INITIAL DECISION RELEASE NO. 103 ADMINISTRATIVE PROCEEDING FILE NO. 3-8899 UNITED STATES OF AMERICA Before the SECURITIES AND EXCHANGE COMMISSION Washington, D.C. _______________________________ In the Matter of : : INITIAL DECISION JOHN FRANCIS D'ACQUISTO : December 13, 1996 : : _______________________________ APPEARANCES: James A. Howell and Marianne Wisner for the Division of Enforcement, Securities and Exchange Commission Thomas F. Goodman for Respondent D'Acquisto BEFORE: Lillian A. McEwen, Administrative Law Judge PROCEDURAL HISTORY The United States Securities and Exchange Commission ("Commission") instituted these proceedings pursuant to Sections 203(e) and 203(f) of the Investment Advisers Act of 1940 ("Advisers Act"). The Order Instituting Proceedings ("OIP") was filed on December 18, 1995. THE HEARING On August 6, 1996, a public hearing commenced before me in Los Angeles, California. It ended on the same day. The hearing record consists of the testimony of two witnesses and several exhibits. I admitted into evidence eight joint exhibits; one exhibit from the Division of Enforcement ("Division"); and three exhibits from the Respondent.-[1]- The Respondent was not present at the hearing. His appearance was waived by his attorney. (Tr. 3-4.) ---------FOOTNOTES---------- -[1]- Citations to the joint exhibits will be noted as "Joint Ex. __," and to the Respondent's exhibits as "Resp. Ex. __." Citations to the Transcript pages of the hearing will be noted as "Tr. __." ==========================================START OF PAGE 2====== ISSUES On June 6, 1996, the Division filed a Motion to Amend Order Instituting Proceedings. The Respondent stated that he did not intend to oppose the Motion and has not filed an opposition to it. In my August 1, 1996, Prehearing Order, I stated that I would rule on the Division's Motion after the hearing, pursuant to Rule 200(d)(2) of the Commission's Rules of Practice. Comment (d) to the Rule states in part: The Commission has stated that amendment of orders instituting proceeding should be freely granted, subject only to the consideration that other parties should not be surprised, nor their rights prejudiced. Carl L. Shipley, 45 S.E.C. 589, 595 (1974). Where amendments to an order instituting proceedings are intended to correct an error, to conform the order to the evidence or to take into account subsequent developments which should be considered in disposing of the proceeding, and the amendments are within the scope of the original order, either a hearing officer or the Commission has authority to amend the order. See, e.g., Don A. Long, Admin. Proc. Rulings Release No. 233 (Mar. 31, 1980), 52 SEC Docket 497 (Aug. 18, 1992) (hearing officer's grant of motion to conform pleading to evidence adduced at hearing). The Division wishes to amend the OIP to include the following three allegations: (1) from June, 20, 1984 through the present, John Francis D'Acquisto has been associated with D'Acquisto and Associates, Inc., a registered investment Adviser; (2) that both John Francis D'Acquisto and D'Acquisto and Associates, Inc. registered as an Investment Adviser; and (3) that the Franchise Tax Board for the State of California suspended D'Acquisto and Associates, Inc. as a corporation prior to June 20, 1984, and it has never been revived. (Division's Motion at 2.) I find that the amendment is intended to correct an error or to conform the Order to the evidence and that the new matters are within the scope of the original OIP. Thus, the Division's Motion to Amend Order Instituting Proceedings is hereby GRANTED and the OIP is hereby amended to include the three allegations described above. The next issue before me is whether on September 20, 1995, the United States District Court for the Southern District of California handed down a Partial Summary Judgment Order that ==========================================START OF PAGE 3====== permanently enjoined Respondent D'Acquisto from violations of Section 17(a) of the Securities Act of 1933 ("Securities Act"), and Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act"), and Rule 10b-5 thereunder, in SEC v. D'Acquisto Financial Group, Inc., Doubleday Trust, John F. D'Acquisto and Thomas F. Goodman, Civil Action No. CV-95-1105H (AJB) (S.D. Cal.) If I find that the Respondent was enjoined as described, the second issue is whether and how he should be sanctioned. After the hearing, the Division filed its Proposed Findings of Fact and Conclusions of Law and a Reply Brief. The Respondent filed a Post-Hearing Brief. FINDINGS OF FACT The findings and conclusions herein are based on the entire record. I applied preponderance of the evidence as the applicable standard of proof for the Division's case. The Respondent is 44 years old. He graduated from high school in 1970, and he attended business school for one year and took "extension courses" in finance and economics for two years. From 1973 to 1979, he worked at the Bank of America in San Francisco, and from 1979 to 1982, he was a loan agent at the Sun Savings and Loan Association in San Diego. In 1983, he became an investment adviser with D'Acquisto and Associates, Inc., (Joint Ex. 6 at 17), where he also had been president and chairman since November 1979. (Joint Ex. 6 at 14.) D'Acquisto and Associates, Inc., had its "corporate powers, rights and privileges" suspended on August 2, 1982, by the State of California. (Joint Ex. 3.) By December 1986, the Respondent had filed for individual, Chapter 13 bankruptcy. (Joint Ex. 6 at 17.) D'Acquisto, Goodman and Associates, Inc., ("DGA"), with the Respondent as president (Joint Ex. 4 at 29), applied for registration as an investment adviser on May 14, 1984. (Joint Ex. 4 at 1, 10.) In the category of "the types of clients for which the investment adviser generally provides investment advice," the Respondent listed "individuals, and specified classes of individuals, banks, investment companies and pension and profit-sharing plans and limited partnerships." Furthermore, in the categories of methods of analysis, sources of information, and investment strategies, the Respondent stated: DGA, Inc. will use many many methods of security analysis, fundamental analysis, technical analysis, cyclical analysis and charting will all be used in order to tailor an investment strategy that would benefit each of our clients. Through these types of analysis DGA, Inc. can distribute their client's interest into the most beneficial way. ==========================================START OF PAGE 4====== . . . . DGA, Inc. will use many sources of information. The sources used will be as follows: Standard and Poors Research, Moody's Research, Daily Graphs from William O'Neil and Co., which follow each major stock exchange. Miller and Schroeder Research, Wall Street Journal, Fortune, Forbes, Barrons, Money, and Dunn & Brad Street. . . . . DGA's investment strategies will usually be long term positions. DGA implements long term conservative strategies but DGA will also implement for the more speculative clients, a strategy that would include margin transactions, short sales, and covered option writing. DGA will very rarely ever use writing uncovered options. (Joint Ex. 4 at 11.) The registration of "D'Acquisto and Associates, Inc.," was granted on June 20, 1984. (Joint Ex. 4 at 30.) The application (Joint Ex. 4) was the subject of an amendment application by the Respondent on June 7, 1984, to change the name of the business to D'Acquisto and Associates, Inc. (Joint Ex. 5 at 2.) There is no indication in the record, however, that the amendment was approved. On the contrary, the Commission noted deficiencies in the application. (Joint Ex. 5 at 22.) On October 20, 1986, the Commission received the application of John Francis D'Acquisto for investment adviser registration doing business as D'Acquisto and Associates, Inc. (Joint Ex. 6 at 2.) Nothing in the record indicates that the Commission took any action on the application. In January 1990 and October 1991 the Commission published Notices of Intention to Cancel Registrations of Certain Investment Advisers, including the Respondent. (Resp. Ex. 1; Resp. Ex. 2.) John Francis D'Acquisto is included in the appendix list of the Notices. The 1991 Notice states: The Commission has been sending all registrants a booklet of registration materials annually since 1987. Each booklet contains copies of Forms, ADV, ADV-S, ADV- E and ADV-W. [FN2] These forms, when properly filed, are used to update the Commission's records. Since the 1987 mailing, the Commission has had correspondence for each of the registrants listed in the Appendix returned as "undeliverable" (addressee unknown, forwarding order ==========================================START OF PAGE 5====== expired, or no longer at this address) by U.S. Postal Service. The Commission's records indicate that these registrants have not filed amendments to their registration, reflecting their current business and/or mailing addresses, as required by Rule 204-1(b). The Commission's records also indicate that many of these registrants have not made annual filings of Form ADV-S, as required by Rule 204-1(c). Accordingly, the Division of Investment Management believes that reasonable grounds exist for a finding that these registrants are no longer in existence or are no longer engaged in business as investment advisers. . . . . Form ADV-W is used to voluntarily withdraw from registration as an investment adviser. (Resp. Ex. 1 at 1.) During 1990 and 1991, Michael Paul Levitt was the branch chief of the Investment Adviser and Investment Company Examination Program in the Los Angeles region for the Commission. (Tr. 63-64.) Regarding Respondent's Exhibits One and Two, Notices of Intention to Cancel Registration of Certain Investment Advisers, each year the Commission prepares a cancellation list composed of registered advisers whose registration packages have been returned "because of bad addresses." In 1990 and 1991, Levitt asked the Commission to remove D'Acquisto's name from the cancellation list because of "outstanding complaints" about him. (Tr. 65-66, 81.) As a result, D'Acquisto's registration was not cancelled in 1991 and he was still registered on the date of the hearing. (Tr. 66.) On May 20, 1993, the Respondent wrote a letter to the Commission in reference to: a debt that he owed to a client; his bankruptcy case; the closing of D'Acquisto and Associates, Inc., in 1986; and his assertion that, "I would also like to make a formal request to withdraw myself from the investment advisers license." (Joint Ex. 8 at 2.) On or about May 20, 1993, Levitt sent D'Acquisto a letter asking him to contact him and to send him a letter stating he had paid back his previous investors. The Division of Enforcement had declined to open a case against the Respondent. (Resp. Ex. 3; Tr. 67-75.) The Respondent never filed the proper request for cancellation of his registration. (Tr. 68-69.) On April 6, 1995, the United States District Court of the Northern District of Illinois, in Sheridan Asset Management, Inc. ==========================================START OF PAGE 6====== v. Doubleday Trust, et al., issued an order that incorporates "a resolution of part of the claims pending before the court" (Joint Ex. 1 at 4) and that is signed by D'Acquisto. (Joint Ex. 1 at 6.) The case is in effect a suit filed by the two victims, Sheridan Asset Management, Inc. ("Sheridan"), and Alliance Holdings Limited ("Alliance"), against D'Acquisto, his various corporations, and other defendants. The settlement agreement described in the order disposes of a $1,000,000 "security and indemnity fund" among the interested parties. It also vacates the court's injunctive orders as of April 3, 1995. (Joint Ex. 1 at 12.) D'Acquisto and others signed the consent order. (Joint Ex. 1 at 6.) The statement of stipulated facts that accompanies the order describes the misrepresentations and the fraudulent scheme whereby D'Acquisto and others obtained $2,000,000 from Alliance in March 1994 (Joint Ex. 1 at 7-12), and $4,800,000 from Dr. Herbert Geisselmann later in 1994. (Joint Ex. 1 at 13-15.) D'Acquisto and others promised to invest funds in securities, and then converted the funds from the two investors to their own use and engaged in unauthorized trades which resulted in losses from July through September 1994. (Joint Ex. 1 at 13-17.) D'Acquisto and others also used the funds to purchase, among other things: 1) a contingent interest in a Mexican minor league baseball team in a league which does not operate; 2) vacant land in Mexico; 3) . . . three racehorses; and (4) personal and business items and services. (Joint Ex. 1 at 17; Joint Ex. 7 at 4-6.) When the investors demanded the return of their funds, in September and October 1994, D'Acquisto and others refused to return them. (Joint Ex. 1 at 17-18.) On September 20, 1995, an Order Granting Plaintiff's Motion for Partial Summary Judgment was issued by the United States District Court of the Southern District of California in SEC v. D'Acquisto Financial Group, Inc., et al., Civil Action No. CV- 1105H (AJB) (S.D. Cal.). The Order cites the Sheridan case (Joint Ex. 1) and notes that its facts are substantially similar. (Joint Ex. 2 at 2.) I adopt the findings of the court as summarized below. The court found that the defendants were dealing in securities, not commodities trading (Joint Ex. 2 at 11), and that they were barred by collateral estoppel from relitigating the Sheridan findings (Joint Ex. 2 at 9). The court granted the request for a permanent injunction (Joint Ex. 2 at 12-13) and ordered disgorgement. (Joint Ex. 2 at 13.) The permanent injunction resulted from the court's explicit findings that the Respondent and others had violated Securities Act Section 17(a) and Exchange Act Section 10(b): ==========================================START OF PAGE 7====== Finally, the stipulated facts demonstrate that defendants used the mails with scienter to forward their investment scheme and to make material false statements in connection with their scheme. In offering and selling the program to Alliance and Geisselmann, defendants falsely alleged that they were sophisticated money managers with a great deal of experience and client contacts. Defendants also repeatedly represented to Alliance and Geisselmann that their funds were earning substantial and significant profits, that their funds were secure, that the investment was low risk, and that the investment and earnings would be returned to the investors in a timely fashion. As such the court finds defendants committed securities fraud in violation of both Section 10(b) and Section 17(a) and grants plaintiff's motion for partial summary judgement. . . . . Based on the set of stipulated facts, the court finds that the SEC has made a showing which satisfies the standard for issuance of a permanent injunction. Defendants have defrauded several groups of investors and according to declarations submitted by the SEC, defendants had previously been investigated by the Commission. In testimony given before SEC staff, both individual defendants contended that the SEC had no authority over their activities. Given defendants' repeated violations and disregard for the law, the court finds that defendants represent a risk to the public and grants plaintiff's motion for a permanent injunction. (Joint Ex. 2 at 12.) CONCLUSIONS OF LAW Contentions of the Parties I. The Division The Division contends that the district court established that D'Acquisto was acting as an investment adviser during the perpetration of the fraudulent scheme that violated the securities laws. His solicitation of Alliance resulted in its $2,000,000 investment and in its referral of Geisselmann to him. Geisselmann's investment of $4,800,000 followed shortly. (Division's Post Hearing Brief at 8-10.) Efforts of the two investors to recoup missing funds were unsuccessful. (Id. at 11- 13.) D'Acquisto misappropriated $6,500,000 of client funds. (Id. at 14.) The injunction by the district court gives the ==========================================START OF PAGE 8====== Commission the authority to sanction D'Acquisto, and his registration status is not determinative of whether he was acting as an investment adviser or was a person associated with an investment adviser. (Id. at 16-18.) Finally, the Division argues that D'Acquisto is still a registered investment adviser as a result of his application and amendment to it, and the publication of his registration status. (Id. at 18-19.) He has not successfully withdrawn his application (Id. at 20.), and the Commission never cancelled the registration. (Id. at 21.) The Division contends that D'Acquisto is also associated with an investment adviser as a result of his position as president of D'Acquisto and Associates, Inc.; as control person of the same firm; and as a result of his ownership of over 75% of the firm. (Id. at 21.) D'Acquisto's failure to state in the application that California had suspended the corporate status of D'Acquisto and Associates, Inc., was also unlawful. The position of the Division is that D'Acquisto is barred by collateral estoppel from challenging the district court's decision. (Id. at 27.) It requests an order revoking his investment adviser's registration and barring D'Acquisto from associating with any investment adviser. (Id. at 28.) II. The Respondent The Respondent contends that he made an error and never intended to register separately as an individual and as a corporation. (Respondent's Post-Hearing Brief at 1-2.) He contends that he was not aware of the 1982 suspension of the corporation, and that he had informed the Commission in 1993 of the fact that D'Acquisto and Associates, Inc., "was no longer in business and that he requested to withdraw as a licensed investment advisor." (Id. at 2.) It was in his capacities as trustee of Doubleday Trust and as president of D'Acquisto Financial Group, Inc., a California corporation, that the Respondent came to be accused of misconduct. He argues that as a trustee he could not violate the Advisers Act. He also contends that the Commission's failure to comply with its "mandatory duty" to cancel the registration of D'Acquisto and Associates, Inc., from 1991 to 1993 should relieve him of the obligation to "follow the law" of the Advisers Act. Thus he maintains that the Commission has no jurisdiction over him. (Id. at 6-7.) Evaluation of the Evidence D'Acquisto is properly before the Commission as a registered investment adviser, one who is associated with an investment adviser, or an investment adviser in fact. He is subject to ==========================================START OF PAGE 9====== sanctions if the Commission finds after notice and opportunity for a hearing that he is an investment adviser, or associated with an investment adviser and: (3) is permanently . . . enjoined by order . . . of any court of competent jurisdiction . . . from engaging in or continuing any conduct or practice . . . in connection with the purchase or sale of any security. (4) has willfully violated any provision of the Securities Act of 1933, the Securities Exchange Act of 1934, . . . this title, . . . or the rules or regulations under any such statutes . . . Advisers Act Section 203(e). I conclude that the Respondent was permanently enjoined from further violations of the securities laws by the United States District Court for the Southern District of California, which is a court of "competent jurisdiction." I also conclude that the investors Alliance and Geisselmann were persuaded to part with large sums of money by the Respondent's false promises of significant profits through investments in securities. (Joint Ex. 1; Joint Ex. 2.) The Respondent was therefore an investment adviser as defined in the applicable statute. Advisers Act Section 202(a)(11) defines an investment adviser as "any person who, for compensation, engages in the business of advising others, either directly or through publications or writings, as to the value of securities or as to the advisability of investing in, purchasing, or selling securities, or who, for compensation and as part of a regular business, issues or promulgates analyses or reports concerning securities . . . ." This section excludes from the definition of investment adviser certain persons who would otherwise come within the plain meaning of the definition, but who, for various policy reasons, are not subject to the provisions of the Advisers Act. A determination as to whether a person is an investment adviser will depend on whether the person: (i) provides advice, or issues reports or analyses, regarding securities; (ii) is in the business of providing such services; and (iii) provides such services for compensation. Applicability of the Investment Advisers Act, Advisers Act Release No. 1092, 39 SEC Docket 653, 657-62 (October 8, 1987). In Alexander V. Stein, 59 SEC Docket 1493 (June 8, 1995), the Commission agreed with an administrative law judge and found that, based on Stein's recent conviction for numerous securities, mail, and wire fraud charges, he should be barred from the investment advisory business. Id. at 1502. Stein withdrew the investment adviser registration of one of the firms through which he conducted his fraudulent scheme before the time of his misconduct. Id. at 1496-97 n.9. Stein, therefore, disputed the ==========================================START OF PAGE 10====== Commission's authority to institute a proceeding pursuant to Section 203(f) of the Advisers Act on the basis that he was neither a registered investment adviser nor associated with a registered investment adviser during the time of his misconduct. Id. at 1496. The Commission explained that its "authority to proceed under Section 203(f) . . . does not rest on whether or not an entity or individual has registered with this Commission. It does rest on whether or not an entity or individual in fact acted as an investment adviser." Id. at 1497 (footnote omitted). The Commission applied Adviser Act Section 202(a)(11), which defines investment adviser, and Adviser Act Section 202(a)(17), which defines person associated with an investment adviser, and analyzed the respondent's actions. Id. at 1497-98 & n.11; see also, Applicability of the Investment Advisers Act, 39 SEC Docket 653 (clarifying elements of the definition of investment adviser). The Commission concluded that it had jurisdiction over the proceeding based on Stein's conviction and the nature of his activities. Alexander V. Stein, 59 SEC Docket at 1498-99. Stein had held himself out as an investment adviser when he recommended, in the course of his business activities, that clients invest their funds with him. Id. at 1498. In his sales pitch, Stein told clients how he would invest their funds and how much money he could make for them. Id. at 1498 n.12. Stein received an economic benefit for his services because he, in effect, paid himself by diverting a portion of his clients' funds for his personal use. Id. at 1498 & n.13. I conclude that the Respondent was a registered investment adviser at the time of the hearing. Although his corporation was suspended at the time of his application in 1984 (Joint Ex. 3; Joint Ex. 4 at 1, 10), his application was approved by the Commission on June 20, 1984. (Joint Ex. 4 at 30.) The Commission never cancelled his registration. (Resp. Ex. 1; Resp. Ex. 2; Tr. 65-66.) Furthermore, the Respondent never filed the proper papers for cancellation of his registration. (Tr. 68-69.) The Respondent has cited to no authority that required the Commission to cancel his registration. Most importantly, even if the Respondent had successfully withdrawn his registration, he "in fact acted as an investment adviser," Alexander V. Stein, 59 SEC Docket at 1497, when he persuaded the two clients to invest their funds with him; misrepresented his scheme for disposing of the funds; and paid himself a handsome fee by his diversion of client monies. The Respondent's argument that he was a mere trustee is without merit. Neither federal trial court found that contention to be true. The injunction that is at the heart of the instant case was imposed by consent and is based on stipulated facts. ==========================================START OF PAGE 11====== However, the securities laws make no exception for a consent injunction. [T]he action required in the public interest as the result of an injunction may be inferred from all the circumstances surrounding the injunctive action. Moreover, that precedent suggests that, in practical effect, the allegations in the complaint in an action settled by consent may, in a subsequent proceeding before us, be given considerable weight for purposes of assessing the public interest. Defendants in injunctive actions should be aware of this consequence. Charles P. Elliott, 50 S.E.C. 1273, 1277 (1992), aff'd, 36 F.3d 86 (11th Cir. 1994); see also Richard J. Puccio, 59 SEC Docket 2433 (July 10, 1995) (consent injunction in initial decision); David M. Haber, 59 SEC Docket 59 (Apr. 5, 1995) (consent injunction unaccompanied by findings of fact); Peter C. Calcutta, 55 SEC Docket 2500 (Dec. 23, 1993) (consent injunction in initial decision); Michael Keith Howard, 56 SEC Docket 0576 (Feb. 25, 1994) (initial decision). A "consent injunction in which the allegations are denied, no less than one issued after trial upon a determination of the allegations, may furnish the sole basis for remedial action under Section 15(b) of the Exchange Act if such action is in the public interest." Cortlandt Investing Corp., 44 S.E.C. 45, 53 (1969). Documents on which the court based its action serve to place the injunction and its terms in perspective and are properly included in the record. Kimball Securities Inc., 39 S.E.C. 921, 923-924 (1960). Thus, I have properly placed great weight on the earlier findings made by two separate federal trial courts. THE PUBLIC INTEREST At the time of the misconduct involved in the injunctive action, Respondent D'Acquisto was an investment adviser, and the injunction falls within one of the categories covered by the applicable statute. Hence, the remaining issue is the sanction that is appropriate in the public interest. In this light, I have taken into account the following factors: the egregiousness of the defendant's actions, the isolated or recurrent nature of the infraction, the degree of scienter involved, the sincerity of the defendant's assurances against future violations, the defendant's recognition of the wrongful nature of his conduct, and the likelihood that the defendant's occupation will present opportunities for future violations. ==========================================START OF PAGE 12====== Steadman v. SEC, 603 F.2d 1126, 1140 (5th Cir. 1979), aff'd on other grounds, 450 U.S. 91 (1981). The severity of a sanction depends on the facts of each case and the value of the sanction in preventing a recurrence. Berko v. SEC, 316 F.2d 137, 141 (2d Cir. 1963); Richard C. Spangler, Inc., 46 S.E.C. 238, 254 n.67 (1976); Leo Glassman, 46 S.E.C. 209, 211-12 (1975). Respondent D'Acquisto's actions were particularly egregious because they involved the theft of millions of dollars from investors. The fraud occurred over a number of years, involved more than one investor, and did not result from an isolated event but rather from a pattern of coordinated acts. Scienter has been described as "a mental state embracing intent to deceive, manipulate, or defraud." Ernst & Ernst v. Hochfelder, 425 U.S. 185, 193 n.12 (1976). Scienter is established by a showing that the defendant acted intentionally or with severe recklessness. Raymond L. Dirks, 47 S.E.C. 434, 447 n.47 (1981), rev'd on other grounds, 463 U.S. 646 (1983); see Broad v. Rockwell Int'l Corp., 642 F.2d 929 (5th Cir. 1981); see also Warren v. Reserve Fund, Inc., 728 F.2d 741, 745 (5th Cir. 1984); Hackbart v. Holmes, 675 F.2d 1114, 1118 (10th Cir. 1982); Sundstrand Corp. v. Sun Chemical Corp., 553 F.2d 1033, 1039 (7th Cir. 1977). Respondent D'Acquisto's intent to deceive and defraud investors is demonstrated by: his ten-year employment in the securities industry; the complexity of the schemes that were generated to deceive the investors; the financial interest that Respondent D'Acquisto maintained in the ventures; and the recurring failures to repay the victims. The high degree of scienter established in the instant case is therefore obvious. The Respondent demonstrates no assurances against future violations and he recognizes no wrongful conduct for which he takes responsibility. Finally, because his most productive adult professional years have probably been spent in the securities industry, he is likely to continue to work in the industry. Thus, he is likely to have fresh opportunities for future violations of the securities laws. It is therefore in the public interest that the Respondent's registration as an investment adviser be revoked and that he be barred permanently from association with any investment adviser. ORDER Based on the findings and conclusions set forth above, I ORDER, pursuant to Sections 203(e) and 203(f) of the Investment Advisers Act of 1940, that John Francis D'Acquisto be, and hereby is, barred from association with any investment adviser and that his registration as an investment adviser be and hereby is revoked. ==========================================START OF PAGE 13====== This Order shall become effective in accordance with and subject to the provisions of Rule 360 of the Commission's Rules of Practice, 17 C.F.R. Section 201.360 (1996). Pursuant to that rule, a petition for review of this initial decision may be filed within twenty-one days after service of the decision. It shall become the final decision of the Commission as to each party who has not filed a petition for review pursuant to Rule 360(d)(1) within twenty-one days after service of the initial decision upon him, unless the Commission, pursuant to Rule 360(b)(1), determines on its own initiative to review this initial decision as to any party. If a party timely files a petition for review, or the Commission acts to review as to a party, the initial decision shall not become final as to that party. ______________________________ Lillian A. McEwen Administrative Law Judge