UNITED STATES OF AMERICA
|In the Matter of
JOHN GARDNER BLACK and
DEVON CAPITAL MANAGEMENT, INC.
ORDER INSTITUTING PUBLIC PROCEEDDINGS, MAKING FINDINGS, IMPOSING REMEDIAL SANCTIONS
The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest that public administrative proceedings be instituted pursuant to Sections 203(e) and 203(f) of the Investment Advisers Act of 1940 ("Advisers Act") against Devon Capital Management, Inc. ("Devon") and John Gardner Black ("Black").
In anticipation of the institution of these proceedings, Devon and Black have submitted Offers of Settlement ("Offers") which the Commission has determined to accept. Solely for the purpose of this proceeding and any other proceedings brought by or on behalf of the Commission or in which the Commission is a party, and without admitting or denying the findings contained herein, except for those set forth below in Section II, paragraphs A. and B., which are admitted, Devon and Black, by their respective Offers, consent to the entry of the findings and imposition of the sanctions contained in this Order Instituting Public Proceedings, Making Findings and Imposing Remedial Sanctions ("Order").
Accordingly, IT IS ORDERED that proceedings, pursuant to Sections 203(e) and 203(f) of the Advisers Act, against Devon and Black be, and hereby are, instituted.
On the basis of this Order and the Offers submitted by Devon and Black, the Commission finds that: 1
A. Devon Capital Management, Inc. has been registered with the Commission as an investment adviser from December 15, 1989 until the present. As of September 1997, Devon managed approximately $345 million in assets for approximately 100 investment advisory clients, the vast majority of which were local school districts seeking to invest the proceeds of municipal bond offerings.
B. John Gardner Black was, at all times relevant to this proceeding, the president, portfolio manager, and sole shareholder of Devon.
C. On December 12, 1997, an Order of Permanent Injunction was entered against Black and Devon by the United States District Court for the Western District of Pennsylvania, in Securities and Exchange Commission v. John Gardner Black, et al., 97-CV-2257, pursuant to their consent. The Order of Permanent Injunction, inter alia, enjoined Black and Devon from future violations of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. In addition, Devon was enjoined from future violations of Sections 206(1), 206(2) and 206(4) of the Advisers Act and Rule 206(4)-2 thereunder, and Black was enjoined from aiding and abetting violations of these same provisions.
D. The Commission's Complaint alleged that Black, acting through Devon and a corporate affiliate of Devon's, made misrepresentations and omissions of material fact in connection with the solicitation and management of Devon's investment advisory clients' funds, resulting in the loss of millions of dollars of municipal bond proceeds invested by school districts and other local government units throughout Western and Central Pennsylvania. The Complaint alleged that Black and Devon benefitted financially from their actions.
On the basis of the foregoing, the Commission deems it appropriate and in the public interest to accept the Offers submitted by Devon and Black and to impose the sanctions specified therein.
Accordingly, IT IS HEREBY ORDERED THAT:
A. The registration of Devon Capital Management, Inc. with the Commission as an investment adviser is revoked.
B. John Gardner Black is barred from association with any broker, dealer, municipal securities dealer, investment adviser or investment company.By the Commission.
|1||The findings herein are made pursuant to Devon's and Black's respective Offers and are not binding on any other person or entity in this or any other proceeding.|
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