UNITED STATES OF AMERICA Before the SECURITIES AND EXCHANGE COMMISSION SECURITIES EXCHANGE ACT OF 1934 Release No. 37063 / April 3, 1996 ADMINISTRATIVE PROCEEDING File No. 3-8929 ------------------------- : In the Matter of : : ORDER MAKING FINDINGS GEORGE J. CONWAY : AND IMPOSING REMEDIAL : SANCTIONS BY DEFAULT : ------------------------- George J. Conway (Mr. Conway) is in default under the Commission's Rules of Practice, Rules 155 and 220, 17 C.F.R.  201.155 and 201.220 (1996), because he failed to answer either the Order Instituting Public Proceedings (Order) which the Commission issued on January 18, 1996 or the Show Cause Order which I issued on March 1, 1996. Accordingly, I find that the allegations in the Order are true: A. On September 28, 1994, the Commission filed an action against Mr. Conway, and ten others captioned Securities and Exchange Commission v. Michael J. Randy, et al., Civil Action No. 94 C 5902 (N.D. Ill.). On September 15, 1995, a Final Judgment of Permanent Injunction and Other Equitable Relief was entered by default against Mr. Conway permanently enjoining him from, directly or indirectly, engaging in conduct violative of Sections 5(a), 5(c), 17(a)(1), 17(a)(2) and 17(a)(3) of the Securities Act of 1933 (Securities Act), Sections 10(b) and 15(a)(1) of the Securities Exchange Act of 1934 (Exchange Act) and Rule 10b-5 promulgated thereunder. B. On August 15, 1993, Mr. Conway was convicted in the United States District Court for the District of Wyoming of conspiracy to commit mail fraud, wire fraud and money laundering based upon similar conduct alleged by the Commission in its complaint, and on December 6, 1993, he was sentenced to five years imprisonment. United States v. McKinley, et al., No. 92 CR 0128J (D. Wyo.). C. From at least April 1991 to November 1992, Mr. Conway willfully violated Section 17(a) of the Securities Act in that, in the offer and sale of securities, by the use of the means and instruments of transportation or communication in interstate commerce and by the use of the mails, directly and indirectly, he ==========================================START OF PAGE 2====== employed devices, schemes and artifices to defraud; obtained money and property by means of untrue statements of material facts and omitted to state material facts necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; and engaged in transactions, practices, and courses of business which operated or would operate as a fraud and deceit upon the purchaser. As part of this conduct, Mr. Conway and his agents, in the offer and sale of Canadian Trade Bank, Ltd. "certificates of deposit" (CTB CDs), misrepresented material facts and omitted to state material facts to investors concerning the legitimacy of CTB, the safety of the investment and the use of proceeds. Specifically, Mr. Conway and his agents misrepresented to investors that the CDs were a safe investment and that Mr. Conway invested "all" of his money in the CDs. Furthermore, Mr. Conway and his agents failed to inform investors that CTB was not a bank and was not legally licensed as a bank by any governmental agency, that Mr. Randy performed substantially all activities relating to CTB at his offices in Illinois and that Mr. Conway received 10% commissions for selling the CDs. Mr. Conway and his agents sold over $570,000 worth of the CTB CDs to at least seven investors from which Mr. Conway personally received over $57,000 in commissions. D. From at least April 1991 to November 1992, Mr. Conway willfully violated Section 10(b) of the Exchange Act and Rule 10b-5 thereunder in that, directly and indirectly, by the use of the means and instrumentalities of interstate commerce, and of the mails, in connection with the purchase and sale of securities, he employed devices, schemes and artifices to defraud; made untrue statements of material facts and omitted to state material facts necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; and engaged in acts, practices and courses of business which operated or would operate as a fraud and deceit. As part of this conduct, Mr. Conway engaged in the activities described in paragraph C. above. E. From at least April 1991 to November 1992, Mr. Conway willfully violated Section 15(a) of the Exchange Act in that he made use of the mails and means and instrumentalities of interstate commerce to effect transactions in and induced the purchase of securities without being registered as a broker or dealer in accordance with Section 15(b) of the Exchange Act. As part of this conduct, Mr. Conway effected transactions in and induced the purchase of CTB CDs without being registered as a broker or dealer in accordance with Section 15(b) of the Exchange Act. ==========================================START OF PAGE 3====== F. From at least April 1991 to November 1992, Mr. Conway willfully violated Section 5(a) of the Securities Act in that, directly and indirectly, he made use of the means and instruments of transportation and communication in interstate commerce and of the mails, through the use or medium of a prospectus and otherwise, to sell securities and carried and caused to be carried through the mails and interstate commerce, by the means and instruments of transportation, securities, for the purpose of sale and delivery after sale, without a registration statement being in effect with respect to such securities and while no exemption from registration was applicable. As part of this conduct, Mr. Conway sold CTB CDs to investors without a registration statement being in effect with respect to such securities and while no exemption from registration was applicable. G. From at least April 1991 to November 1992, Mr. Conway willfully violated Section 5(c) of the Securities Act in that, directly and indirectly, he made use of the means and instruments of transportation and communication in interstate commerce and of the mails to offer to sell, through the use of a prospectus or otherwise, securities, without a registration statement being filed with respect to such securities and while no exemption from registration was applicable. As part of this conduct, Mr. Conway offered to sell CTB CDs without a registration statement being filed with respect to such securities and while no exemption from registration was applicable. I find further that it is in the public interest to sanction Mr. Conway pursuant to Sections 15(b) and 19(h) of the Exchange Act. I ORDER that George J. Conway is barred from association with any broker or dealer and from association with any member of a national securities exchange or registered securities association. IT IS FURTHER ORDERED that the hearing scheduled to begin on April 17, 1996, be, and hereby is, cancelled. ____________________________________ Brenda P. Murray Chief Administrative Law Judge