Release No. 41914 / September 24, 1999

Release No. 1832 / September 24, 1999

File No. 3-10028

In the Matter of : ORDER INSTITUTING
Respondent : SANCTIONS


The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest that public administrative proceedings be instituted pursuant to Sections 15(b) and 19(h) of the Securities Exchange Act of 1934 ("Exchange Act") and Section 203(f) of the Investment Advisers Act of 1940 ("Advisers Act") against Bernard J. Krispinsky ("Krispinsky").

In anticipation of the institution of these proceedings, Krispinsky has submitted an Offer of Settlement ("Offer") 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, Krispinsky, by his Offer, consents to the entry of the findings and imposition of sanctions contained in this Order Instituting Public Proceedings, Making Findings and Imposing Remedial Sanctions ("Order").

Accordingly, IT IS ORDERED that proceedings, pursuant to Sections 15(b) and 19(h) of the Exchange Act and Section 203(f) of the Advisers Act, against Krispinsky be, and hereby are, instituted.


On the basis of this Order and the Offer submitted by Krispinsky, the Commission finds that:

A. Bernard J. Krispinsky is a resident of Hermitage, Pennsylvania. From August 1989 to November 1997, Krispinsky was associated with a broker-dealer registered with the Commission.

B. On September 23, 1999, an Order of Permanent Injunction was entered against Krispinsky by the United States District Court for the Western District of Pennsylvania, in Securities and Exchange Commission v. Bernard J. Krispinsky, Civil Action No. 99-1561, pursuant to his consent. The Order of Permanent Injunction, inter alia, enjoined Krispinsky from future violations of Section 17(a) of the Securities Act of 1933; Section 10(b) of the Exchange Act and Rule 10b-5 thereunder; and Sections 206(1) and 206(2) of the Advisers Act.

C. The Commission's Complaint alleged that between 1995 and 1997, Krispinsky, while acting as an unregistered investment adviser, engaged in a scheme to defraud approximately 100 investors who invested approximately $240,000 in seven investment clubs, utilizing misrepresentations and omissions of material fact. During the course of the scheme, Krispinsky acted as the funds director of these investment clubs, made all investment decisions, and traded on behalf of the clubs. Through his trading, Krispinsky lost at least 53% of the value of investors' funds in the clubs. In an attempt to conceal the losses and induce additional investments, Krispinsky created and distributed false account statements and made false oral statements to investors. In these statements, Krispinsky, among other things, overstated the value of club accounts by as much as 807%; failed to disclose the losses he incurred; stated that he made large profits for the clubs when he did not; and listed as club holdings securities that the clubs did not own.


On the basis of the foregoing, the Commission deems it appropriate and in the public interest to accept the Offer submitted by Krispinsky and to impose the sanctions specified therein.

Accordingly, IT IS HEREBY ORDERED that Krispinsky be, and hereby is, barred from association with any broker, dealer, municipal securities dealer, investment adviser or investment company.

By the Commission.

Jonathan G. Katz