UNITED STATES OF AMERICA
In the Matter of
John Raymond Linney Clain,
|ORDER MAKING FINDINGS
AND IMPOSING REMEDIAL SANCTIONS
In connection with the public administrative proceedings previously instituted pursuant to Section 203(f) of the Investment Advisers Act of 1940 ("Advisers Act"),1 Respondent John Raymond Linney Clain ("Clain") 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 findings contained in this Order Making Findings And Imposing Remedial Sanctions ("Order"), except as to the Commission's jurisdiction over him and the subject matter of these proceedings and the entry of the injunction referenced in paragraph II.B. herein, which he admits, Clain consents to the entry of this Order, as set forth below.
On the basis of this Order and the Offer submitted by Clain, the Commission finds that:
A. From at least January 1998 through at least October 2002, Clain was an investment adviser, and was associated with an investment adviser.
B. On March 12, 2002, an Order of Permanent Injunction And Other Relief was entered against Clain by the United States District Court for the Northern District of Georgia in the case of Securities and Exchange Commission v. Saint James Asset Management, Inc. and John Raymond Linney Clain, et al., Civil Action No. 1:02-CV-0426-RLV (N.D.Ga.), permanently enjoining him from violating Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, and Sections 206(1) and 206(2) of the Advisers Act. The Order of Permanent Injunction and Other Relief directed that Clain shall pay disgorgement, prejudgment interest thereon, and a civil penalty in amounts to be resolved upon motion of the Commission at a later date. The Order also provides that for purposes of disgorgement, prejudgment interest and the civil penalty, the allegations of the Commission's complaint shall be deemed to be true, and Clain may not, by way of defense, contend that disgorgement, prejudgment interest and the civil penalty should not be imposed.
C. The Commission's complaint alleged that between January 1998 and October 2000, Clain was an investment adviser and was associated with an investment adviser, and misappropriated approximately $965,400 from sixteen clients of Saint James Asset Management, Inc. ("Saint James"). Clain procured the funds by representing that he would use the funds to purchase securities for the clients. In reality, Clain used $110,000 to buy two cars and a diamond ring and the remaining funds to pay business and personal expenses, including monthly mortgage payments on his house. Clain concealed his conduct by giving his clients account statements, stock certificates and other documents which falsely indicated that Saint James had purchased securities on their behalf.
In view of the foregoing, the Commission deems it appropriate and in the public interest to impose the sanctions specified by Clain in his Offer.
Accordingly, IT IS HEREBY ORDERED, pursuant to Section 203(f) of the Advisers Act, that Clain is barred from association with any investment adviser.
For the Commission, by its Secretary, pursuant to delegated authority.
Jonathan G. Katz
|1||The Order Instituting Proceedings in this matter was issued on September 17, 2002.|
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