SECURITIES ACT OF 1933
Release No. 7869 / June 28, 2000

SECURITIES EXCHANGE ACT OF 1934
Release No. 42989 / June 28, 2000

ADMINISTRATIVE PROCEEDING
File No. 3-10055

In the Matter of

MADLYN LEE FERRO
and DWIGHT H. STEPHENS,
Respondent.

ORDER MAKING FINDINGS,
IMPOSING REMEDIAL
SANCTIONS AND ISSUING A
CEASE-AND-DESIST ORDER
AGAINST MADLYN LEE FERRO

I.

The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest to accept the Offer of Settlement ("Offer") submitted by Madlyn Lee Ferro ("Ferro" or "Respondent") pursuant to Rule 240(a) of the Rules of Practice of the Commission, 17 C.F.R. § 201.240(a), for the purpose of settlement of this public administrative and cease-and-desist proceeding instituted by the Commission against her on September 30, 1999 pursuant to Section 8A of the Securities Act of 1933 ("Securities Act") and Sections 15(b) and 21C of the Securities Exchange Act of 1934 ("Exchange Act").

II.

Solely for the purpose of these proceedings 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 any of the findings contained herein, except as to the jurisdiction of the Commission over her and over the subject matter of these proceedings, and as to the matters set forth in Section III.1., below, which are admitted, Ferro consents to the entry by the Commission of this Order.

III.

On the basis of this Order and the Offer, the Commission finds that:1

1. At all relevant times, Respondent Ferro was associated with Rich Management Corp. ("Rich Management"), an unregistered broker-dealer.

2. Between November 1997 and July 17, 1998, Friendly Power Company ("Friendly Power") offered and sold securities to the general public in the form of partnership units in various Friendly Power franchises. Friendly Power sold the securities through a network of telemarketers, including Rich Management. No registration statement was ever filed or was in effect with the Commission in connection with the securities offered and sold by Friendly Power and Rich Management.

3. Ferro marketed the Friendly Power partnership units on behalf of Rich Management through unsolicited telephone calls to prospective investors nationwide.

4. Between November 1997 and July 17, 1998, Ferro sold approximately 20 partnership units, and received commissions of $52,252.70.

5. Respondent Ferro engaged in the aforesaid conduct, and thus willfully violated, and committed or caused violations of, Sections 5(a) and 5(c) of the Securities Act, in that she, directly or indirectly, made use of the means and instruments of transportation and communications in interstate commerce and of the mails, to offer to sell and to sell to members of the public certain securities, namely the Friendly Power partnership units, when no registration statement was filed or in effect as to said securities pursuant to the Securities Act.

6. Respondent Ferro engaged in the aforesaid conduct, and thus willfully violated, and committed or caused violations of, Section 15(a) of the Exchange Act, in that she made use of the means and instruments of transportation and communications in interstate commerce and of the mails to effect transactions in, and to induce and attempt to induce the purchase of, certain securities, namely the Friendly Power partnership units, for the accounts of others, without being registered with the Commission as a broker or dealer.

7. Respondent Ferro has submitted a sworn financial statement and other evidence and has asserted her financial inability to pay a civil money penalty. The Commission has reviewed the sworn financial statement and other evidence provided by Respondent Ferro and has determined that she does not have the financial ability to pay a civil money penalty.

IV.

On the basis of the foregoing, the Commission deems it appropriate and in the public interest to impose the sanctions specified in the Respondent's Offer.

ACCORDINGLY, IT IS ORDERED that:

1. Respondent Ferro be, and hereby is, suspended from association with any broker or dealer for a period of twelve (12) months, effective on the second Monday following the entry of the Order.

2. Respondent Ferro 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) of the Exchange Act.

3. Within thirty (30) days after the end of the twelve month suspension period described in Section IV.1. above, Respondent Ferro shall provide to the Commission, addressed to Glenn S. Gordon, Assistant Regional Director, 1401 Brickell Avenue, Suite 200, Miami, Florida, 33131, an affidavit that she has complied fully with the sanctions described in Section IV of the Order.

4. 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 Respondent Ferro provided accurate and complete financial information at the time such representations were made; (2) determine the amount of the civil money penalty to be imposed; and (3) seek any additional remedies that the Commission would be authorized to impose in this proceeding if Respondent's Offer had not been accepted. No other issue shall be considered in connection with this petition other than whether the financial information provided by Respondent Ferro was fraudulent, misleading, inaccurate or incomplete in any material respect, the amount of administrative penalty to be imposed and whether any additional remedies should be imposed. Respondent Ferro may not, by 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


Footnote

1 The findings herein are made pursuant to Respondent Ferro's Offer of Settlement and are not binding on any other person or entity in this or any other proceeding.