Scott B. Kaye

INVESTMENT ADVISERS ACT OF 1940
Release No. 2359 / February 10, 2005

Admin. Proc. File No. 3-11819

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 203(f) of the Investment Advisers Act of 1940 ("Advisers Act") against Scott B. Kaye ("Kaye" or "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 Sections III.2 below, which are admitted, Respondent consents to the entry of this Order Instituting Administrative Proceedings Pursuant to 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:

1. From June 2002 through February 2003, Respondent acted as an investment adviser as defined by Section 202(a)(11) of the Investment Advisers Act [15 U.S.C. § 80b-2(a)(11)]. Respondent was also the sole owner and managing member of Truehedge Capital Partners, LP, and TrueHedge Advisors, LLC. Respondent, 40 years old, is a resident of Sedgwick County, Kansas.

2. On February 3, 2005, a final judgment was entered by consent against Respondent, permanently enjoining him from future violations of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and further permanently enjoining him from violations of Sections 206(1) and 206(2) of the Advisers Act, in the civil action entitled Securities and Exchange Commission v. Scott B. Kaye, et al., Civil Action Number 04-CV-1275 MLB, in the United States District Court for the District of Kansas, Wichita Division.

3. The Commission's complaint alleged that, in connection with the purchase, and the offer and sale to investors, Respondent and TrueHedge Advisors raised $1.95 million for TrueHedge Capital from 18 investors, through a private placement of securities in the form of limited partnership interests. The Complaint further alleged that, contrary to claims in a private placement memorandum describing that investor funds would be used to invest in stocks and options, Respondent misappropriated funds for his own personal use.

IV.

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

ACCORDINGLY, IT IS HEREBY ORDERED:

Pursuant to Section 203(f) of the Advisers Act, that Respondent Kaye be, and hereby is barred from association with any investment adviser.

Any reapplication for association by the Respondent 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 the Respondent, 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.

By the Commission.