. G. On September 10, 1998, the NASD sent the Respondents listed on Appendices A and C a letter warning that broker-dealers who failed to file Form BD-Y2K might be subject to formal disciplinary action by NASD Regulation (NASDR) or the institution of an administrative proceeding by the Commission for violations of Sections 17(a) of the Exchange Act, Rule 17a-5 thereunder, or other provisions of the securities laws or NASD rules. The letter gave these Respondents a grace period of until September 21, 1998 within which they could file Form BD-Y2K without any enforcement action being taken against them. H. On September 10, 1998, the NASD sent the Respondents listed on Appendix B a letter warning that broker-dealers who failed to file both Part I and II of Form BD-Y2K might be subject to formal disciplinary action by the NASDR or the institution of an administrative proceeding by the Commission for violations of Sections 17(a) of the Exchange Act, Rule 17a-5 thereunder, or other provisions of the securities laws or NASD rules. The letter gave these Respondents a grace period of until September 21, 1998 within which they could file both Part I and Part II of Form BD-Y2K without any enforcement action being taken against them. I. As of October 2, 1998, the Respondents listed in Appendix A had not filed Part I of Form BD-Y2K with the NASD or the Commission. J. As of October 2, 1998, the Respondents listed in Appendix B had not filed Part II of Form BD-Y2K with the NASD or the Commission. K. As of October 2, 1998, the Respondents listed in Appendix C had not filed Part I or Part II of Form BD-Y2K with the NASD or the Commission. L. Based on the foregoing, Respondents willfully violated Section 17(a) of the Exchange Act and Rule 17a- 5(e)(5) promulgated thereunder. **FOOTNOTES** [1]: The findings herein are made pursuant to each Respondent's Offer of Settlement and are not binding on any other person or entity in this or any other proceeding. III. In view of the foregoing, it is in the public interest to impose the sanctions and cease-and-desist order specified in the Offers of Settlement. Accordingly, IT IS ORDERED that: A. The Respondents listed in Appendices A, B and C be, and hereby are, censured; B. Pursuant to Section 21C of the Exchange Act, the Respondents listed in Appendices A, B and C shall cease and desist from committing or causing any violations, and committing or causing any future violations of Section 17(a) of the Exchange Act and Rule 17a-5(e)(5) thereunder; C. Pursuant to Section 21B of the Exchange Act, each of the Respondents listed in Appendix A shall, prior to the close of business within ten business days after the date of the entry of the Order against them, pay a civil penalty in the amount of $5000 to the United States Treasury. The payment shall be: (1) made by United States postal money order, certified check, bank cashier's check, or bank money order; (2) made payable to the "Securities and Exchange Commission"; (3) hand-delivered or mailed to the Comptroller of the Securities and Exchange Commission, SEC Operations Center, 6432 General Green Way, Alexandria, VA 22312; and (4) submitted with a cover letter that identifies by firm name each Respondent as a Respondent in this proceeding and the file number of this proceeding. Copies of the cover letter and money order or check shall be sent to Mary Keefe, Director, Midwest Regional Office, Securities and Exchange Commission, 500 W. Madison St., Ste. 1400, Chicago, IL 60661; D. Pursuant to Section 21B of the Exchange Act, each of the Respondents listed in Appendix B shall, prior to the close of business within ten business days after the date of the entry of the Order against them, pay a civil penalty in the amount of $15,000 to the United States Treasury. The payment shall be: (1) made by United States postal money order, certified check, bank cashier's check, or bank money order; (2) made payable to the "Securities and Exchange Commission"; (3) hand-delivered or mailed to the Comptroller of the Securities and Exchange Commission, SEC Operations Center, 6432 General Green Way, Alexandria, VA 22312; and (4) submitted with a cover letter that identifies by firm name each Respondent as a Respondent in this proceeding and the file number of this proceeding. Copies of the cover letter and money order or check shall be sent to Mary Keefe, Director, Midwest Regional Office, Securities and Exchange Commission, 500 W. Madison St., Ste. 1400, Chicago, IL 60661; and E. Pursuant to Section 21B of the Exchange Act, each of the Respondents listed in Appendix C shall, prior to the close of business within ten business days after the date of the entry of the Order against them, pay a civil penalty in the amount of $25,000 to the United States Treasury. The payment shall be: (1) made by United States postal money order, certified check, bank cashier's check, or bank money order; (2) made payable to the "Securities and Exchange Commission"; (3) hand-delivered or mailed to the Comptroller of the Securities and Exchange Commission, SEC Operations Center, 6432 General Green Way, Alexandria, VA 22312; and (4) submitted with a cover letter that identifies by firm name each Respondent as a Respondent in this proceeding and the file number of this proceeding. Copies of the cover letter and money order or check shall be sent to Mary Keefe, Director, Midwest Regional Office, Securities and Exchange Commission, 500 W. Madison St., Ste. 1400, Chicago, IL 60661. By the Commission. Jonathan G. Katz Secretary APPENDIX A: 1. Bowling Green Securities, Inc. 2. Intra Network Securities, Inc. 3. Investment Services Capital Corp. 4. Mayhill Agency, Inc. 5. Neutral Switch, Inc. 6. The Transportation Group (Securities) Limited 7. FPS Broker Services, Inc. 8. The Partners Financial Group, Inc. APPENDIX B: 1. Arbitrage Partners, Inc. 2. Bluestone Capital Partners, L.P. 3. General Re Securities Corporation 4. Haberman Brothers 5. Mahler & Emerson, Inc. 6. Pellinore Securities Corp. 7. Rensselaer Securities Corp. 8. Robert E. Meyers & Co. APPENDIX C: 1. M.R. Beal & Company 2. First of America Securities, Inc. 3. King Financial Services, Inc.