UNITED STATES OF AMERICA
SECURITIES AND EXCHANGE COMMISSION
Securities Exchange Act of 1934
Release No. 50315 / September 3, 2004
Admin. Proc. File No. 3-11631
In the Matter of Franklin Marone
The Securities and Exchange Commission ("Commission") announced today that it issued an Order Instituting Public Administrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934 (Order) against Franklin Marone formerly a resident of Fairfield, Connecticut and Windham, New York. In the Order, the Division of Enforcement alleges that the United States District Court for the Southern District of New York has issued a permanent injunction against Marone by partial final judgment on consent, enjoining Marone from future violations of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder, as well as ordering disgorgement of ill-gotten gains and a civil penalty in amounts to be determined at a later date. SEC v. Franklin Marone, et al., 04 Civ. 01227 (S.D.N.Y.)( NRB).
The Commission's Complaint alleges, among other things, that between January 1999 and January 2004, Marone induced at least 36 individuals to invest at least $3.2 million in Patrollers Capital Fund, a fictitious equity fund that Marone purported to manage. The Complaint further alleges that Marone misappropriated virtually all of the investors' funds for his personal use and that of the relief defendant Marita Marone, falsely stated to investors that their funds were invested, disseminated false account statements indicating that investors funds were fully invested and earning returns, and otherwise engaged in a variety of conduct which operated as a fraud and deceit on investors.
A hearing will be scheduled before an administrative law judge to determine whether the allegations contained in the Order are true, to provide Marone an opportunity to dispute these allegations, and to determine what, if any, remedial sanctions against Marone are appropriate and in the public interest pursuant to Section 15(b) of the Exchange Act. The Commission directed that an administrative law judge issue an initial decision in this matter within 210 days from the date of service of the Order Instituting Proceedings.
See also the Order in this matter