U.S. Securities & Exchange Commission
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U.S. Securities and Exchange Commission

Securities and Exchange Commission
Washington, DC

Securities Act of 1933
Release No. 8148 / November 14, 2002

Securities Exchange Act of 1934
Release No. 46838 / November 14, 2002

Investment Advisers Act of 1940
Release No. 2081 / November 14, 2002

Administrative Proceeding
File No. 3-10936

Proceedings Instituted Against Jeffrey R. Patterson and Terrance Turman

The Securities and Exchange Commission (the "Commission") announced today that it instituted administrative and cease-and-desist proceedings against Jeffrey R. Patterson and Terrance Turman ("respondents"), both Pennsylvania residents. In the Order Instituting Proceedings ("Order"), the Division of Enforcement ("Division") alleges that the respondents sold securities in a fraudulent scheme orchestrated by Robert L. Bentley ("Bentley") of Paoli, Pennsylvania. Bentley held himself out to his customers, most of whom were financial institutions, as a broker of bank-issued, federally-insured certificates of deposit. Bentley in fact bought CDs with customer funds. However, Bentley's customers did not acquire a direct ownership interest in these CDs. Instead, beginning in 1996, Bentley issued to the customers separate instruments, which were securities in the form of notes or investment contracts. These securities promised to pay interest rates and had maturity dates that varied from those terms in the underlying CDs. In many instances, Bentley bought long-term CDs and issued shorter-term securities to his customers. The Division alleges that, consequently, buyers of Bentley's securities depended upon Bentley, rather than the bank that issued the underlying CD, for the return of their principal.

The Division alleges that the respondents materially misled their clients about the nature of the investment they were selling to their customers. At every step in the transaction they led their customers to believe that Bentley was a CD broker and that the customer would be buying a bank-issued, federally insured CD. Furthermore, the Division alleges that the respondents misled their customers to believe that their transactions were being made through a registered broker-dealer, when in fact their transactions were not made through a registered or regulated entity. The Division alleges that the respondents thereby willfully violated, and committed or caused violations of, Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder. The Division further alleges that the respondents willfully violated the broker-dealer registration provisions contained in Section 15(a) of the Exchange Act.

In October 2001, the Commission brought an injunctive action against Bentley and his entities through which he carried out the scheme, Entrust Group and Bentley Financial Services, Inc. See Litigation Releases No. 17201 (October 23, 2001), 17206 (October 25, 2001), and 17228 (November 13, 2001). Bentley's business is now being liquidated by a court-ordered receiver.

A hearing will be scheduled before an administrative law judge to determine whether the allegations contained in the Order are true, to provide the respondents an opportunity to dispute these allegations, and to determine what sanctions, if any, are appropriate and in the public interest.



Modified: 11/27/2002