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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. 43393 / September 29, 2000

ADMINISTRATIVE PROCEEDING
FILE NO. 3-10337
In the Matter of

First Springfield Securities, Inc.,
Donald E. Radle and Michael S. Dwyer

Respondents.

Order Instituting Proceedings, Making Findings and Imposing Remedial Sanctions Pursuant to Sections 15(b) and 19(h) of the Securities Exchange Act of 1934

I.

The Securities and Exchange Commission ("Commission") deems it appropriate in the public interest and for the protection of investors that public administrative proceedings be instituted against First Springfield Securities, Inc. ("FSSI"), Donald E. Radle ("Radle"), and Michael S. Dwyer ("Dwyer") pursuant to Sections 15(b) and 19(h) of the Securities Exchange Act of 1934 ("Exchange Act").

II.

In anticipation of the institution of these proceedings, FSSI, Radle and Dwyer have each submitted Offers of Settlement ("Offers"), which the Commission has determined to accept. 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 the Commission's findings contained herein, except the Commission's findings set forth in Paragraphs III.A. through III.D., which are admitted, FSSI, Radle and Dwyer consent to the entry of this Order Instituting Proceedings, Making Findings and Imposing Remedial Sanctions pursuant to Sections 15(b) and 19(h) of the Exchange Act ("Order").

Accordingly, IT IS HEREBY ORDERED that proceedings pursuant to Sections 15(b) and 19(h) of the Exchange Act be and hereby are instituted.

III.

On the basis of this Order and FSSI, Radle and Dwyer's Offers, the Commission finds that:

A. From at least November 1997 through April 1998, FSSI was registered as a broker-dealer with the Commission pursuant to the Exchange Act.

B. From at least November 1997 through April 1998, Radle was president and a registered representative at FSSI.

C. From at least November 1997 through April 1998, Dwyer was a registered representative at FSSI.

D. On September 27, 2000, in the case of SEC v. First Springfield Securities, Inc., et al., (Case No. 99-3356-CV), the Honorable Russell G. Clark, United States District Judge for the Western District of Missouri, entered Final Orders and Judgments of Permanent Injunction and Other Equitable Relief ("Final Judgments") against Defendants FSSI, Radle and Dwyer, pursuant to their consent and without FSSI, Radle and Dwyer admitting or denying the allegations in the Commission's Complaint. Among other things, these Final Judgments enjoined FSSI, Radle and Dwyer from violating Section 17(a) of the Securities Act of 1933 ("Securities Act"), Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder. The Final Judgments also enjoined FSSI from violating Section 15(c) of the Exchange Act and Rule 15c1-2 promulgated thereunder. The Complaint was based on the conduct described in Paragraphs III.E. through III.G. below.

E. The Complaint alleged that FSSI and Radle defrauded five investors by offering and selling investment agreements that guaranteed a high rate of return without any risk ("Investment Agreements"). From at least November 1997 through April 1998, the Complaint alleged, FSSI and Radle raised four million dollars from five investors by offering and selling the Investment Agreements to investors. The Complaint alleged that FSSI and Radle misrepresented the use of investor proceeds and the safety of the Investment Agreements, as well as the rate of return on the Investment Agreements. In its Complaint, the Commission alleged that the Investment Agreements represented to investors that their funds would be held in a designated account for their benefit and that investor funds would not be released for any purpose until FSSI had received collateral, in the form of either U.S. Treasury Bonds or a "Bank Guaranteed Payment Directive," which fully secured the investor's principal and return. Contrary to this representation, the Complaint alleged that neither FSSI nor Radle ever obtained or held the collateral promised in the Investment Agreements; instead, FSSI and Radle directed investor funds to accounts neither FSSI nor Radle controlled. The Complaint also alleged that the Investment Agreements misrepresented the rate of return on the investments. The Complaint alleged that investors were promised annual returns ranging from 50% to 720% without FSSI or Radle having any legitimate basis for believing that such returns could be obtained for investors. The Complaint alleged that Radle, as president of FSSI, believed such returns would be gained after investor funds were pooled with other investor funds in a very profitable program involving the trading of bank instruments, but neither FSSI nor Radle obtained critical information regarding the program, including the names of the traders, the names of the banks, the names of the contact persons at the banks, and the ultimate location of investor funds. Finally, the Complaint alleged that Radle, as president of FSSI, knew that the representations stated above were false at the time that he made them because Radle controlled FSSI's operations at that time.

F. With respect to Dwyer, the Complaint alleged that around February and March of 1998, Dwyer attempted to obtain investor funds from two elderly sisters under false pretenses. The Commission alleged that the elderly sisters lived at a nursing home and maintained brokerage accounts at FSSI through their charitable remainder trusts. The Complaint alleged that Dwyer met with the sisters at their nursing home on two occasions where he asked each sister to sign separate pieces of paper, claiming that he needed the signed papers to prove to FSSI that he had visited them. The Complaint alleged that, on information and belief, these pieces of paper were the last pages of two separate Investment Agreements, one for $250,000 and the other for $50,000. The transaction was stopped, however, before the sisters actually invested money in the Investment Agreements. The Complaint also alleged that Dwyer knowingly deceived the sisters by not informing them that they were signing the last pages of two Investment Agreements with FSSI.

G. In the alternative, the Complaint alleged that even if Dwyer actually explained the investment program to the sisters and the sisters knowingly and voluntarily agreed to buy the Investment Agreements, Dwyer made false and misleading statements about the safety of the Investment Agreements, the use of investor proceeds and the rates of return. In its Complaint, the Commission alleged that the Investment Agreements the elderly sisters entered into were substantially identical to the Investment Agreements FSSI entered into with the five investors discussed in Paragraph III.E. above. The Complaint alleged that, like all the other Investment Agreements, these Investment Agreements promised an extraordinarily high rate of return without any risk. The Complaint alleged that, despite this "red flag," Dwyer did not obtain critical information about the program, such as how FSSI, through Radle, would obtain the collateral on behalf of the sisters, where it would be held, and who would hold it. In addition, the Complaint alleged that Dwyer did not attempt to gather information on how the rates of return stated in the Investment Agreements were generated such as the names of the supposed traders that traded with the banks, the names of the banks, the names of the contact persons at the banks, and the ultimate location of investor funds from which profits would be generated. Finally, the Complaint alleged that Dwyer knowingly or recklessly made these misrepresentations to the elderly sisters.

H. From at least November 1997 through April 1998, FSSI willfully violated Section 17(a) of the Securities Act in that, directly or indirectly, in the offer or sale of certain securities in the form of the Investment Agreements, by the use of means or instruments of transportation or communication in interstate commerce or of the mails, FSSI: employed devices, schemes or artifices to defraud; obtained 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 light of the circumstances under which they were made, not misleading; or, engaged in transactions, practices or courses of business which would or did operate as a fraud or deceit. As part of this conduct, FSSI engaged in the acts and practices described in Paragraph III.E. above.

I. From at least November 1997 through April 1998, FSSI willfully violated Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder in that, directly or indirectly, in connection with the purchase or sale of certain securities in the form of the Investment Agreements, by the use of any means or instruments of transportation or communication in interstate commerce or of the mails, FSSI: employed devices, schemes or artifices to defraud; obtained money or property by means of untrue statements of material fact or omitted to state material facts necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; or engaged in acts, practices or courses of business which would or did operate as a fraud or deceit. As part of this conduct, FSSI engaged in the acts and practices described in Paragraph III.E. above.

J. From at least November 1997 through April 1998, FSSI willfully violated Section 15(c) of the Exchange Act and Rule 15c1-2 promulgated thereunder in that FSSI effectuated transactions in or induced or attempted to induce the purchase or sale of certain securities in the form of the Investment Agreements by the use of any means or instruments of transportation or communication in interstate commerce or of the mails, by means of manipulative, deceptive or other fraudulent devices or contrivances, including acts, practices or courses of business which would or did operate as a fraud or deceit; or made untrue statements of material fact or omitted to state material facts necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading, which statements or omissions were made with knowledge or reasonable grounds to believe that they were untrue or misleading. As part of this conduct, FSSI engaged in the activities described in Paragraph III.E. above.

K. From at least November 1997 through April 1998, Radle willfully violated Section 17(a) of the Securities Act in that, directly or indirectly, in the offer or sale of certain securities in the form of the Investment Agreements, by the use of means or instruments of transportation or communication in interstate commerce or of the mails, he: employed devices, schemes or artifices to defraud; obtained 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 light of the circumstances under which they were made, not misleading; or, engaged in transactions, practices or courses of business which would or did operate as a fraud or deceit. As part of this conduct, Radle engaged in the acts and practices described in Paragraph III.E. above.

L. From at least November 1997 through April 1998, Radle willfully violated Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder in that, directly or indirectly, in connection with the purchase or sale of certain securities in the form of the Investment Agreements, by the use of any means or instruments of transportation or communication in interstate commerce or of the mails, he: employed devices, schemes or artifices to defraud; obtained money or property by means of untrue statements of material fact or omitted to state material facts necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; or engaged in acts, practices or courses of business which would or did operate as a fraud or deceit. As part of this conduct, Radle engaged in the acts and practices described in Paragraph III.E. above.

M. From at least March 1998 through April 1998, Dwyer willfully violated Section 17(a) of the Securities Act in that, directly or indirectly, in the offer or sale of certain securities in the form of the Investment Agreements, by the use of means or instruments of transportation or communication in interstate commerce or of the mails, he: employed devices, schemes or artifices to defraud; obtained 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 light of the circumstances under which they were made, not misleading; or, engaged in transactions, practices or courses of business which would or did operate as a fraud or deceit. As part of this conduct, Dwyer engaged in the acts and practices described in Paragraphs III.F. and III.G. above.

N. From at least March 1998 through April 1998, Dwyer willfully violated Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder in that, directly or indirectly, in connection with the purchase or sale of certain securities in the form of the Investment Agreements, by the use of any means or instruments of transportation or communication in interstate commerce or of the mails, he: employed devices, schemes or artifices to defraud; made untrue statements of material fact or omitted to state material facts necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; or engaged in acts, practices or courses of business which would or did operate as a fraud or deceit. As part of this conduct, Dwyer engaged in the acts and practices described in Paragraphs III.F. and III.G. above.

IV.

In light of the foregoing, it is in the public interest and for the protection of investors to impose the sanctions specified in the Offers submitted by FSSI, Radle and Dwyer. Accordingly:

IT IS ORDERED that FSSI's registration with the Commission as a broker or dealer be, and hereby is, revoked.

IT IS FURTHER ORDERED that Donald E. Radle be, and hereby is, barred from association with any broker or dealer with the right to reapply for association after five years to the appropriate self-regulatory organization, or if there is none, to the Commission.

IT IS FURTHER ORDERED that Michael S. Dwyer be, and hereby is, barred from association with any broker or dealer with the right to reapply for association after one year to the appropriate self-regulatory organization, or if there is none, to the Commission.

By the Commission.

Jonathan G. Katz
Secretary

http://www.sec.gov/litigation/admin/34-43393.htm


Modified:10/03/2000