UNITED STATES OF AMERICA
SECURITIES AND EXCHANGE COMMISSION
Securities Exchange Act of 1934
Release No. 50963 / January 5, 2005
Investment Advisers Act of 1940
Release No. 2338 / January 5, 2005
Admin. Proc. File No. 3-11787
ADMINISTRATIVE PROCEEDINGS INSTITUTED AGAINST MARK D. MONTANA
The Commission announced that it issued an order instituting proceedings 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 Mark D. Montana. In the order, the Division of Enforcement alleges that on December 2, 2004, a final judgment by default was entered against Montana, individually and doing business as M & M Properties; and M & M Financial, Inc. permanently enjoining each from future violations of Section 17(a) of the Securities Act of 1933 ("Securities Act"), Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, in the civil action captioned Securities and Exchange Commission v. Mark D. Montana, et al., Civil Action Number G-04-542 (USDC/SDTX- Galveston Division). The Commission's Complaint in SEC v. Mark D. Montana, et al. alleged that beginning in 1999, Montana convinced approximately 300 persons to invest their funds with M & M Financial and defrauded those investors in the following manner: 1) Montana falsely promised investors that M & M Financial would purchase at a discount, with the investors' pooled funds, large blocks of securities that he would select using his purported vast securities industry expertise; 2) Montana promised investors, without a reasonable basis, an annual return of up to 15 percent; 3) Montana falsely assured the investors that their funds would remain safe, claiming that their moneys were SIPC insured; 4) on a monthly or quarterly basis, as evidence of the purported success and safety of the investments, Montana prepared and mailed to the investors "account statements" purportedly reflecting the composition and value of their investments, and furnished some investors automatic principal withdrawals.
A hearing before an administrative law judge will be scheduled to determine whether the allegations in the Order Instituting Proceedings are true, to provide Montana an opportunity to dispute these allegations, and to determine what remedial action, if any, is appropriate in the public interest.
The Commission directed that an administrative law judge shall 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