INVESTMENT ADVISERS ACT OF 1940
Release No. 1880 / June 15, 2000

SECURITIES EXCHANGE ACT OF 1934
Release No. 42945 / June 15, 2000

ADMINISTRATIVE PROCEEDING
File No. 3-10233

In the Matter of

Owen-Joseph Asset Management Corp. and William O. Foster

ORDER INSTITUTING
PROCEEDINGS PURSUANT TO
SECTIONS 203(e), 203(f) AND 203(k)
OF THE INVESTMENT ADVISERS ACT OF 1940 AND SECTIONS 15(b)
AND 19(h) OF THE SECURITIES
EXCHANGE ACT OF 1934,
MAKING FINDINGS AND
IMPOSING REMEDIAL SANCTIONS
AND A CEASE-AND-DESIST ORDER

I.

The United States Securities and Exchange Commission (the "Commission") deems it appropriate in the public interest and for the protection of investors that administrative and cease-and-desist proceedings be instituted pursuant to Sections 203(e) and 203(k) of the Investment Advisers Act of 1940 (the "Advisers Act") against Owen-Joseph Asset Management Corp. ("OJAM") and pursuant to Sections 203(f) and 203(k) of the Advisers Act and Sections 15(b) and 19(h) of the Securities Exchange Act of 1934 (the "Exchange Act") against William O. Foster ("Foster") (collectively "Respondents").

II.

In anticipation of the institution of these proceedings, Respondents have submitted Offers of Settlement ("Offers") that 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 findings, except those findings pertaining to the jurisdiction of the Commission over them and the subject matter of these proceedings, Respondents consent to the entry of the findings and the imposition of the remedial sanctions and cease-and-desist order as set forth herein.

Accordingly, IT IS ORDERED that proceedings pursuant to Sections 203(e), 203(f) and 203(k) of the Advisers Act and Sections 15(b) and 19(h) of the Exchange Act be, and hereby are, instituted.

III.

On the basis of this Order Instituting Proceedings, and the Offers submitted by Respondents, the Commission finds that:

RESPONDENTS

A. OJAM has been registered with the Commission as an investment adviser pursuant to Section 203(c) of the Advisers Act since September 21, 1991. OJAM is an Arizona corporation with headquarters in San Diego, California. OJAM serves as an investment adviser to certain managed private accounts for clients, including pension and profit-sharing plans, trusts, corporations and individuals.

B. Owen Joseph Securities, Inc. ("OJS") is a California corporation which has been registered with the Commission under Section 15(b) of the Exchange Act as a broker-dealer since January 27, 1995.

C. Foster, a resident of California, has been a registered representative associated with several broker-dealers since 1978. Foster has been the chief executive officer of OJAM since its inception in September 1991 and the chief executive officer of OJS since March 1995. Foster directed the business and affairs of OJAM, including its brokerage policy and the selection of broker-dealers which would execute transactions for OJAM's privately managed accounts.

FACTS

D. From mid-1995 through October 1996, at Foster's direction, a certain OJAM client was continually charged more than eight cents per share for its transactions even though Foster had agreed in writing to charge six to eight cents per share for trades. OJAM voluntarily reimbursed this client for the excessive commissions.

E. In an amended Form ADV filed with the Commission in August 1996, OJAM stated that client transactions through OJS would be executed at a "maximum commission of $0.20/share." In an amended Form ADV filed with the Commission in March 1997, OJAM also stated that "[o]rders are normally subject to a minimum $40.00 ticket charge."From 9/96 through 8/99, several advisory clients were charged commissions in excess of $0.20 per share. After March 1997, some clients were charged commissions ranging from $0.22 per share to as much as $0.40 per share. In light of the disclosure that client transactions would be executed at a "maximum commission of $0.20/share," the statements in OJAM's Forms ADV were false and misleading. As a result of these practices, advisory clients were charged excessive commissions totaling $40,068.

F. In a marketing brochure disseminated in 1995, OJAM, at Foster's direction, stated that it managed assets of over $500 million and had 800 actively managed accounts. This statement was materially false because at the time the statement was made, OJAM managed approximately $93.4 million in assets and had approximately 400 actively managed accounts.

VIOLATIONS OF SECTIONS 206(1) AND 206(2) OF THE ADVISERS ACT

G. Sections 206(1) and 206(2) of the Advisers Act prohibit an investment adviser from employing any device, scheme, or artifice to defraud any client or prospective client and from engaging in any transaction, practice, or course of business which operates as a fraud or deceit upon any client or prospective client.

H. OJAM willfully violated and Foster willfully aided and abetted and caused OJAM's violations of Sections 206(1) and 206(2) of the Advisers Act by: (1) falsely representing to a client that its securities transactions would be executed at no more than eight cents per share; and (2) by falsely stating in OJAM's 1996 amended Form ADV and 1997 amended Form ADV that clients would be charged a maximum of twenty cents per share for transactions.

VIOLATIONS OF SECTION 206(4) OF THE ADVISERS ACT AND RULE 206(4)-1(a)(5) THEREUNDER

I. Section 206(4) of the Advisers Act and Rule 206(4)-1(a)(5) thereunder make it unlawful for any investment adviser, by use of the mails or any means or instrumentality of interstate commerce, directly or indirectly, to publish, circulate, or distribute any advertisement which contains any untrue statement of a material fact, or which is otherwise false or misleading.

J. OJAM willfully violated and Foster willfully aided and abetted and caused OJAM's violations of Sections 206(4) of the Advisers Act and Rule 206(4)-1(a)(5) thereunder by overstating in an advertisement the amount of money OJAM managed for investment advisory clients and the number of its advisory clients. These are material facts that would have been important to advisory clients and prospective clients.

VIOLATIONS OF SECTION 207 OF THE ADVISERS ACT

K. Section 207 of the Advisers Act makes it unlawful for any person willfully to make any untrue statement of a material fact in any registration application or report filed with the Commission under Sections 203 or 204 of the Advisers Act, or willfully to omit to state in any such application or report any material fact which is required to be stated therein. 1

L. OJAM and Foster willfully violated Section 207 of the Advisers Act by falsely stating in an August 1996 amendment to Form ADV and a March 1997 amendment to Form ADV that clients would be charged a maximum of twenty cents per share for transactions.

IV.

In view of the foregoing, the Commission deems it appropriate in the public interest and for the protection of investors to accept the Offers submitted by Respondents and to impose the sanctions specified therein.

Accordingly, IT IS ORDERED:

A. Pursuant to Section 203(e) of the Advisers Act, that OJAM be censured;

B. Pursuant to Section 203(k) of the Advisers Act, that OJAM cease and desist from committing or causing any violation and any future violation of Sections 206(1), 206(2), 206(4) and 207 of the Advisers Act and Rule 206(4)-1(a)(5) thereunder;

C. Pursuant to Section 203(j) of the Advisers Act, that OJAM shall, within thirty (30) days of the entry of this Order, pay disgorgement and prejudgment interest in the total amount of $43,000 to the United States Treasury. The disgorgement payment shall be: (1) made by United States postal money order, certified check, bank cashier's check or bank money order; (2) made payable to the Securities and Exchange Commission; (3) hand-delivered or mailed to the Comptroller, Securities and Exchange Commission, Operations Center, 6432 General Green Way, Stop 0-3, Alexandria, VA 22312; and (4) submitted under cover letter that identifies OJAM as a respondent in these proceedings, and the file number of these proceedings, a copy of which cover letter and money order or check shall be sent to Daniel F. Shea, Regional Director, Securities and Exchange Commission, Central Regional Office, 1801 California Street, Suite 4800, Denver, Colorado 80202;

D. The disgorgement and prejudgment interest paid shall be held by the Comptroller, to be utilized for payment to persons eligible to receive such funds pursuant to a plan of distribution, which shall be submitted by the Division of Enforcement within sixty (60) days from the date of the payment. In the event that all or any portion of these funds remain after adjudication of any claims and disbursements of any funds, the remainder shall be disbursed to the United States Treasury. In no event shall any portion of these funds be returned to OJAM or its agents, successors, or assigns;

IT IS FURTHER ORDERED:

E. Pursuant to Section 203(f) of the Advisers Act, that Foster be, and hereby is, suspended from association with any investment adviser for a period of 3 months, effective on the second Monday following the entry of this Order. Foster shall provide to the Commission, within thirty (30) days after the end of the 3 month suspension period described above, an affidavit that he has complied fully with the sanctions described in paragraph E.;

F. Pursuant to Sections 15(b) and 19(h) of the Exchange Act, that Foster be, and hereby is, suspended from association with any broker-dealer for a period of 6 months, effective on the second Monday following the entry of this Order. Foster shall provide to the Commission, within thirty (30) days after the end of the 6 month suspension period described above, an affidavit that he has complied fully with the sanctions described in paragraph F.;

G. Pursuant to Section 203(k) of the Advisers Act, that Foster cease and desist from committing or causing any violation and any future violation of Section 207 of the Advisers Act and from causing any violation and any future violation of Sections 206(1), 206(2) and 206(4) of the Advisers Act and Rule 206(4)-1(a)(5) thereunder;

H. Pursuant to Section 203(i) of the Advisers Act, that Foster, as the president of OJAM, shall, within thirty (30) days of the entry of this Order, pay a civil money penalty in the amount of $25,000 to the United States Treasury. Such payment shall be: (1) made by United States postal money order, certified check, bank cashier's check or bank money order; (2) made payable to the Securities and Exchange Commission; (3) hand-delivered or mailed to the Comptroller, Securities and Exchange Commission, Operations Center, 6432 General Green Way, Stop 0-3, Alexandria, VA 22312; and (4) submitted under cover letter that identifies Foster as a respondent in these proceedings, and the file number of these

proceedings, a copy of which cover letter and money order or check shall be sent to Daniel F. Shea, Regional Director, Securities and Exchange Commission, Central Regional Office, 1801 California Street, Suite 4800, Denver, Colorado 80202.

By the Commission.

Jonathan G. Katz
Secretary


FOOTNOTE

1
Section 204 of the Advisers Act and Rule 204-1 thereunder require periodic filing and amendment of Forms ADV by investment advisers. Pursuant to Rule 204-1(d), a Form ADV or an amendment thereto is a "report" within the meaning of Section 207.