Lawrence B. Irwin and Burton Financial Management Associates, Inc.

SECURITIES ACT OF 1933
Release No. 8047 / December 21, 2001

SECURITIES EXCHANGE ACT OF 1934
Release No. 45187 / December 21, 2001

INVESTMENT ADVISERS ACT OF 1940
Release No. 2005 / December 21, 2001

ADMINISTRATIVE PROCEEDING
File No.3-10661

I.

The Securities and Exchange Commission (Commission) deems it appropriate and in the public interest to institute (A) public administrative and cease-and-desist proceedings against Respondent Lawrence B. Irwin (Irwin) pursuant to Section 8A of the Securities Act of 1933 (Securities Act), Sections 15(b) and 21C of the Securities Exchange Act of 1934 (Exchange Act) and Section 203(f) of the Investment Advisers Act of 1940 (Advisers Act), and (B) cease-and-desist proceedings against Burton Financial Management Associates, Inc. (BFMA) pursuant to Section 8A of the Securities Act and Section 21C of the Exchange Act.

In anticipation of the institution of these proceedings, Respondents have submitted an Offer of Settlement (Offer), which the Commission has determined to accept. Solely for the purposes of these proceedings and any other proceedings brought by or on behalf of the Commission, or in which the Commission is a party, and without admitting or denying the Commission's findings contained herein, except to the Commission's jurisdiction over them and the subject matter of these proceedings, which are admitted, Respondents consent to the entry of the Order Instituting Public Administrative and Cease-and-Desist Proceedings Pursuant To Section 8A of the Securities Act of 1933, Sections 15(b) and 21C of the Securities Exchange Act of 1934 and Section 203(f) of the Investment Advisers Act of 1940, Making Findings, Imposing Remedial Sanctions, and Issuing a Cease-and-Desist Order (Order).

II.

On the basis of the Order and the Respondents' Offer, the Commission makes the following findings:

RESPONDENTS

A. Irwin, age 52, resides in Barrington, Illinois. He is the sole shareholder, officer and director of BFMA. In addition, he is a shareholder of Burton Investment Management, Inc. (BIMI) (n/k/a Balasa and Hoffman), a registered investment adviser. During the relevant period, Irwin was also the president and a director of BIMI. Irwin is also a C.P.A. and a certified financial planner.

B. BFMA is an Illinois corporation formed by Irwin in 1978 with its principal place of business in Schaumburg, Illinois. From 1979 to at least December 1998, BFMA issued and through Irwin, offered and sold unregistered promissory notes (BFMA Notes). From the early 1980s through at least December 1998, BFMA issued, and Irwin and others offered and sold, several Illinois real estate limited partnerships (the BFMA Limited Partnerships) for which BFMA served as the general partner. BFMA has never been registered with the Commission in any capacity.

C. In the offer and sale of the BFMA Notes and BFMA Limited Partnerships, Irwin acted as an unregistered broker-dealer.

FACTS

The BFMA Notes

D. From 1979 through at least December 1998, BFMA issued, and through Irwin, offered and sold unregistered, unsecured promissory notes. Irwin solicited investments in the BFMA Notes through letters that he mailed to his clients, which generally described the notes as having a five year maturity and promised the client a return that was approximately 1 to 2 points above the prime rate. If a client expressed an interest in purchasing a BFMA Note, Irwin followed up by telephone or in person to close the deal. In exchange for an investment, a client received a promissory note issued by BFMA and signed by Irwin as president of BFMA.

E. From January 1997 through December 1997, BFMA and Irwin sold at least $1,439,544 of BFMA Notes to investors. At least one of these investors resided outside of Illinois and at least one was non-accredited.

F. When soliciting investments in the BFMA Notes, Irwin made misrepresentations and omissions of material facts to investors. Specifically, Irwin told certain investors one or more of the following: the BFMA Notes were of an investment quality similar to a bank certificate of deposit; the BFMA Note proceeds would be pooled to purchase real property that would generate the income to repay the notes; the BFMA Note proceeds would be invested in property owned by BFMA Limited Partnerships and secured by a second mortgage on the property; and the BFMA Note proceeds would be used in connection with BFMA's real estate operations. BFMA never provided financial information regarding its operations to investors.

G. Contrary to these representations, Irwin deposited the BFMA Note proceeds into BFMA's operating account over which he had sole control. Further, the BFMA Note proceeds were commingled with BFMA's other funds. BFMA and Irwin then made "loans" to Irwin of approximately $1.5 million and to his wife's business for approximately $1.3 million. These "loans" required no regular principal or interest payments and were of indefinite duration. In addition, BFMA used the BFMA Note proceeds in the BFMA operating account to make unsecured loans to the BFMA Limited Partnerships totaling approximately $3.2 million. These uses of BFMA Note proceeds were never disclosed to investors.

The BFMA Limited Partnerships

H. From the early 1980s through at least December 1998, BFMA issued and through Irwin and others offered and sold interests in various Illinois real estate limited partnerships to Irwin's accounting clients. Beginning in 1981, BFMA formed one or two BFMA Limited Partnerships per year. Irwin earned commissions ranging from four to eight percent of the amount that he raised for each partnership.

I. To induce investors to invest in the BFMA Limited Partnerships, Irwin made misrepresentations and omissions of material facts to investors. Specifically, Irwin orally represented to investors that the partnerships were safe investments and involved little risk. Irwin also gave investors private placement memoranda that described the nature of the investments and use of investor funds. The private placement memoranda stated that the partnerships may invest excess income of the partnership in interest bearing accounts or in short term loans to other entities.

J. Contrary to these representations, Irwin caused the BFMA Limited Partnerships to transfer partnership proceeds to BFMA before the partnerships ever purchased property or generated income. BFMA and Irwin deposited and commingled some of the BFMA Limited Partnership proceeds with other funds in BFMA's operating account and used them at Irwin's discretion as described in paragraph II.G. above. These uses of BFMA Limited Partnership proceeds were never disclosed to investors.

VIOLATIONS

K. Irwin willfully violated and BFMA violated Sections 5(a) and 5(c) of the Securities Act, as described in paragraphs II.A. through G. above, by directly or indirectly: making use of the means or instruments of transportation or communication in interstate commerce or of the mails to sell BFMA Notes through the use or medium of any prospectus or otherwise; carrying or causing to be carried through the mails or in interstate commerce, by the means or instruments of transportation, the BFMA Notes for the purpose of sale or for delivery after sale; or making use of the means or instruments of transportation or communication in interstate commerce or of the mails to offer to sell or offer to buy through the use or medium of any prospectus or otherwise the BFMA Notes without filing a registration statement as to such notes.

L. As a result of the conduct described in paragraphs II.A. through J. above, Irwin willfully violated and BFMA violated Section 17(a) of the Securities Act, in the offer or sale of the BFMA Notes and the BFMA Limited Partnerships, by use of the means or instruments of transportation or communication in interstate commerce or by use of the mails, by directly or indirectly: employing devices, schemes or artifices to defraud; obtaining money or property by means of untrue statements of material fact or omissions 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; or engaging in transactions, practices or courses of business which operated as a fraud or deceit upon purchasers.

M. As a result of the conduct described in paragraphs II.A. through J. above, Irwin willfully violated and BFMA violated Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, in connection with the purchase or sale of the BFMA Notes and BFMA Limited Partnerships, by use of the means or instrumentality of interstate commerce or of the mails, or of any facility of any national securities exchange, by directly or indirectly: employing devices, schemes or artifices to defraud; making untrue statements of material fact or omitting 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; or engaging in acts, practices or courses of business which operated as a fraud or deceit.

N. Irwin willfully violated Section 15(a)(1) of the Exchange Act by making use of the mails or the means or instrumentalities of interstate commerce to effect transactions in, or to induce or attempt to induce the purchase or sale of the BFMA Notes and the BFMA Limited Partnerships, without registering with the Commission as a broker-dealer, as described in paragraphs II.A. through J. above.

O. Irwin willfully violated Section 15(c)(1) of the Exchange Act and Rule 15c1-2 thereunder by making use of the mails or the means or instrumentalities of interstate commerce to effect the transaction in, or to induce or attempt to induce the purchase or sale of, the BFMA Notes and BFMA Limited Partnerships, by means of manipulative, deceptive, or other fraudulent devices or contrivances, as described in paragraphs II.A. through J. above.

III.

In view of the foregoing: (A) the Commission deems it appropriate and in the public interest to impose the sanctions that are set forth in the Offer submitted by Irwin, and (B) the Commission deems it appropriate to impose the sanctions that are set forth in the Offer submitted by BFMA.

Accordingly, IT IS HEREBY ORDERED that:

A. Pursuant to Section 8A of the Securities Act and Section 21C of the Exchange Act: i) Irwin cease and desist from committing or causing any violation and any future violation of Sections 5(a), 5(c) and 17(a) of the Securities Act, Sections 10(b), 15(a)(1) and 15(c)(1) of the Exchange Act and Rules 10b-5 and 15c1-2 thereunder, and ii) BFMA cease and desist from committing or causing any violations and any future violations of Sections 5(a), 5(c) and 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder.

B. Irwin be, and hereby is, barred from associating with any broker, dealer or investment adviser with the right to reapply for association with the appropriate self-regulatory organization, or if there is none, to the Commission, after two years from the date of the Order.

C. Pursuant to Section 21B of the Exchange Act and Section 203(i) of the Advisers Act, Irwin shall pay a civil penalty in the amount of $50,000 plus post-judgment interest in the amount of $1,625.25 to the United States Treasury. The penalty and interest shall be paid as follows: $12,760.04 within 30 days of the entry of this Order, $13,085.09 within 120 days of the entry of the Order, $13,020.08 within 240 days of the entry of the Order, and $12,760.04 within 360 days of the entry of the Order. Irwin shall make each payment as follows: (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, Alexandria, VA 22312-0003; and (d) submitted under a cover letter that identifies Irwin as the respondent in these proceedings, the file number of these proceedings, a copy of which cover letter and money order or check shall be sent to Mary E. Keefe, Regional Director, Midwest Regional Office, Securities and Exchange Commission, 500 W. Madison, Suite 1400, Chicago, IL 60661.

By the Commission.

Jonathan G. Katz
Secretary