Stephen F. Clifford d/b/a Clifford Financial Assocs.

U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 21762 / December 6, 2010

Court Enters Final Judgment Against Former Massachusetts Investment Adviser

SEC v. Stephen F. Clifford d/b/a Clifford Financial Assocs., No. 08-CV-11023-RGS (D. Mass.).

The Commission announced today that, on December 3, 2010, the United States District Court for the District of Massachusetts entered a final judgment by consent against Stephen F. Clifford, formerly an investment adviser based in Plymouth, Massachusetts. Without admitting or denying the allegations in the Commission's complaint, Clifford agreed to the entry of a final judgment 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 Sections 206(1) and 206(2) of the Investment Advisers Act of 1940.

The Commission filed its action against Clifford on June 17, 2008. The Commission's complaint alleged that, between at least July 2004 and June 2008, while acting as an investment adviser, Clifford defrauded nearly a dozen investors of nearly $3 million and misappropriated investor funds for his personal use. On December 16, 2009, the United States Attorney's Office for the District of Massachusetts filed a criminal action against Clifford, making substantially similar charges.

On May 4, 2010, Clifford pled guilty to one count of willfully violating Sections 206 and 217 of the Advisers Act, one count of wire fraud, one count of mail fraud, and three counts of subscribing to false tax returns. On October 26, 2010, Clifford was sentenced to serve more than eight years in federal prison, followed by three years of supervised release, and to pay restitution of over $4.5 million. Clifford's federal prison term will run consecutively to a state prison term he is currently serving for a separate offense.

On June 2, 2010, based on his guilty plea in the federal criminal action, the Commission instituted and simultaneously settled public administrative proceedings against Clifford and barred him from association with any broker, dealer, or investment adviser.

The Commission acknowledges the assistance of the Massachusetts Securities Division, the United States Postal Inspection Service, and the United States Attorney's Office for the District of Massachusetts.

For more information, see Litigation Release Nos. 20622 (June 18, 2008), 21343 (December 18, 2009), 21518 (May 6, 2010), and 21711 (October 27, 2010), and Exchange Act Release No. 62208 (June 2, 2010).