IN THE UNITED STATES OF AMERICA Before The SECURITIES AND EXCHANGE COMMISSION Securities Exchange Act of 1934 Release No. 40471 / September 24, 1998 Administrative Proceeding File No. 3-9721 ________________________ : In the Matter of : : ORDER INSTITUTING PUBLIC John von der Lieth, III, : PROCEEDINGS PURSUANT TO and Daniel F. Dugan, : SECTIONS 15(b) AND 19(h) OF THE : SECURITIES EXCHANGE ACT OF 1934, : MAKING FINDINGS, AND IMPOSING Respondents. : SANCTIONS : ________________________ : I. The Securities and Exchange Commission deems it appropriate and in the public interest to institute public administrative proceedings against John von der Lieth, III ("Von der Lieth") and Daniel F. Dugan ("Dugan") pursuant to Sections 15(b) and 19(h) of the Securities Exchange Act ("Exchange Act"). II. In anticipation of the institution of these proceedings, Von der Lieth and Dugan have submitted Offers of Settlement to the Commission 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 jurisdiction, which they admit, Dugan and Von der Lieth have consented to the issuance of this Order Instituting Public Proceedings Pursuant to Section 15(b) and 19(h) of the Securities Exchange Act of 1934, Making Findings, and Imposing Sanctions ("Order"). ACCORDINGLY, IT IS 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, the Offer of Settlement of Daniel F. Dugan, and the Offer of Settlement of John von der Lieth III, the Commission makes the following findings:[1] A. From April 1992 to December 1996, Von der Lieth was associated with a broker-dealer registered with the Commission pursuant to Section 15 (b) of the Exchange Act. B. From May 1994 to January 1995, Dugan was associated with a broker-dealer registered with the Commission pursuant to Section 15 (b) of the Exchange Act. C. The Commission filed a complaint on September 1, 1998 alleging that Von der Lieth recommended and sold Marcorp stock to his customers without having an adequate basis for making the recommendation. In addition, the complaint alleges that from about August 8 through October 6, 1994, Von der Lieth executed purchase orders on behalf of certain clients knowing, or recklessly not knowing, that the purchases were part of a manipulative trading pattern. The complaint also alleges that Von der Lieth solicited at least two clients to purchase Marcorp stock when he knew, or was reckless in not knowing, that Marcorp's stock was being manipulated, and that he failed to inform his clients of the manipulation. D. The Commission's complaint alleges that on or about September 3, 1994 Dugan accepted $10,000 in undisclosed compensation from a Marcorp principal in exchange for recommending and selling Marcorp stock to his customers from July 27, 1994 through September 20, 1994. The complaint also alleges that Dugan recommended and sold Marcorp stock to his customers without having an adequate basis for making the recommendation. E. Without admitting or denying the allegations in the Commission's complaint, Von der Lieth, in his Consent of John von der Lieth III, agreed to the entry of an order of the federal district court imposing sanctions. F. Without admitting or denying the allegations in the Commission's complaint, Dugan, in his Consent of Daniel F. Dugan, agreed to the entry of an order of the federal district court imposing sanctions. G. On September 3, 1998, in SEC v. Douglas G. McCaskey, et. al., C.A. No. 98-CV- 6153, the United States District Court for the Southern District of New York entered a Final Judgment of Permanent Injunction as to John von der Lieth, III and a Final Judgment of Permanent Injunction as to Daniel F. Dugan permanently enjoining Von der Lieth and Dugan from: (1) Violating Section 17 (a) of the Securities Act of 1933; and (2) Violating Section 10 (b) of the Exchange Act and Rule 10b-5 promulgated thereunder. IV. ORDER Based on the foregoing, the Commission finds it appropriate and in the public interest to accept the Offers submitted by Von der Lieth and Dugan and to impose the sanctions consented to therein. Accordingly, IT IS HEREBY ORDERED THAT Von der Lieth and Dugan be, and hereby are, barred from association with any broker, dealer, municipal securities dealer, investment adviser, or investment company, with the right to reapply for association after 5 years to the appropriate self- regulatory organization, or if there is none, to the Commission. By the Commission. Jonathan G. Katz Secretary **FOOTNOTES** [1]: The findings herein are made pursuant to the Respondents' Offers of Settlement and are not binding on any other person or entity in this or any other proceeding. SERVICE LIST Rule 141 of the Commission's Rules of Practice provides that the Secretary, or other duly authorized officer of the Commission, shall serve a copy of the Order Instituting Public Proceedings Pursuant to Sections 15(b) and 19(h) of the Securities Exchange Act of 1934 , Making Findings, and Imposing Sanctions on each person named as a party in the Order and their legal agents. The attached Order Instituting Public Proceedings Pursuant to Sections 15(b) and 19(h) of the Securities Exchange Act of 1934, Making Findings, and Imposing Sanctions has been sent to the following parties and other persons entitled to notice: The Honorable Brenda P. Murray Chief Administrative Law Judge Securities and Exchange Commission 450 5th Street, N.W., Mail Stop 11-6 Washington, D.C. 20549 Mr. John von der Lieth, III 412 Meadowsweep Lane Greenville, SC 29615 Mr. Daniel F. Dugan 1175 Hancock Cr. Boulder, CO 80303