Release No. 1839 / September 30, 1999

Release No. 24061 / September 30, 1999

File No. 3-9734

In the Matter of:

Rupay-Barrington Investment Advisory Services, Inc.
Formerly Known As
Valley Forge Barrington, and Frederick A. Wolf

Order Making Findings, Imposing Remedial Sanctions and Imposing a Cease-and-Desist Order as to Rupay-Barrington Investment Advisory Services, Inc.


The Securities and Exchange Commission ("Commission") has previously instituted a public administrative and cease-and-desist proceeding against Rupay-Barrington Investment Advisory Services, Inc. ("Barrington" or "Respondent") and Frederick A. Wolf ("Wolf") pursuant to Sections 203(e), 203(f), 203(i) and 203(k) of the Investment Advisers Act of 1940 ("Advisers Act") and Section 9(b) of the Investment Company Act of 1940 ("Investment Company Act").1Barrington has subsequently 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 that Barrington admits the jurisdiction of the Commission over it and over the subject matter of this proceeding, Barrington consents to the issuance of this Order Making Findings and Imposing a Cease-and-Desist Order ("Order") and to the entry of the findings and the imposition of the relief set forth below.2


On the basis of this Order and Barrington's Offer, the Commission finds the following:

A. Respondent

Valley Forge Barrington, Ltd., is a Michigan corporation and has been a registered investment adviser with the Commission since 1986. Valley Forge Barrington became a wholly-owned subsidiary of Valley Forge Capital Holdings, Inc.("VFCH") in March 1994. Frederick A. Wolf ("Wolf") was the president of Valley Forge Barrington between March 1994 and December 1996 and a director of VFCH between March 1996 through December 1996. The conduct alleged in this Order occurred between the period March 1994 and July 1996. In January 1997, a controlling interest in VFCH was acquired by JPJ Asset Management, Inc. Thereafter, VFCH's name was changed to the Rupay-Barrington Financial Group, Inc. and Valley Forge Barrington's name was changed to Rupay-Barrington Investment Advisory Services, Inc. Wolf is no longer an employee of Barrington.

None of the allegations contained in this Order concern conduct by the current owners, officers, management or employees of Rupay-Barrington. The allegations relate solely to activities by former owners, officers, management or employees.

B. Valley Forge Barrington's Recommendations and Purchases of VFCH Securities for Advisory Clients

Between January 1994 and July 1996, Valley Forge Barrington clients purchased $2.2 million in securities of three VFCH offerings referred to as the First Offering, the Second Offering and the Third Offering.3 Frederick A. Wolf ("Wolf"), Valley Forge Barrington's president, was responsible for all of these purchases, either by recommending VFCH to Valley Forge Barrington clients or by using his discretionary trading authority in certain client accounts to effectuate the purchases. Wolf is no longer employed by Barrington.

Beginning in March 1994, Wolf used his discretionary authority to purchase $1.2 million of VFCH securities for four Valley Forge Barrington clients even though such high-risk investments were contrary to its clients' stated investment objectives. Wolf acted either contrary to his clients' stated investment objectives or without disclosing the high-risk nature of the investments or facts indicating possible operational problems and possible misuse of offering proceeds by VFCH.

Wolf was aware that the offering memoranda for the VFCH offerings disclosed that VFCH was in a start-up phase and that the securities being offered were high-risk and speculative.

Between March 1994 and early 1995,4 Wolf became aware of facts that should have caused him to question seriously the integrity of VFCH management and its representations about how it would use the proceeds from its securities offerings, including: (i) threats made by Mamie Tang, founder and Senior Vice-President of VFCH and Deborah Mello, President of VFCH, relating to the sale of Continental Capital Financial Group securities to Valley Forge Barrington advisory clients5, (ii) an investment in CCFG, effected by Broad Street Securities, a broker-dealer controlled by Tang, on behalf of a Valley Forge Barrington client without the client's or Wolf's knowledge or consent, (iii) knowledge by Valley Forge Barrington and Wolf by the end of 1994, that Tang was the subject of a Commission enforcement action for alleged misrepresentations in connection with her sale of the CCFG securities, including misrepresentations as to how CCFG would use the proceeds of its offerings, (iv) knowledge in March 1995, that VFCH had not acquired any financial service provider other than Valley Forge Barrington (for a cash price of $155,000), and that VFCH's December 31, 1994 audited financial statements reported that it had raised $1.8 million through the sale of debt securities and reported a cash balance of $31,000, and (v) the belief that Tang always controlled VFCH.

C. "Lulling" Payments to Valley Forge Barrington Clients

Between September 1993 and July 1994, seven of Valley Forge Barrington's advisory clients purchased a total of $250,000 in securities of Tang's former venture, CCFG.

Wolf believed that CCFG ceased making interest payments in July 1994. By November 1994 Wolf believed that CCFG was near bankruptcy and was concerned that he would lose at least one of his clients. As a result, near the end of 1994 Wolf recommended to a consultant to VFCH, who was also an officer and promoter of CCFG, that the consultant make the interest payments to certain Valley Forge Barrington clients purportedly on behalf of CCFG.

Two sets of lulling payments, totaling $5,000 each, were made in January 1995 and again in July 1995. At the time of these payments, Wolf concealed from his clients the fact that CCFG was not the source of the payments.

D. Collection of Advisory Fees Based on the Improper Overvaluation of Securities

From November 1994 and July 1996, Valley Forge Barrington charged and collected from two clients advisory fees purportedly based on a percentage of the fair market value of client assets. Assets on which fees were charged, however, included the improperly overvalued CCFG securities. The amount of advisory fees overcharged was approximately $1,000.

Valley Forge Barrington's failure to properly value the CCFG securities served to deceive the firm's clients as to the strength of their CCFG investments.

E. Failure to Disclose That Proceeds of VFCH Securities Sales Would Be Used To Pay Off a Prior Investor

In the first half of 1995, one of Valley Forge Barrington's advisory clients demanded that Valley Forge Barrington and Wolf refund her investments in three bonds from VFCH's First and Second Offerings totaling $115,000. To repay this investor, Wolf arranged for the sale of $115,000 of securities from VFCH's First and Second Offerings to two other advisory clients in July 1995. Wolf failed to disclose to these subsequent investors that their investment proceeds would be used to pay off a prior disgruntled investor.

Based on the foregoing, the Commission finds that: Barrington willfully violated Sections 206(1) and 206(2) of the Advisers Act in that it employed devices, schemes, or artifices to defraud any client or prospective client and engaged in transactions, practices, or courses of business which operated as a fraud or deceit upon clients or prospective clients.


Based upon the foregoing, the Commission deems it appropriate and in the public interest to impose the sanctions specified in Barrington's Offer:

Accordingly, it is hereby ordered that:

A. Pursuant to Section 203(k) of the Advisers Act, effective immediately Barrington shall cease and desist from committing or causing any violations of, and any future violations of, Sections 206(1) and (2) of the Advisers Act.

B. Barrington is hereby censured;

C. Barrington shall, within sixty (60) days after entry of this order, pay a civil money penalty of $45,000 to the United States Treasury. Such payment shall be: (1) made by United States postal money order, certified check, bank cashier's check or bank money order; (2) made payable to the Securities and Exchange Commission; (3) hand delivered or mailed to the Comptroller, Securities and Exchange Commission, Operations Center, 6432 General Green Way, Stop 0-3, Alexandria, VA 22312 and (4) submitted under cover letter that identifies Barrington as a respondent in this proceeding, the file number of the proceeding, a copy of which cover letter and money order or check shall be sent to District Administrator, Securities and Exchange Commission, 44 Montgomery Street, Suite 1100, San Francisco, CA 94104.

By the Commission.

Jonathan G. Katz


1 The proceeding was instituted on September 28, 1998.
2 The findings herein are made pursuant to Respondent's Offer and are not binding on anyone other than Respondent Barrington.
3 VFCH raised a total of $4.2 million through the three offerings. Of the $2.2 million sold by Valley Forge Barrington, only $64,000 was sold before March 1994.
4 In his role as a director of VFCH in l996, Wolf became aware of additional facts that should have caused him to question the integrity of VFCH management and its representations about how it would use the proceeds from its securities offerings.
5 Continental Capital Financial Group ("CCFG") was a Nevada corporation located in San Francisco, California. CCFG, Tang, a co-owner of CCFG, and the other co-owner, John Hickey, were permanently enjoined by the U.S. District Court for the Northern District of California in February 1995 in connection with the fraudulent offer and sale of real estate limited partnership units. In that action, the Commission alleged that Tang and Hickey personally misappropriated millions of the offering proceeds. Securities and Exchange Commission v. John A. Hickey, Mamie Tang, and Continental Capital Financial Group, Inc., Civil Action No. C94-3336 FMS (N.D. Cal., February 1995). Tang and Hickey were indicted in July 1997 for their conduct in connection with the sale of CCFG securities. The criminal case against them is pending. None of the current owners, officers, management or employees of Barrington was involved in the Commission action against CCFG or the criminal prosecution against Tang and Hickey.