UNITED STATES OF AMERICA
In the Matter of
Terrance Michael O'Donohue
ORDER INSTITUTING PUBLIC PROCEEDINGS PURSUANT TO SECTION 15(b)(6) OF THE SECURITIES EXCHANGE ACT OF 1934 AND SECTION 203(f) OF THE INVESTMENT ADVISERS ACT OF 1940, MAKING FINDINGS AND IMPOSING REMEDIAL SANCTIONS
The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest that a public administrative proceeding be instituted pursuant to Section 15(b)(6) of the Securities Exchange Act of 1934 ("Exchange Act") and Section 203(f) of the Investment Advisers Act of 1940 ("Advisers Act") against Terrance Michael O'Donohue ("O'Donohue").
In anticipation of the institution of these administrative proceedings, O'Donohue has submitted an Offer of Settlement ("Offer"), 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 in which the Commission is a party, and without admitting or denying the Commission's findings set forth herein, except as to the jurisdiction of the Commission over him and over the subject matter of these proceedings and the matter described in Section III, Paragraphs C and G, below, which he admits, O'Donohue consents to the entry of this Order Instituting Proceedings Pursuant to Section 15(b)(6) of the Exchange Act and Section 203(f) of the Advisers Act, Making Findings and Imposing Remedial Sanctions ("Order").
Accordingly, IT IS HEREBY ORDERED THAT proceedings pursuant to Sections 15(b)(6) of the Exchange Act and Section 203(f) of the Advisers Act be, and hereby are, instituted.
On the basis of this Order and the Offer of Settlement of O'Donohue, the Commission makes the following findings:
A. From 1987 until 1997, O'Donohue was employed as a registered representative with various broker-dealer firms.
B. From at least June 1995 until November 2000, O'Donohue operated as an unregistered investment adviser.
C. On July 20, 2001, O'Donohue pled guilty to three counts of mail fraud in violation of Title 18 United States Code, Sections 1341 and 1342 before the United States District Court for the Northern District of Georgia, in United States v. Terrance Michael O'Donohue, Crim. Information No. 1:01-CR-477. On February 1, 2002, a judgment in the criminal case was entered against O'Donohue. He was sentenced to a prison term of 48 months followed by three years of supervised release and ordered to make restitution in the amount of $2,468,912.41.
D. The counts of the criminal information to which O'Donohue pled guilty alleged, inter alia, that O'Donohue defrauded investors and obtained money and property by means of materially false and misleading statements, that he used the United States mails to send false account statements, and that he caused commercial interstate carriers to deliver investors' checks to him.
E. On June 17, 2002, the Commission filed a civil action entitled Securities and Exchange Commission v. Terrance Michael O'Donohue et. al, Civil Action Number 1:02-CV-1663, in the United States District Court for the Northern District of Georgia (the "civil action"). The Commission's complaint alleged that O'Donohue violated Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 ("Securities Act"), Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, and Sections 206(1) and 206(2) of the Advisers Act.
F. The Commission's complaint alleged that, in connection with the sale of the limited partnership interests, O'Donohue misused and misappropriated investor funds, falsely stated to investors that their funds were invested, sent out false account statements indicating that investors funds were fully invested and earning returns, and otherwise engaged in a variety of conduct which operated as a fraud and deceit on investors. The complaint also alleged that O'Donohue sold unregistered securities.
G. On June 20, 2002, a final judgment in the civil action was entered against O'Donohue by consent, permanently enjoining him, directly or indirectly, from future violations of Sections 5(a), 5(c), and 17(a) of the Securities Act, Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, and Sections 206(1) and 206(2) of the Advisers Act.
Based upon the foregoing, the Commission deems it appropriate and in the public interest to accept O'Donohue's Offer of Settlement, and accordingly,
IT IS HEREBY ORDERED that, effective immediately, O'Donohue is barred from association with any broker, dealer or investment adviser.
By the Commission.
Jonathan G. Katz
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