UNITED STATES SECURITIES AND EXCHANGE COMMISSION
SECURITIES EXCHANGE ACT OF 1934
Release No. 46431 / August 29, 2002
INVESTMENT ADVISERS ACT OF 1940
Release No. 2049 / August 29, 2002
File No. 3-10875
ADMINISTRATIVE PROCEEDINGS INSTITUTED AGAINST MONICA LYNN COLEMAN BASED ON HER CRIMINAL CONVICTION
The Securities and Exchange Commission ("Commission") announced that it has instituted public administrative proceedings against Monica Lynn Coleman, of Baltimore, Maryland. Coleman was a managing partner for Coleman and Craten LLC ("Coleman Craten"), a company registered with the Commission as an investment adviser from March 1998 until January 2000, when its investment adviser registration was cancelled for failure to establish its continued eligibility for registration with the Commission. Coleman also owned 50 percent of the firm.
The Commission's Order Instituting Public Administrative Proceedings ("Order") alleges that from September 30, 1998 to April 20, 1999, Coleman was a registered representative associated with Corporate Securities Group, Inc., a broker-dealer registered with the Commission. From November 3, 1987 to February 17, 1998, Coleman was a registered representative associated with Legg Mason Wood Walker Incorporated ("Legg Mason"), a broker-dealer registered with the Commission. In February 1998, Coleman established Coleman Craten. Both Coleman and Coleman Craten are currently in bankruptcy.
The Commission's Order also alleges that on April 16, 2002, in the case of State of Maryland v. Monica Lynn Coleman, No. 100362045, in the Circuit Court for Baltimore City, Coleman pleaded guilty to five felony counts of securities fraud and one misdemeanor count of fraudulent misappropriation by a fiduciary. Sentencing is scheduled for September 2002.
The criminal bill alleged that between June 1997 and April 1999, while associated with either Legg Mason or Coleman Craten, Coleman misappropriated more than $2.6 million from at least five investors. As part of the fraud, Coleman solicited various Legg Mason customers to invest their money with her and through Coleman Craten. Among other things, she represented that she would invest their funds in various investment opportunities, including her family business and overseas businesses. Coleman promised these investors annual rates of return of as much as 30 percent and that their investments would be risk free and guaranteed. Rather than invest the funds as promised, Coleman used new investor funds to pay existing investors, business expenses, and to support a lavish lifestyle.
A hearing will be scheduled before an administrative law judge to determine whether the allegations contained in the Order are true, to provide Coleman an opportunity to dispute these allegations, and to determine what sanctions, if any, are appropriate and in the public interest.