UNITED STATES OF AMERICA Before the SECURITIES AND EXCHANGE COMMISSION SECURITIES ACT OF 1933 Release No. 7336 / September 25, 1996 SECURITIES EXCHANGE ACT OF 1934 Release No. 37723 / September 25, 1996 ADMINISTRATIVE PROCEEDING File No. 3-9098 컴컴컴컴컴컴컴컴컴컴컴컴컴컴커 � ORDER INSTITUTING In the Matter of � PUBLIC PROCEEDINGS, � MAKING FINDINGS AND JEFFREY L. DUNN � IMPOSING REMEDIAL Respondent. � SANCTIONS � 컴컴컴컴컴컴컴컴컴컴컴컴컴컴켸 I. The Securities and Exchange Commission (Commission) deems it appropriate and in the public interest that public administrative proceedings be instituted pursuant to Sections 15(b), 19(h) and 21C of the Securities Exchange Act of 1934 (Exchange Act) and Section 8A of the Securities Act of 1933 (Securities Act) against Jeffrey L. Dunn (Dunn). In anticipation of the institution of these administrative proceedings, Dunn 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, except as to jurisdiction and the facts set forth in Paragraphs II (A) and (E) below, which he admits, Dunn consents to the entry of this Order, its findings and the imposition of sanctions as set forth below. ACCORDINGLY, IT IS ORDERED THAT proceedings pursuant to Sections 15(b), 19(h) and 21 (C) of the Exchange Act and 8A of the Securities Act be, and they hereby are, instituted. II. On the basis of this Order and the Offer submitted by Dunn, the Commission finds that: A. From approximately November 1991 until his termination on April 6, 1995, Dunn was a registered representative with PRUCO ==========================================START OF PAGE 2====== Securities Corporation (PRUCO), a subsidiary of Prudential Insurance Company of America (PICA), and a broker-dealer registered with the Commission pursuant to Section 15(b) of the Exchange Act. Dunn was also employed by PICA as a Captive Agent from November 1991 until his termination on April 6, 1995. B. From approximately May 1993 until April 1995, Dunn used his position as a registered representative with PRUCO to convince four investors, who were his insurance clients, to redeem an aggregate amount of approximately $165,000 from their existing PICA money market and mutual fund accounts and to provide such funds to him. C. Dunn told investors that he would place their funds into investment opportunities, through PRUCO, that would provide the clients with higher rates of return than their existing PICA accounts. Further, he told investors that their principal would be guaranteed throughout the duration of the investment. In fact, Dunn misappropriated the money given to him by the investors. The funds were not invested in any investment, nor were they guaranteed by any entity. D. Dunn concealed his fraudulent activity from his clients by misrepresenting the success of the fictitious investments. As part of his fraudulent scheme, Dunn made periodic cash payments to them totaling approximately $42,000. He falsely represented to his clients that the cash payments they received from him were based on interest from investment activity. Eventually, Dunn stopped making payments of any kind to them. He misappropriated the remaining $122,300 of his clients' funds for his own personal use. E. On November 30, 1995, Dunn pled guilty to one count of mail fraud [18 U.S.C.  1341] arising out of the conduct described in paragraphs II(A) through II(D) above. On March 15, 1996, the United States District Court for the Northern District of Illinois sentenced Dunn to fifteen months in prison, three years of supervision, and ordered him to pay $122,300 as restitution. U.S. v. Jeffrey L. Dunn, 95 CR 0703. F. As a result of the activity described in paragraphs II(A) through II(E) above, Dunn willfully violated Section 17(a) of the Securities Act in that Dunn, in the offer or sale of securities, by the use of the means or instruments of transportation or communication in interstate commerce or by the use of the mails, directly or indirectly: employed devices, schemes or artifices to defraud; obtained money or property by means of untrue statements of material facts or omitted to state material facts necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading; or engaged in transactions, practices or courses of ==========================================START OF PAGE 3====== business which operated as a fraud or deceit upon purchasers or prospective purchasers of such securities. G. As a result of the activity described in paragraphs II(A) through II(E) above, Dunn willfully violated Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder in that Dunn, in connection with the purchase or sale of securities, by the use of the means or instrumentalities of interstate commerce, or of the mails, directly or indirectly: employed devices, schemes or artifices to defraud; made untrue statements of material facts or omitted to state material facts necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading; or engaged in acts, practices or courses of business which operated as a fraud or deceit in connection with the purchase or sale of securities. III. In view of the foregoing, it is in the public interest to impose sanctions specified in the Offer of Settlement. Accordingly, IT IS ORDERED: 1. That Dunn cease and desist from committing or causing any violations or any future violations of Section 10(b) of the Exchange Act or Rule 10b-5 thereunder or committing or causing any violations or future violations of Section 17(a) of the Securities Act; and 2. That Dunn be barred from association with any broker, dealer, municipal securities dealer, investment company or investment adviser. By the Commission. Jonathan G. Katz Secretary