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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. 2330 / November 19, 2004

Admin. Proc. File No. 3-11708


In the Matter of

BARRY J. GOODMAN,



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ORDER MAKING FINDINGS AND IMPOSING SANCTION BY DEFAULT

The Securities and Exchange Commission (Commission) initiated this proceeding on October 13, 2004, pursuant to Section 203(f) of the Investment Advisers Act of 1940 (Advisers Act). Respondent Barry J. Goodman (Goodman) was served with the Order Instituting Proceedings (OIP) on October 18, 2004. Goodman's Answer was due on November 8, 2004. See 17 C.F.R. 201.160, .220(b); OIP at 3. On November 15, 2004, the Division of Enforcement (Division) filed a motion for entry of default against Goodman for failing to answer the OIP.

As of today, Goodman has not filed an Answer. Goodman is in default for failing to answer the OIP within the time provided. See 17 C.F.R. 201.155(a), .220(f). Pursuant to Rule 155(a) of the Commission's Rules of Practice, 17 C.F.R. 201.155(a), I find the following allegations in the OIP to be true:

Goodman, age 41, resides in North Andover, Massachusetts. Goodman did business as an investment adviser under the name New England Capital Advisors, LLC (New England Capital).

New England Capital, formerly Bogey Capital, LLC, is a Massachusetts limited liability company. New England Capital is no longer in good standing because of its failure to make necessary filings with the Secretary of State's Office since 2000. At all relevant times, New England Capital was an unregistered investment adviser and Goodman was an associated person of New England Capital.

On January 29, 2001, the Commission filed a complaint against Goodman and New England Capital in the United States District Court for the District of Massachusetts, based on alleged violations of certain provisions of the federal securities laws in a civil action entitled SEC v. Goodman, Civil Action No. 01-CV-10163 (JLT). The complaint alleged that beginning in February 2000, Goodman, doing business as New England Capital, obtained at least $800,000 through two fraudulent investment schemes.

The Commission's complaint further alleged that the first scheme involved a fictitious "initial public offering pool," whereby Goodman collected $500,000 after representing to investors that he would use their funds to obtain stock in initial public offerings (IPOs) underwritten by five investment banks during a specified period. According to the complaint, Goodman claimed that he had a special relationship with each investment bank, ensuring that he would receive shares in the IPOs the bank underwrote, and that he would be able to sell the IPO shares immediately at a profit, with minimal risk. The complaint further alleged that after investors sent their funds to New England Capital, Goodman made repeated representations that the IPO pool had purchased shares in specific IPOs and sold them at an overall profit of forty percent or more.

The Commission's complaint also alleged that Goodman thereafter collected an additional $300,000 in the second scheme, in which he represented that investor funds would be used in a "special" arbitrage program buying stock in Lycos, Inc. (Lycos).

The Commission's complaint further alleged that neither Goodman nor New England Capital ever had accounts at any of the investment banks and never purchased IPO shares in any of the companies he identified. Moreover, the complaint alleged that he did not use any of the investor funds to buy Lycos stock. Instead, according to the complaint, Goodman used most of the investor funds from both schemes for his personal benefit, transferring them to his personal bank account, repaying debts owed to previous brokerage customers, and losing the rest in unsuccessful day trading.

On March 10, 2004, the court entered an injunction against Goodman, pursuant to his earlier filed consent, that permanently enjoined Goodman from violating Section 17(a) of the Securities Act of 1933 (Securities Act), Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act) and Rule 10b-5 thereunder, and Sections 206(1) and 206(2) of the Advisers Act. The court reserved until trial a decision on liability.

The court held a four-day bench trial in March 2004. On September 29, 2004, based on the evidence submitted at trial, the United States District Court for the District of Massachusetts entered an order and judgment in favor of the Commission finding that Goodman violated Section 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, and ordering Goodman to pay a civil penalty of $220,000.

Based on the foregoing, I find that it is appropriate and in the public interest to bar Goodman from association with an investment adviser.

Order

IT IS ORDERED, pursuant to Section 203(f) of the Investment Advisers Act of 1940, that Barry J. Goodman is hereby BARRED from association with an investment adviser.

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Robert G. Mahony
Administrative Law Judge


http://www.sec.gov/litigation/admin/ia-2330.htm


Modified: 11/19/2004