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U.S. Securities and Exchange Commission

UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION

Securities Exchange Act of 1934
Release No. 41956 / September 30, 1999

Administrative Proceeding
File No. 3-10061

______________________________
:
In the Matter of : ORDER INSTITUTING PUBLIC
: ADMINISTRATIVE PROCEEDINGS
Frank Grillo, : PURSUANT TO SECTIONS 15(b)(6)
: AND 19(h) OF THE SECURITIES
Respondent. : EXCHANGE ACT OF 1934,
: MAKING FINDINGS, AND IMPOSING
: REMEDIAL SANCTIONS
______________________________:

I.

The Securities and Exchange Commission ("Commission") deems it appropriate in the public interest and for the protection of investors that a public administrative proceeding pursuant to Sections 15(b)(6) and 19(h) of the Securities Exchange Act of 1934 ("Exchange Act") be, and hereby is, instituted against respondent Frank Grillo ("Grillo").

II.

In anticipation of the institution of this proceeding, Grillo has submitted an Offer of Settlement ("Offer"), which the Commission has determined is in the public interest 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 set forth herein, except as to the fact of his criminal conviction set forth in paragraph III.C. below, and the jurisdiction of the Commission over him and over the matters set forth in this Order Instituting Public Administrative Proceedings

Pursuant To Sections 15(b)(6) And 19(h) Of The Securities Exchange Act Of 1934, Making Findings, And Imposing Remedial Sanctions ("Order"), which he admits, Grillo consents to the entry of the findings and the imposition of the sanctions set forth in this Order.

III.

On the basis of this Order and Grillo's Offer, the Commission finds that:

A. Grillo was born on June 8, 1963 and is a resident of New York, New York.

B. Grillo was associated as a registered representative with Corporate Securities Group, Inc. ("Corporate"), a registered broker-dealer, from approximately May to June 1988. Then he became a principal of Allegiance Securities, Inc. ("Allegiance"), a registered broker-dealer which is now defunct, from July 1988 to September 1989.

C. On August 17, 1994, in the United States District Court for the District of New Jersey, Grillo pled guilty to one felony count under 18 U.S.C. § 371 for conspiracy to commit securities fraud. On December 20, 1996, the Court sentenced Grillo to three years probation, six months of home confinement, 200 hours of community service, and ordered him to pay a fine of $25,000 and a special assessment of $50.00. The Court entered the judgment of conviction on December 24, 1996. United States v. Frank Grillo, Cr. 94-429(01) (D.N.J.) (JWB).

D. The Information underlying the criminal conviction charged, among other things, that:

(1) From approximately May 1988 through September 1989, while he was associated with Corporate and Allegiance, Grillo participated in a scheme to manipulate the prices of certain securities through various fraudulent trading practices. The scheme was designed to artificially raise the prices of the securities of Vista Capital Corp. ("Vista") and Castleton Investors Corp. ("Castleton") by generating demand and employing fraudulent trading practices. In furtherance of the conspiracy, Grillo:

(a) agreed to assist his co-conspirators in the manipulation of Vista and Castleton securities; and

(b) bought, sold, and held Vista and Castleton securities at the direction of his co-conspirators rather than in accordance with legitimate market forces.

(2) For his participation in the manipulation scheme, Grillo received, at various times, free securities, securities below the manipulated market price, guaranteed profits, cash, participation in the future offerings of other manipulated securities, and assistance in other manipulation schemes being controlled by his co-conspirators.

E. Vista was at all relevant times a reporting company, whose stock was registered with the Commission pursuant to Section 15(d) of the Exchange Act. Vista's common stock was traded over the counter and listed in the Pink Sheets. The common stock of Vista was not registered or approved for registration upon notice of issuance on a national securities exchange, nor was such security authorized, or approved for authorization upon notice of issuance, for quotation on an automated quotation system sponsored by a registered securities association, nor was such security issued by a registered investment company. At all times relevant to this matter, the price of Vista common stock was less than five dollars per share. At no time relevant to this matter did Vista have net tangible assets in excess of $2,000,000 nor average revenue of $6,000,000 for a three year period.

F. Castleton was at all relevant times a reporting company, whose stock was registered with the Commission pursuant to Section 15(d) of the Exchange Act. Castleton's common stock was traded over the counter and listed in the Pink Sheets. The common stock of Castleton was not registered or approved for registration upon notice of issuance on a national securities exchange, nor was such security authorized, or approved for authorization upon notice of issuance, for quotation on an automated quotation system sponsored by a registered securities association, nor was such security issued by a registered investment company. At all times relevant to this matter, the price of Castleton common stock was less than five dollars per share. At no time relevant to this matter did Castleton have net tangible assets in excess of $2,000,000 nor average revenue of $6,000,000 for a three year period.

IV.

In view of the foregoing, the Commission deems it appropriate in the public interest and for the protection of investors to accept Grillo's Offer and to impose the sanctions which are set forth in the Offer.

Accordingly, IT IS HEREBY ORDERED that:

Effective immediately, Grillo be, and hereby is, barred from association with any broker or dealer.

By the Commission.

Jonathan G. Katz
Secretary

http://www.sec.gov/litigation/admin/34-41956.htm


Modified:10/01/1999