SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
INVESTMENT ADVISERS ACT OF 1940
Rel. No. 1774 / November 18, 1998
Admin. Proc. File No. 3-8854
__________________________________________________
:
In the Matter of :
:
VALICENTI ADVISORY SERVICES, INC. :
100 Baldwin Street :
Elmira, New York 14901 :
:
and :
:
VINCENT R. VALICENTI :
__________________________________________________:
OPINION OF THE COMMISSION
INVESTMENT ADVISER PROCEEDINGS
Ground for Remedial Action
Fraudulent Sales Literature
Registered investment adviser and its president distributed
two pieces of fraudulent sales literature to prospective
clients. Held, it is in the public interest to censure and
fine respondents, to issue a cease and desist order, and to
require respondents to send a copy of the Commission's
opinion and order to clients and, for one year, to
prospective clients.
APPEARANCES:
Michael R. Wolford and Steven E. Cole, of Wolford & Leclair
LLP, for Valicenti Advisory Services, Inc. and Vincent R.
Valicenti.
Carmen J. Lawrence, Henry Klehm III, Daniel J. Goldstein,
Samuel C. Watkins, Brian H. Fortune, and Daniel C. Feldman, for
the Division of Enforcement.
Appeal filed: July 30, 1997
Briefing completed: October 22, 1997
Oral argument: July 7, 1998
SNIPPETS:
SECURITIES AND EXCHANGE COMMISSION
OPINION OF THE COMMISSION
Ground for Remedial Action
two pieces of fraudulent sales literature to prospective
fine respondents, to issue a cease and desist order, and to
Michael R. Wolford and Steven E. Cole, of Wolford & Leclair LLP, for Valicenti Advisory
Carmen J. Lawrence, Henry Klehm III, Daniel J. Goldstein, Samuel C. Watkins, Brian H.
Valicenti Advisory Services, Inc. ("VAS" or "the firm"), a registered investment adviser, and
The law judge found that VAS willfully violated Sections 206and 206of the Investment Advisers
The Division contends that VAS and Valicenti acted with scienter in issuing four pieces of
Valicenti decided to prepare materials advertising VAS's past performance for distribution to
The law judge's findings of violation are based on the two pieces of sales literature that
The literature consisted of the chart and bar graph that are described below.
The 1991 Chart purported to show the rates of return realized by a "composite of
In 1987, VAS had approximately 74 balanced accounts meeting Valicenti's definition, in 1988
the evidence is more than sufficient to justify the conclusion that the results reported in
Valicenti"), a VAS portfolio manager, recalculated the rate of return for the accounts on the
Valicenti instructed Marchese to order data from CDA Investment Technologies, Inc. that
A copy of the cover letter and check shall be sent to Daniel J. Goldstein, counsel for the
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