UNITED STATES OF AMERICA
SECURITIES AND EXCHANGE COMMISSION
Investment Advisers Act of 1940
Release No. 2313 / October 13, 2004
Admin. Proc. File No. 3-11708
SEC INSTITUTES ADMINISTRATIVE PROCEEDING AGAINST BARRY J. GOODMAN BASED ON ENTRY OF INJUNCTION AND FINDING OF LIABILITY
On October 13, 2004, the Commission issued an Order Instituting Administrative Proceedings and Notice of Hearing pursuant to Section 203(f) of the Investment Advisers Act of 1940 (Advisers Act) against Barry J. Goodman, a resident of North Andover, Massachusetts, based on a final judgment and injunction entered against him in SEC v. Goodman, et al., Civil Action No. 01-CV-10163 (the Civil Action). The Division of Enforcement's complaint in the Civil Action alleged that Goodman, doing business as New England Capital Advisors, LLC (New England Capital), obtained at least $800,000 through two fraudulent investment schemes. Beginning in February 2000, Goodman represented that investors could invest in a special pool of funds, which he would use to purchase stock in IPOs underwritten by five investment banks in a specified period. Goodman obtained additional investor funds by falsely representing that the investment would be used in a "special" arbitrage program buying stock in Lycos, Inc. Goodman, however, did not use any of the investor funds to make the advertised investments, but rather converted most of the money for his personal benefit.
On September 29, 2004, the District Court for the District of Massachusetts entered a final judgment of against Goodman finding that he violated Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, and Sections 206(1) and 206(2) of the Advisers Act and imposing a $220,000 civil penalty. The court had previously entered an order permanently enjoining Goodman from violating those provisions.
A hearing will be scheduled before an administrative law judge to determine whether the allegations contained in the Order are true, to provide Goodman an opportunity to dispute these allegations and to determine what remedial sanction, if any is appropriate and in the public interest.
The Order requires that the administrative law judge shall issue an initial decision no later than 210 days from the date of service of the Order, pursuant to Rule 360(a)(2) of the Commission's Rules of Practice.
By the Commission.
Jonathan G. Katz
See also the Order in this matter