UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION

SECURITIES EXCHANGE ACT OF 1934
Release No. 50422 / September 22, 2004

INVESTMENT ADVISERS ACT OF 1940
Release No. 2304 / September 22, 2004

ADMINISTRATIVE PROCEEDING
File No. 3-11674


In the Matter of

EDWARD J. STRAFACI,

Respondent.


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ORDER INSTITUTING ADMINISTRATIVE PROCEEDINGS PURSUANT TO SECTION 15(b) OF THE SECURITIES EXCHANGE ACT OF 1934 AND SECTION 203(f) OF THE INVESTMENT ADVISERS ACT OF 1940, MAKING FINDINGS, AND IMPOSING REMEDIAL SANCTIONS

I.

The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest that public administrative proceedings be, and hereby are, instituted pursuant to Section 15(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Section 203(f) of the Investment Advisers Act of 1940 ("Advisers Act") against Edward J. Strafaci ("Respondent").

II.

In anticipation of the institution of these proceedings, Respondent has submitted an Offer of Settlement (the "Offer") 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 to which the Commission is a party and without admitting or denying the findings herein, except as to the Commission's jurisdiction over him and the subject matter of these proceedings, and the findings contained in Section III.B. below, which are admitted, Respondent consents to the entry of this Order Instituting Administrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934 and Section 203(f) of the Investment Advisers Act of 1940, Making Findings, and Imposing Remedial Sanctions ("Order"), as set forth below.

III.

On the basis of this Order and Respondent's Offer, the Commission finds that:

A. Edward J. Strafaci, age 45, was at all relevant times an executive vice-president and the Director of Fixed Income Money Management for Lipper & Company, L.P. ("Lipper & Co.") and its affiliates, and the portfolio manager of four hedge funds managed by Lipper & Co. and its affiliates - Lipper Convertibles, L.P., formerly known as Lipco Partners, L.P. ("Convertibles"); Lipper Convertibles Series II, L.P. ("Series II"); Lipper Offshore Convertibles, L.P. ("Offshore"); and Lipper Fixed Income Fund, L.P (together, "the Funds"). At all relevant times, Lipper & Co. was registered with the Commission as an investment adviser, Lipper & Co., Convertibles, Series II, and Offshore were registered with the Commission as broker-dealers and were members of the NASD, and Strafaci was a registered representative of those broker-dealers. Strafaci was also the designated chief compliance officer of Lipper & Co. and the Funds. On January 14, 2002, Strafaci resigned his positions with the Funds and Lipper & Co. and its affiliates. Since that date, he has been affiliated in various capacities with a hedge fund holding company unrelated to Lipper & Co. Strafaci is a resident of Colts Neck, New Jersey.

B. On August 11, 2004, Strafaci pleaded guilty to one count of securities fraud in violation of Title 15, United States Code, Sections 78j(b) & 78ff, Title 17, Code of Federal Regulations, Section 240.10b-5, and Title 18, United States Code, Section 2 before the United States District Court for the Southern District of New York, in United States v. Edward Strafaci, 03 Crim. 1182.

C. The count of the indictment to which Strafaci pleaded guilty alleged, inter alia, that from in or about 1996 until in or about January 2002, Strafaci violated Section 10(b) of the Exchange Act and Rule 10b-5 thereunder by making, and causing Convertibles and Series II to make, materially false and misleading statements to investors and prospective investors about the way he valued the fund's portfolio securities, the value of those securities, and the value and performance of the fund. On October 29, 2003, the Commission instituted a civil injunctive action entitled Securities and Exchange Commission v. Edward J. Strafaci, 03 Civ. 8524 (S.D.N.Y.)(CSH) in the United States District Court for the Southern District of New York, based on substantially the same conduct as the conduct underlying the indictment.

IV.

In view of the foregoing, the Commission deems it appropriate and in the public interest to impose the sanctions agreed to in Respondent Strafaci's Offer.

Accordingly, it is hereby ORDERED:

Pursuant to Section 15(b)(6) of the Exchange Act and Section 203(f) of the Advisers Act, that Respondent Strafaci be, and hereby is, barred from association with any broker, dealer, or investment adviser.

Any reapplication for association by Respondent Strafaci will be subject to the applicable laws and regulations governing the reentry process, and reentry may be conditioned upon a number of factors, including, but not limited to, the satisfaction of any or all of the following: (a) any disgorgement ordered against Respondent Strafaci, whether or not the Commission has fully or partially waived payment of such disgorgement; (b) any arbitration award related to the conduct that served as the basis for the Commission order; (c) any self-regulatory organization arbitration award to a customer, whether or not related to the conduct that served as the basis for the Commission order; and (d) any restitution order by a self-regulatory organization, whether or not related to the conduct that served as the basis for the Commission order.

For the Commission, by its Secretary, pursuant to delegated authority.

Jonathan G. Katz
Secretary