UNITED STATES OF AMERICA before the SECURITIES AND EXCHANGE COMMISSION Securities Act of 1933 Release No. 7473 / November 4, 1997 Securities Exchange Act of 1934 Release No. 39293 / November 4, 1997 Administrative Proceeding File No. 3-9321 _______________________________ : In the Matter of : : ORDER MAKING FINDINGS, IMPOSING DICKINSON & CO. and : REMEDIAL SANCTIONS AND CEASE- T. MARSHALL SWARTWOOD, : AND-DESIST ORDER : Respondents. : _______________________________: I. Dickinson & Co. ("Dickinson") and T. Marshall Swartwood ("Swartwood") have submitted Offers of Settlement for the purpose of disposing of the issues raised by this proceeding. Solely for the purposes of these proceedings and any other proceedings brought by or on behalf of the Commission or to which the Commission is a party, and prior to hearing and without admitting or denying the findings set forth herein, Swartwood and Dickinson each consent to the entry of this Order Making Findings, Imposing Remedial Sanctions and Cease-and-Desist Order ("Order"). The Commission has determined that it is appropriate and in the public interest to accept Offers of Settlement from Swartwood and Dickinson, and accordingly is issuing this Order. II. FACTS Based on the foregoing, the Commission finds that:<(1)> A. Respondents 1. T. Marshall Swartwood Swartwood is a 70 percent owner of the holding company that owns Dickinson, as well as chairman and a director of the broker-dealer. <(1)> The findings herein are made pursuant to Swartwood's and Dickinson's Offers of Settlement and are not binding on any other person or entity in this or any other proceeding. 2. Dickinson & Co. Dickinson, during the relevant time, was a broker-dealer registered with the Commission and a member of the Midwest Stock Exchange whose principal office is in Des Moines, Iowa. B. Other Relevant Individuals and Entities 1. Sheldon S. Traube Traube currently is a research analyst employed by a broker-dealer registered with the Commission. During the period from at least January 1992 until July 1992, Traube was self-employed as a research analyst. 2. Ferrofluidics Corporation Ferrofluidics Corporation ("Ferrofluidics") is a Massachusetts corporation headquartered in Nashua, New Hampshire. Ferrofluidics' stock is registered with the Commission under Section 12(g) of the Exchange Act and quoted on the NASDAQ National Market System. C. The Traube Research Report In January 1992, Ronald Moskowitz ("Moskowitz"), Ferrofluidics' former Chief Executive Officer and Chairman of the Board of Directors, retained Traube to write a research report on the company. Moskowitz agreed that Ferrofluidics would pay Traube $5,000 plus expenses to write the report, payable after the report was published. On or about January 6, 1992, Traube contacted Swartwood to discuss whether Dickinson would be willing to publish and distribute his Ferrofluidics research report. Traube said that Ferrofluidics was paying Traube to write the report. Swartwood agreed to publish and distribute Traube's report. After Traube completed his research report, he received $4,055 for the report and $987 for expenses from Ferrofluidics through one of the company's investor relations firms. Swartwood reviewed the final report and instructed Dickinson's Des Moines office to publish and distribute it, which it did on March 30, 1992. The report did not disclose the source or amount of Traube's compensation. Dickinson distributed copies of the report to Ferrofluidics' shareholders and other interested parties, and was paid approximately $6,700 by Ferrofluidics for the printing and distribution of the report. In early June 1992, Traube agreed to prepare an update to his research report for $1,500 plus expenses. Traube completed the update during July 1992 and sent Ferrofluidics an invoice, dated July 15, 1992, for the update ($1,500) and expenses ($183), for a total of $1,683. Ferrofluidics paid Traube that amount through another of the company's investor relations firms. The update, which was published by Dickinson on July 12, 1992, ======END OF PAGE 2====== disclosed that it had been prepared "for cash compensation." The update did not disclose the source or amount of the compensation that Traube received for writing it. III. OPINION Section 17(b) of the Securities Act prohibits any person from publishing, giving publicity to, or circulating any notice, circular, advertisement, newspaper article, letter, investment service, or communication which describes a security for a consideration received or to be received, directly or indirectly, from an issuer, underwriter or dealer, without disclosing the receipt of such consideration and the amount thereof. Swartwood and Dickinson caused and willfully aided and abetted Traube's violations of Section 17(b) by publishing and distributing the research report and update without disclosing that Ferrofluidics had paid Traube and the amount of such payment. IV. FINDINGS Based on the above, the Commission finds that Swartwood and Dickinson caused and willfully aided and abetted violations of Section 17(b) of the Securities Act. V. ORDER Accordingly, IT IS HEREBY ORDERED that, A. Swartwood: 1. Be, and hereby is, censured; 2. Pursuant to Section 8A of the Securities Act, cease and desist from committing or causing any violations of, and committing or causing any future violations of, Section 17(b) of the Securities Act; 3. Pursuant to Section 21B of the Exchange Act, pay a civil money penalty of $25,000; and 4. Shall pay the civil money penalty within ten (10) days of the entry of the Order, by U.S. Postal money order, certified check, bank cashier's check, or bank money order, made payable to the Securities and Exchange Commission and shall be hand-delivered or mailed to the Comptroller, Securities and Exchange Commission, Operations Center, 6432 General Green Way, Stop 0-3, Alexandria, VA 22312, under ======END OF PAGE 3====== cover of a letter that identifies the respondent and the name and file number of this proceeding. A copy of the cover letter and of the form of payment shall be simultaneously transmitted to counsel for the Commission. B. Dickinson: 1. Be, and hereby is, censured; 2. Pursuant to Section 8A of the Securities Act, cease and desist from committing or causing any violations of, and committing or causing any future violations of, Section 17(b) of the Securities Act; 3. Pursuant to Section 21B of the Exchange Act, pay a civil money penalty of $25,000; and 4. Shall pay the civil money penalty within ten (10) days of the entry of the Order, by U.S. Postal money order, certified check, bank cashier's check, or bank money order, made payable to the Securities and Exchange Commission and shall be hand-delivered or mailed to the Comptroller, Securities and Exchange Commission, Operations Center, 6432 General Green Way, Stop 0-3, Alexandria, VA 22312, under cover of a letter that identifies the respondent and the name and file number of this proceeding. A copy of the cover letter and of the form of payment shall be simultaneously transmitted to counsel for the Commission. By the Commission. _________________________ Jonathan G. Katz Secretary ======END OF PAGE 4======