UNITED STATES OF AMERICA Before the SECURITIES AND EXCHANGE COMMISSION SECURITIES EXCHANGE ACT OF 1934 Release No. 41265 \ April 8, 1999 INVESTMENT ADVISERS ACT OF 1940 Release No. 1797 \ April 8, 1999 ADMINISTRATIVE PROCEEDING File No. 3-9868 ----------------------------------- : In the Matter of : : : ORDER INSTITUTING : PUBLIC PROCEEDINGS, MAKING PETER C. BUCCHIERI, : FINDINGS, AND IMPOSING : REMEDIAL SANCTIONS : : Respondent. : : ----------------------------------- I. The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest that public administrative proceedings be instituted against Peter C. Bucchieri, ("Bucchieri") pursuant to Sections 15(b)(6) and 19(h) of the Securities Exchange Act of 1934 ("Exchange Act") and Section 203(f) of the Investment Advisers Act of 1940 ("Advisers Act"). II. In anticipation of the institution of this administrative proceeding, Bucchieri has submitted an Offer of Settlement ("Offer") which the Commission has determined to accept. Solely for the purpose of this proceeding and any other proceeding brought by or on behalf of the Commission or to which the Commission is a party, and without admitting or denying the findings contained herein, except as to paragraphs III. A. and III. B. below, which Bucchieri admits, Bucchieri consents to the issuance of this Order Instituting Public Proceedings, Making Findings, And Imposing Remedial Sanctions ("Order"). Accordingly, IT IS ORDERED that an administrative proceeding be and hereby is instituted against Bucchieri pursuant to Sections 15(b)(6) and 19(h) of the Exchange Act and Section 203(f) of the Advisers Act. III. On the basis of this Order and the Offer, the Commission finds that:[1] A. Bucchieri was a principal of Star Capital Management, Inc. ("Star"), a now defunct investment advisory firm. Star never was registered with the Commission in any capacity. From 1988 through November 1994, Bucchieri was associated with Bucchieri Asset Management, a registered broker-dealer and investment adviser. B. Bucchieri pled guilty, on November 13, 1996, in the United States District Court for the Southern District of New York, to one felony count of conspiracy to commit wire and securities fraud in connection with his role in Star. The Court entered the judgment of conviction on March 16, 1998. United States v. Bucchieri, 96 Cr. 1070 (RJW). C. The Information underlying the conviction charged, among other things, that from 1993 through 1995, while associated with Star, Bucchieri misrepresented to Star clients that he had made "pooled" real estate investments in Colorado on their behalf, and that he would manage those investments. Contrary to these representations, Bucchieri, and another person associated with Star, converted these Star clients' funds to their own uses, including paying the operating expenses of Star and other personal and business expenses. D. On March 6, 1998, the Court sentenced Bucchieri to serve 33 months in a federal penitentiary and to pay restitution of $1,747.551.86. E. On February 26, 1999, Bucchieri was permanently enjoined by the United States District Court for the Southern District of New York in SEC v. Peter C. Bucchieri, et al., 96 Civ. 8508 (LMM) (S.D.N.Y) ("Injunctive Action"), from violating Section 17(a) of the Securities Act of 1933, Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, and Sections 203(a), 206(1), 206(2), and 206(4) of the Advisers Act. F. The Commission's Complaint in the Injunctive Action alleged, in part, as follows: From January 1993 through February 1995, Bucchieri, individually and through Star, acted as an investment adviser. Bucchieri misappropriated advisory client funds by falsely representing to Star clients and others that their funds were being invested in "pooled" real estate investments, when, in fact, such funds were being converted to Bucchieri's own personal use. In addition, in an attempt to conceal the scheme, Bucchieri and others created and sent to advisory clients false account statements, backdated promissory notes, and other misleading documents. By this and similar means, Bucchieri misappropriated $1.2 million from his advisory clients. Bucchieri also failed to register Star as an investment adviser with the Commission and to comply with certain record- keeping and audit provisions set forth in Rule 206(4)-2 under the Advisers Act which are required of investment advisers who maintain custody and possession of client funds or securities and certain disclosure provisions relating to the adviser's financial condition set forth in Rule 206(4)-4(a)(1) under the Advisers Act which are required of investment advisers who have discretionary authority or custody over client funds and securities. IV. Based upon the foregoing, it is in the public interest to impose the sanctions specified in the Offer. Accordingly, IT IS HEREBY ORDERED, effective immediately, that Bucchieri be, and hereby is, barred from association with any broker, dealer, municipal securities dealer, investment adviser, or investment company. By the Commission. Jonathan G. Katz Secretary **FOOTNOTES** [1]: The findings herein are made pursuant to Respondent’s Offer and are not binding on any other person or entity in this or any other proceeding.