UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION

April 23, 2004

ADMINISTRATIVE PROCEEDING
File No. 3-11463

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 15(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Section 203(f) of the Investment Advisers Act of 1940 ("Advisers Act") against CDH & Affiliates, Inc. ("CDH") and C. David Hallman ("Hallman") (collectively "Respondents").

II.

As a result of an investigation, the Division of Enforcement alleges that:

Respondents

A. Hallman, 50 years of age, resided in Fayetteville, Georgia at the time the Commission filed its complaint on February 25, 2002. Hallman controlled CDH and signed agreements on behalf of CDH as its chairman.

B. CDH was incorporated in Georgia in 1997 and administratively dissolved by the Georgia Secretary of State in 2002. CDH may be revived by submitting an application and paying back fees to the Georgia Secretary of State.

Related Entity

C. CDH Financial Advisors, L.L.C. ("CDH Financial") was a Georgia limited liability company based in Fayetteville, Georgia that was wholly-owned by CDH and controlled by Hallman. CDH Financial (File No. 801-57348) was registered with the Commission as an investment adviser from March through July 2000. CDH Financial was also registered with the State of Georgia from March through December 2000.

Facts

D. On February 25, 2002, the Commission filed its complaint against CDH and Hallman in an action entitled Securities and Exchange Commission v. CDH & Affiliates, Inc., and C. David Hallman, Civil Action File Number 3:02-CV-17-JTC in the United States District Court for the Northern District of Georgia, Newnan Division.

E. The complaint alleged that Hallman controlled CDH and that from September 1997 through at least June 1999, Hallman and CDH engaged in the business of effecting transactions in securities and fraudulently raised more than $2.2 million in transaction-related fees from at least 27 customers, purportedly to prepare corporate bond offerings for those customers and then to sell those bonds for the customers. The complaint further alleged that in an effort to avoid detection of their scheme, until at least July 2001, Hallman and CDH continually told their victims that their bond issues would be funded and made other misrepresentations to encourage the victims to believe that funding was imminent. The complaint alleges that CDH never sold bonds for any customer and that no such high-yield investment program exists. According to the complaint, Hallman made numerous misrepresentations to his victims, including false claims that some victims' bonds had been successfully sold, that bond sales were imminent and that the proceeds of the bond sales would be invested in a high-yield investment program that would pay 30%-40% every ten days. The complaint alleged that Hallman and CDH thereby violated Sections 10(b) and 15(a) of the Exchange Act and Rule 10b-5 thereunder.

F. On October 23, 2003, the court granted the Commission's motion for summary judgment and permanently enjoined CDH and Hallman from future violations of Sections 10(b) and 15(a) of the Exchange Act and Rule 10b-5 thereunder.

G. As a result of the conduct described above, CDH and Hallman violated Sections 10(b) and 15(a) of the Exchange Act and Rule 10b-5 thereunder, which prohibit fraudulent conduct in connection with the purchase or sale of securities and prohibit CDH and Hallman from operating as brokers or dealers without registering with the Commission as brokers or dealers.

III.

1. Whether the allegations set forth in Section II hereof are true and, in connection therewith, to afford Respondents an opportunity to establish any defense to such allegations;

2. What, if any, remedial action is in the public interest pursuant to Section 15(b) of the Exchange Act; and

3. What, if any, remedial action is in the public interest pursuant to Section 203(f) of the Advisers Act.

IV.

IT IS HEREBY ORDERED, that a public hearing for the purpose of taking evidence on the questions set forth in Section III hereof be convened after service of this Order Instituting Adminstrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934 and Section 203(f) of the Investment Advisers Act of 1940 at a time and place to be fixed, and before an Administrative Law Judge to be designated by further Order as provided by Rule 200 of the Commission's Rules of Practice, 17 C.F.R. Section 201.200.

IT IS HEREBY FURTHER ORDERED that the Respondents file an answer to the allegations contained in this Order within twenty (20) days after service of this Order, as provided by Rule 220 of the Commission's Rules of Practice, 17 C.F.R. Section 201.220.

If the Respondents fail to file the directed answer or fail to appear at a hearing after being duly notified, they may be deemed in default and the proceedings may be determined against them upon consideration of this Order Instituting Adminstrative Proceedings, the allegations of which may be deemed to be true as provided by Rules 155(a), 220(f), 221(f) and 310 of the Commission's Rules of Practice, 17 C.F.R. Sections 201.155(a), 201.220(f), 201.221(f) and 201.310.

This Order shall be served upon the Respondents personally or by certified mail forthwith.

IT IS FURTHER ORDERED that the Administrative Law Judge shall issue an initial decision no later than 210 days from the date of service of this Order, pursuant to Rule 360(a)(2) of the Commission's Rules of Practice.

In the absence of an appropriate waiver, no officer or employee of the Commission engaged in the performance of investigative or prosecuting functions in this or any factually related proceedings will be permitted to participate or advise in the decision of this matter, except as witness or counsel in proceedings held pursuant to notice. Since this proceeding is not a "rule making" within the meaning of Section 511 of the Administrative Procedure Act, it is not deemed subject to the provisions of Section 553 delaying the effective date of any final Commission action.

For the Commission, by its Secretary, pursuant to delegated authority,

http://www.sec.gov/litigation/admin/34-49606-o.htm