United States Securities and Exchange Commission Securities Exchange Act of 1934 Release No. 40483 / September 25, 1998 Investment Advisers Act of 1940 Release No. 1759 / September 25, 1998 Administrative Proceeding File No. 3-9728 IN THE MATTER OF RANDY DEPOISTER The Securities and Exchange Commission (Commission) announced the entry of an Order Instituting Public Administrative Proceedings (Order) pursuant to Sections 15(b) and 19(h) of the Securities Exchange Act of 1934 (Exchange Act) and Section 203(f) of the Investment Advisers Act of 1940 (Advisers Act) against Randy Depoister (Depoister). In the Order, the Division of Enforcement (Division) alleges that Depoister, between 1982 and 1993, was a registered representative associated with several broker-dealers registered with the Commission and, since 1984, has been the principal, sole shareholder and sole officer of Financial Resources Advisory, Inc., an investment adviser registered with the Commission. Specifically, the Division alleges that, on February 2, 1998, in SEC v. Weyman B. Sinyard, et al., 94C-5856, the United States District Court for the Northern District of Illinois granted the Commission's motion for summary judgment against Depoister and entered an order of permanent injunction against him prohibiting him from violating the securities registration and antifraud provisions of the federal securities laws, namely Sections 5(a), 5(c) and 17(a) of the Securities Act, Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder and Sections 206(1) and 206(2) of the Advisers Act. The Commission's Amended Complaint in that action alleged and the Court found that, between October 1989 and June 1991, Depoister, at times through FRA, offered and sold an investment in Jarco, Inc. (Jarco) to prospective investors, and as a result thereof, Depoister raised $461,750 from eighteen investors. The Court further found that, in the offer and sale of the Jarco investment to the public, Depoister knowingly misrepresented and omitted to state material facts regarding, among other things, the returns, duration, risks, safety and true nature of the investment, Depoister's own investment in Jarco and Depoister's conversion of $90,200 of the monies he raised from investors for his own use. Additionally, the Division alleges that, on May 12, 1995, after a criminal trial in U.S. v. Depoister, 94CR- 50026 (N.D. Ill., Western Div.), Depoister was convicted of 17 criminal counts consisting of mail fraud, wire fraud, money laundering and causing the interstate transportation of property obtained by fraud. On August 11, 1995, the United States District Court for the Northern District of Illinois sentenced Depoister to 48 months in prison without parole to be followed by 36 months of supervised release. Depoister was also ordered to make restitution in the amount of $441,000 to eighteen investors. In 1997, the Seventh Circuit Court of Appeals affirmed the district court's conviction of Depoister. U.S. v. Depoister, 116 F.3d 292 (7th Cir. 1997). The criminal action was based upon the same course of conduct as the Commission's injunctive action. A hearing will be scheduled to determine if the Division's allegations are true and, if so, what remedial action, if any, is appropriate with regard to Depoister.