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U.S. Securities and Exchange Commission

UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION

INVESTMENT ADVISERS ACT OF 1940
Release No. 2320 / November 4, 2004

Admin. Proc. File No. 3-11729


In the Matter of

JOHN D. BARRY, THOMAS P. DANIELS, JOHN M. IRWIN, and MARK P. MISZKIEWICZ,

Respondents.



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ORDER INSTITUTING ADMINISTRATIVE PROCEEDINGS PURSUANT TO SECTION 203(f) OF THE INVESTMENT ADVISERS ACT OF 1940, MAKING FINDINGS, AND IMPOSING REMEDIAL SANCTIONS

I.

The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest that public administrative proceedings be, and hereby are, instituted pursuant to Section 203(f) of the Investment Advisers Act of 1940 ("Advisers Act") against John D. Barry ("Barry"), Thomas P. Daniels ("Daniels"), John M. Irwin ("Irwin"), and Mark P. Miszkiewicz ("Miszkiewicz") (collectively, "Respondents").

II.

In anticipation of the institution of these proceedings, Respondents have each submitted an Offer of Settlement ("Offers") 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 to which the Commission is a party, and without admitting or denying the findings herein, except as to the Commission's jurisdiction over them and the subject matter of these proceedings, and the findings contained in Section III.2 below, which are admitted, Respondents consent to the entry of this Order Instituting Administrative Proceedings Pursuant to Section 203(f) of the Investment Advisers Act of 1940, Making Findings, and Imposing Remedial Sanctions (" Order"), as set forth below.

III.

On the basis of this Order and Respondents' Offers, the Commission finds that:

1. Barry was the President and part-owner of Beacon Hill Asset Management LLC ("Beacon Hill"), Chairman of its Management Board, and was responsible for marketing, sales, client relationships and overall management of the firm. From at least the beginning of 2002 through October 2002, Barry was associated with Beacon Hill, which served as the investment advisor for certain hedge funds, including Beacon Hill Master Ltd. Barry, 53 years old, is a resident of New Jersey.

2. Daniels was the Chief Investment Officer and part-owner of Beacon Hill, and directed the firm's overall investment, securities valuations, and risk management. From at least the beginning of 2002 through October 2002, Daniels was associated with Beacon Hill. Daniels, 46 years old, is a resident of New Jersey.

3. Irwin was a part-owner of Beacon Hill and was the Senior Portfolio Manager in charge of the firm's credit sensitive mortgage portfolio, sharing portfolio management responsibilities and all trading decisions with respect to the funds' investments and security valuations with the Chief Investment Officer. From at least the beginning of 2002 through October 2002, Irwin was associated with Beacon Hill. Irwin, 47 years old, is a resident of New Jersey.

4. Miszkiewicz was the Chief Financial Officer and part-owner of Beacon Hill, and was responsible for Beacon Hill's financial, accounting and administrative operations. From at least the beginning of 2002 through October 2002, Miszkiewicz was associated with Beacon Hill. Miszkiewicz, 40 years old, is a resident of New Jersey.

5. On October 28, 2004, final judgments were entered by consent against each of the Respondents, permanently enjoining each of them from future violations of Sections 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), 206(2), and 206(3) of the Advisers Act, in the civil action entitled Securities and Exchange Commission v. Beacon Hill Asset Management, et al., Civil Action Number 02-8855(LAK), in the United States District Court for the Southern District of New York.

6. The Commission's Amended Complaint alleged that from at least the beginning of 2002 through October 2002, the defendants in the civil action, including the Respondents, made material misrepresentations to investors about the valuation methodology Beacon Hill used for calculating Net Asset Values ("NAVs"); the hedging and trading strategy for its purportedly "market neutral" hedge funds; and the value and performance of these funds. In addition, the Amended Complaint alleged that the defendants manipulated the valuations to allow steady and positive growth to be reported, and to hide losses. The Amended Complaint also alleged that as the funds suffered losses during the summer of 2002, the defendants made an increasing and ultimately unsuccessful bet on interest rates rising in an attempt to cover Beacon Hill's hidden losses. The Amended Complaint further alleged that the defendants traded between the hedge funds and other accounts Beacon Hill managed at prices that defrauded the hedge funds to try to hide losses in the managed accounts. The Amended Complaint alleged that when the defendants realized that the losses would be discovered, three of them liquidated an account where they were the only investors by effecting trades with the hedge fund without disclosure to investors. The Amended Complaint further alleged that on or about October 7, 2002, when Beacon Hill's prime broker had challenged the valuation of the hedge funds and Beacon Hill was forced to admit it had sustained losses, the defendants misrepresented that the magnitude of the actual losses was only approximately 25 percent in an attempt to save Beacon Hill's operations and make the losses appear to be the result of market conditions. Finally, the Amended Complaint alleged that on October 17, 2002, the defendants finally announced the full extent of investor losses, admitting that, as of September 30, the NAVs of Beacon Hill's hedge funds had declined 54 percent from previously reported August 31, 2002 levels.

IV.

In view of the foregoing, the Commission deems it appropriate and in the public interest to impose the sanctions agreed to in Respondent Barry, Daniels, Irwin and Miszkiewicz Offers.

Accordingly, it is hereby ORDERED:

Pursuant to Section 203(f) of the Advisers Act, Respondents Barry, Daniels, and Irwin be, and hereby are barred from association with any investment adviser;

Pursuant to Section 203(f) of the Advisers Act, Respondent Miszkiewicz be, and hereby is barred from association with any investment adviser, with the right to reapply for association after 4 years to the appropriate self-regulatory organization, or if there is none, to the Commission;

Any reapplication for association by the Respondents will be subject to the applicable laws and regulations governing the reentry process, and reentry may be conditioned upon a number of factors, including, but not limited to, the satisfaction of any or all of the following: (a) any disgorgement ordered against the Respondents, whether or not the Commission has fully or partially waived payment of such disgorgement; (b) any arbitration award related to the conduct that served as the basis for the Commission order; (c) any self-regulatory organization arbitration award to a customer, whether or not related to the conduct that served as the basis for the

Commission order; and (d) any restitution order by a self-regulatory organization, whether or not related to the conduct that served as the basis for the Commission order.

By the Commission.

Jonathan G. Katz
Secretary


http://www.sec.gov/litigation/admin/ia-2320.htm


Modified: 11/05/2004