U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC
LITIGATION RELEASE NO. 15725 / April 29, 1998
SECURITIES AND EXCHANGE COMMISSION v. JOHN GARDNER BLACK, DEVON
CAPITAL MANAGEMENT, INC., AND FINANCIAL MANAGEMENT SCIENCES, INC.,
Civil Action No. 97-2257 (W.D.Pa.).
The Securities and Exchange Commission announced that, on April 29,
1998, the Honorable Donetta W. Ambrose of the United States District
Court for the Western District of Pennsylvania entered an Order of
Disgorgement and Civil Penalties ("Order") against defendant John
Gardner Black ("Black"). The Order requires Black to disgorge
$3,632,031, together with prejudgment interest in the amount of
$326,883, and to pay a civil penalty in the amount of $500,000. Black
consented to the entry of the Order without admitting or denying the
allegations of the Commission's Complaint.
The Commission's Complaint alleged that Black, acting through
defendants Devon Capital Management, Inc. ("Devon"), a registered
investment adviser, and Financial Management Sciences, Inc. ("FMS"), a
corporate affiliate of Devon's, both owned by Black, made
misrepresentations and omissions of material fact in connection with
the solicitation and management of Devon's investment advisory
clients' funds, resulting in the loss of millions of dollars of
municipal bond proceeds invested by school districts and other local
government units throughout Western and Central Pennsylvania. The
Complaint alleged that Black, Devon and FMS benefited financially from
their actions.
The Commission filed this action as an emergency matter on September
26, 1997. On the same date, the Court granted the Commission's
requested relief, including a temporary restraining order, freeze of
assets and an order appointing the Honorable Richard L. Thornburgh,
former Attorney General of the United States and Governor of
Pennsylvania, as Trustee.
On December 12, 1997, Black, Devon and FMS, pursuant to their consent,
were permanently enjoined from future violations of the antifraud
provisions of the Securities Act of 1933, Securities Exchange Act of
1934, and the Investment Advisers Act of 1940, as charged in the
Complaint.
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Modified 04/29/1998
SNIPPETS:
SECURITIES AND EXCHANGE COMMISSION v. JOHN GARDNER BLACK, DEVON
CAPITAL MANAGEMENT, INC., AND FINANCIAL MANAGEMENT SCIENCES, INC.,
The Securities and Exchange Commission announced that, on April 29, 1998, the Honorable
The Order requires Black to disgorge $3,632,031, together with prejudgment interest in the
Black consented to the entry of the Order without admitting or denying the allegations of the
The Commission's Complaint alleged that Black, acting through defendants Devon Capital
ther local government units throughout Western and Central Pennsylvania.
Devon and FMS benefited financially from their actions.
On the same date, the Court granted the Commission's requested relief, including a temporary
On December 12, 1997, Black, Devon and FMS, pursuant to their consent, were permanently
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