==========================================START OF PAGE 1====== UNITED STATES OF AMERICA Before the SECURITIES AND EXCHANGE COMMISSION Securities Act of 1933 Release No. 7349 / September 30, 1996 Securities Exchange Act of 1934 Release No. 37759 / September 30, 1996 Administrative Proceeding File No. 3-9129 ------------------------------------ : In the Matter of : ORDER INSTITUTING : PROCEEDINGS MAKING : FINDINGS, AND IMPOSING American Financial Partners, Ltd. : REMEDIAL SANCTIONS AND Jeffrey S. Rosenberg : CEASE-AND-DESIST ORDERS : : ------------------------------------ I. The Securities and Exchange Commission (the "Commission") deems it appropriate and in the public interest that public administrative proceedings be instituted pursuant to Section 8A of the Securities Act of 1933 ("Securities Act") and Sections 15(b)(6), 19(h) and 21C of the Securities Exchange Act of 1934 ("Exchange Act") against American Financial Partners, Ltd. ("AFP") and Jeffrey S. Rosenberg ("Rosenberg"). II. In anticipation of the institution of these administrative proceedings, Respondents have submitted Offers of Settlement ("Offers"), 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 in which the Commission is a party, without admitting or denying the findings set forth below, except with respect to paragraphs III.A. and B., which are admitted, Respondents consent to the issuance of this Order Instituting Proceedings, Making Findings, and Imposing Remedial Sanctions and Cease and Desist Orders ("Order"). ACCORDINGLY, IT IS ORDERED that administrative and cease- and- desist proceedings pursuant to Section 8A of the Securities Act and Sections 15(b)(6), 19(h) and 21C of the Exchange Act be, and hereby are, instituted against Respondents. III. On the basis of this Order and the Offers, the Commission finds the following: A. AFP is a Colorado corporation wholly-owned by Rosenberg. AFP is not and never has been registered with the Commission as a broker or dealer under Section 15(b) of the Exchange Act. B. At the time of the violations described herein, Rosenberg was seeking to become associated with a broker-dealer registered with the Commission. C. Rosenberg contacted six individuals to attempt to sell the debentures of Claim Net Systems, Inc., a computer software company located in Evergreen, Colorado. D. Rosenberg told two of his six contacts that the Claim Net debentures were being offered through AFP. Rosenberg also admitted to these investors that AFP was a broker-dealer, and, at the time of the offers, was taking steps to register AFP with the Commission as a broker-dealer. Accordingly, AFP, through Rosenberg, engaged in the business of effecting transactions in securities for the accounts of others. Because AFP was not registered with the Commission as a broker or dealer, AFP willfully violated Section 15(a) of the Exchange Act and Rosenberg willfully aided and abetted AFP's violation of Section 15(a) of the Exchange Act. E. In April and May 1995, AFP and Rosenberg willfully violated Section 17(a) of the Securities Act of 1933 ("Securities Act") in that, by use of the mails and the means and instruments of transportation and communication in interstate commerce, in the offer of Claim Net's debentures, they, directly and indirectly, employed devices, schemes or artifices to defraud; obtained money or property by means of untrue statements of material facts and by omitting 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 a course of business which would and did operate as a fraud or deceit upon the purchasers of Claim Net debentures. As a part of such conduct, AFP and Rosenberg made the following material misrepresentations to an offeree of the debentures: that the debentures were being offered through AFP; that AFP would be registered with the Commission as a broker-dealer within two weeks; that Rosenberg was licensed to sell securities; that AFP had a due diligence department and four employees in addition to Rosenberg who were licensed; and that Rosenberg had himself bought $25,000 of the debentures. F. The Commission has reviewed Rosenberg's sworn financial statement and other evidence adduced by Rosenberg, and, provided that he has submitted a true, accurate and complete sworn affidavit concerning his financial condition, including his assets, liabilities, income and expenses, has determined that Rosenberg does not have the financial ability to pay an administrative penalty. The determination not to impose an administrative penalty is based upon Rosenberg's demonstrated inability to pay an administrative penalty, provided that the Division of Enforcement ("Division") may petition the Administrative Law Judge ("ALJ") to reopen this matter to consider Rosenberg's inability to pay an administrative penalty if the Division obtains information from any source that the financial information provided by Rosenberg was inaccurate or incomplete in any material aspect. In connection with such petition, the ALJ may consider ordering Rosenberg to pay an administrative penalty. Rosenberg, may not, by way of defense to such petition, contest the allegations and findings in this Order or assert that an administrative penalty shall not be ordered for the violations of the federal securities laws alleged herein. IV. In view of the foregoing, the Commission deems it appropriate and in the public interest to impose the sanctions specified in the Offers. Accordingly, IT IS ORDERED THAT: A. Pursuant to Section 8A of the Securities Act and Section 21C of the Exchange Act, AFP cease and desist from committing or causing any violation, and any future violation, of Section 17(a) of the Securities Act and Section 15(a) of the Exchange Act. B. Rosenberg be, and hereby is, barred from association with any broker, dealer, investment adviser, investment company, or municipal securities dealer, provided however, that Rosenberg shall have the right to reapply with the appropriate self- regulatory organization, or where there is none, to the Commission, after a period of two years from the date of entry of this Order. C. Pursuant to Section 8A of the Securities Act and Section 21C of the Exchange Act, Rosenberg cease and desist from committing or causing any violation, and any future violation, of Section 17(a) of the Securities Act and Section 15(a) of the Exchange Act. By the Commission. ==========================================START OF PAGE 3====== Jonathan G. Katz Secretary ==========================================START OF PAGE 4======