UNITED STATES OF AMERICA Before the SECURITIES AND EXCHANGE COMMISSION SECURITIES EXCHANGE ACT OF 1934 RELEASE NO. 39062 / September 12, 1997 ADMINISTRATIVE PROCEEDING FILE NO. 3-9406 ______________________________ : ORDER INSTITUTING PROCEEDINGS, In the Matter of : MAKING FINDINGS AND IMPOSING : REMEDIAL SANCTIONS PURSUANT TO EDWARD M. COLLINS, : SECTIONS 15(b) and 19(h) OF THE : SECURITIES EXCHANGE ACT OF 1934 Respondent. : : ______________________________: I. The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest that public administrative proceedings be instituted against Edward M. Collins ("Collins") pursuant to Sections 15(b) and 19(h) of the Securities Exchange Act of 1934 ("Exchange Act"). II. In anticipation of the institution of these proceedings, Collins 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 to which the Commission is a party, and without admitting or denying the Commission's findings contained herein, except the Commission's finding set forth in Paragraph III C, which is admitted, Collins consents to the entry of this Order Instituting Proceedings, Making Findings and Imposing Remedial Sanctions pursuant to Sections 15(b) and 19(h) of the Exchange Act ("Order"). Accordingly, IT IS HEREBY ORDERED that proceedings pursuant to Sections 15(b) and 19(h) of the Exchange Act be and hereby are instituted. III. On the basis of this Order and Collins' Offer, the Commission finds that<(1)>: A. At all relevant times Collins was never registered as a broker or dealer with the Commission pursuant to the Exchange Act. At all relevant times, T. Collins assisted in the operation of a business known as Lake States, Inc. B. At all relevant times, no registration statement had been filed with the Commission or was in effect under the Securities Act of 1933 ("Securities Act") with respect to the securities of Lake States. C. On September 5, 1997, in the case of SEC v. Edward M. Collins, (Civil Action File No. 95 Civ. 7251), the United States District Court for the Northern District of Illinois, Eastern Division, entered an Order of Permanent Injunction and Other Equitable Relief against Collins, pursuant to his consent and without his admitting or denying the allegations contained in the Commission's Complaint, enjoining Collins from violating Sections 5(a), 5(c) and 17(a) of the Securities Act, Sections 10(b), 15(a)(1) and 15(c)(1) of the Exchange Act and Rules 10b-5 and 15c1-2 promulgated thereunder. The Complaint was based on the conduct described below. Collins defrauded approximately 460 investors, residing in 15 states, through the offer and sale of $120 million in unregistered securities, in the form of investment contracts ("Pool Investments"). Investors were told that their funds would be pooled with other investors' funds to invest in commodity futures and other business ventures. Instead of investing all of the money in commodity futures and other business ventures, Collins was running a Ponzi scheme. In fact, most of the investor funds given to Collins were used to pay his personal and business expenses and to pay interest and principal to prior investors. Collins also made misrepresentations to investors regarding the use of proceeds, the rate of return, the risk of the investment and the nature of a Commodity Futures Trading Commission investigation. D. During the period from in or around December 1984 to June 1994, Collins willfully violated Sections 5(a) and 5(c) of the Securities Act, in that he offered to sell, offered to buy, sold and delivered after the sale to members of the public through the use or medium of any prospectus or otherwise certain securities, in the form of Pool Investments, at a time when no registration statement was on file or in effect with the Commission with respect to such securities. As part of this conduct, Collins engaged in the acts and practices detailed in Paragraph III.C. above. <(1)> The findings herein are made pursuant to Collins' Offer and are not binding on any other person or entity named in this or any other proceeding. ======END OF PAGE 2====== E. During the period from in or around December 1984 to June 1994, Collins willfully violated Section 17(a) of the Securities Act in that he, in the offer or sale of securities, directly or indirectly, employed devices, schemes or artifices to defraud; obtained money or property by means of untrue statements of material facts, or omissions to state material facts necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; or, engaged in transactions, practices or courses of business which would or did operate as a fraud or deceit. As part of this conduct, Collins engaged in the acts and practices detailed in Paragraph III.C. above. F. During the period from in or around December 1984 to June 1994, Collins willfully violated Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder in that he, in connection with the purchase or sale of certain securities, namely the Pool Investments, directly or indirectly: employed devices, schemes or artifices to defraud; obtained money or property by means of untrue statements of material fact or 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; or engaged in acts, practices or courses of business which would or did operate as a fraud or deceit. As part of this conduct, Collins engaged in the acts and practices detailed in Paragraph III.C. above. G. During the period from in or around December 1984 to June 1994, Collins willfully violated Section 15(a)(1) of the Exchange Act in that he effected transactions in, or induced or attempted to induce the purchase or sale of, certain securities (other than an exempted security or commercial paper, bankers' acceptances, or commercial bills), at a time when Collins was not registered with the Commission as a broker or dealer. As part of this conduct, Collins engaged in the acts and practices detailed in Paragraph III.C. above. H. During the period from in or around December 1984 to June 1994, Collins willfully violated Section 15(c)(1) of the Exchange Act and Rule 15c1-2 promulgated thereunder in that he, while acting as a broker or dealer, effected transactions in, or induced or attempted to induce the purchase or sale of, certain securities (other than an exempted security or commercial paper, bankers' acceptances, or commercial bills) otherwise than on a national securities exchange of which it is a member by means of any manipulative, deceptive, or other fraudulent device or contrivance. As part of this conduct, Collins engaged in the acts and practices detailed in Paragraph III.C. above. I. While engaged in the activities described in Paragraphs III.D. through III.H., Collins, directly or indirectly, made use of means or instruments of transportation or communication in interstate commerce or of the mails. IV. In light of the foregoing, it is in the public interest to impose the sanctions specified in the Offer submitted by Collins. ======END OF PAGE 4====== Accordingly, IT IS HEREBY ORDERED that Edward M. Collins be, and hereby is, barred from association with any broker, dealer, municipal securities dealer, investment company or investment adviser. By the Commission. Jonathan G. Katz Secretary ======END OF PAGE 5======