UNITED STATES OF AMERICA
SECURITIES AND EXCHANGE COMMISSION
SECURITIES EXCHANGE ACT OF 1934
Release No. 45582 / March 18, 2002
File No. 3-10510
In the Matter of
FRANK J. FASANO and
ARTHUR BRUCE BAHLAV,
ORDER MAKING FINDINGS
AND IMPOSING REMEDIAL
SANCTIONS AS TO
FRANK J. FASANO
By an order issued June 18, 2001, the Securities and Exchange Commission ("Commission") instituted a public administrative proceeding pursuant to Section 15(b)(6) of the Securities Exchange Act of 1934 ("Exchange Act") against Respondent Frank J. Fasano.
After the institution of these proceedings, Fasano submitted an Offer of Settlement ("Offer"), which the Commission has determined to accept. Solely for purposes 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 contained in this Order Making Findings and Imposing Remedial Sanctions as to Frank J. Fasano ("Order"), except that Fasano admits to the jurisdiction of the Commission over him and over the subject matter of this proceeding and admits the findings in Sections III.A, III.B, and III.C below, Fasano consents to the entry of this Order, and to the entry of the findings and the imposition of the remedial sanctions set forth below.
On the basis of this Order and Fasano's Offer, the Commission finds1:
- From 1988 to October 1997, Fasano was a majority owner of, and registered principal at, SFI Investments, Inc. ("SFI"), a now defunct broker-dealer that was registered with the Commission from 1988 until October 1997.
- On February 26, 1999, the United States District Court for the Eastern District of New York convicted Fasano of conspiracy to commit securities fraud in connection with a fraudulent scheme to obtain more than $1.5 million from SFI clients through the sale of securities in the form of unsecured promissory notes. United States v. Arthur Bruce Bahlav and Frank J. Fasano, No. 98 CR 135 (ERK).
- On December 6, 2000, the United States District Court for the Southern District of New York entered a permanent injunction against Fasano enjoining him from violating Section 17(a) of the Securities Act of 1933, and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. SEC v. Arthur Bruce Bahlav and Frank J. Fasano, 99 Civ. 11772 (SWK).
- Both the criminal action and the injunctive action were based on the following allegations. From May 1992 through June 1995, Fasano and Arthur Bruce Bahlav orchestrated a fraudulent scheme through which they defrauded 24 SFI clients of more than $1.5 million. Fasano and Bahlav induced investors to purchase unsecured promissory notes with promises of high rates of return. Many investors purchased notes with securities. Fasano and Bahlav made materially false statements, and failed to disclose material information, to investors concerning, among other things, the use and disposition of the securities that investors used to purchase the notes. Fasano and Bahlav then liquidated the investors' securities and used the proceeds to pay, among other things, personal and business expenses, and to repay earlier investors their principal and interest.
In view of the foregoing, the Commission deems it appropriate and in the public interest
to accept Fasano's Offer and impose the sanctions specified therein.
ACCORDINGLY, IT IS ORDERED that Frank J. Fasano be, and hereby is, barred from association with any broker or dealer.
By the Commission.
Jonathan G. Katz
|1|| The findings in this Order are made pursuant to Fasano's Offer and are not binding on any other person or entity in this or any other proceeding.|