UNITED STATES OF AMERICA
SECURITIES ACT OF 1933
The Securities and Exchange Commission ("Commission") deems it appropriate that a public cease-and-desist proceeding pursuant to Section 8A of the Securities Act of 1933 ("Securities Act") be instituted against respondent Joseph J. Laferty ("Laferty").
In anticipation of the institution of this cease-and-desist proceeding, Laferty 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 that Laferty admits the jurisdiction of the Commission over him and over the subject matter of this proceeding, Laferty consents to the entry of this Order Instituting Public Cease-and-Desist Proceeding, Making Findings and Issuing a Cease-and-Desist Order ("Order").
Accordingly, IT IS ORDERED that a proceeding pursuant to Section 8A of the Securities Act be, and hereby is, instituted.
On the basis of this Order and Laferty's Offer, the Commission finds that:1
Laferty, age 65, resides in Fountain Valley, California. From December 1995 to at least March 1998, Laferty was the chief executive officer, chief financial officer and a director of Face to Face Financial Inc., dba FTF Financial Corp. ("FTF").
From December 1995 to March 1998, FTF conducted four unregistered preferred stock offerings, raising over $4.3 million from approximately 400 investors nationwide. FTF's salespeople solicited potential investors nationwide by, among other things, cold-calling people whose names appeared on lead lists. Laferty, an officer and director of FTF, reviewed and had final approval of FTF's offering documents and authorized payment for lead lists for use in FTF's offerings.
C. LEGAL ANALYSIS
Sections 5(a) and 5(c) of the Securities Act prohibit the offer or sale of securities unless the securities are registered with the Commission or are exempt from registration. Laferty, by reviewing FTF's offering documents and authorizing payment for lead lists for use in FTF's offerings, directly or indirectly, through the use of the means or instruments of transportation or communication in interstate commerce or the mails, offered to sell or sold securities, or, directly or indirectly, carried or caused such securities to be carried through the mails or in interstate commerce, for the purpose of sale or for delivery after sale. No registration statement has been filed with the Commission or has been in effect with respect to these securities, and the securities are not exempt from registration. By reason of the foregoing, Laferty violated Sections 5(a) and 5(c) of the Securities Act.
Based on the foregoing, the Commission deems it appropriate to accept the Offer submitted by Laferty.
Accordingly, IT IS HEREBY ORDERED that, pursuant to Section 8A of the Securities Act, Laferty cease and desist from committing or causing any violation and any future violation of Sections 5(a) and 5(c) of the Securities Act.
By the Commission.
Jonathan G. Katz