UNITED STATES OF AMERICA Before the SECURITIES AND EXCHANGE COMMISSION SECURITIES EXCHANGE ACT OF 1934 RELEASE NO. 40093 / June 15, 1998 ADMINISTRATIVE PROCEEDING FILE NO. 3-9626 ______________________________ : ORDER INSTITUTING PROCEEDINGS, In the Matter of : MAKING FINDINGS AND IMPOSING : REMEDIAL SANCTIONS PURSUANT TO TED E. MONG, : SECTIONS 15(b) and 19(h) OF THE : SECURITIES EXCHANGE ACT OF 1934 Respondent. : : _____________________________ : I. The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest that public administrative proceedings be instituted against Ted E. Mong ("Mong") pursuant to Sections 15(b) and 19(h) of the Securities Exchange Act of 1934 ("Exchange Act"). II. In anticipation of the institution of these proceedings, Mong has submitted an Offer of Settlement ("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 Commission's findings contained herein, except the Commission's finding set forth in Paragraph III A and B, which is admitted, Mong consents to the entry of this Order Instituting Proceedings, Making Findings and Imposing Remedial Sanctions pursuant to Sections 15(b) and 19(h) of the Exchange Act ("Order"). Accordingly, IT IS HEREBY ORDERED that proceedings pursuant to Sections 15(b) and 19(h) of the Exchange Act be and hereby are instituted. ======END OF PAGE 1====== III. On the basis of this Order and Mong's Offer, the Commission finds that: A. From at least November 1993 to until June 1995 (hereinafter "the relevant time period"), Mong was not registered as a broker or dealer with the Commission pursuant to the Exchange Act. At all relevant times, Mong used McKenzie Matthew, Inc. ("McKenzie Matthew") and Liberty Bell Association, Inc. ("Liberty Bell") to effect transactions in, or induce or attempt to induce the purchase or sale of, certain securities, at a time when Mong was not registered with the Commission as a broker or dealer. B. On June 1, 1998, in the case of SEC v. Ted E. Mong, et al., (Civil Action File No. C2-96-989), the United States District Court for the Southern District of Ohio, entered an Order of Permanent Injunction and Other Equitable Relief against Mong, pursuant to his consent and without admitting or denying the allegations contained in the Commission's Complaint, enjoining Mong from violating Section 17(a) of the Securities Act of 1933, Sections 10(b), 15(a) and 15(c) of the Exchange Act and Rules 10b-5 and 15c1-2 promulgated thereunder. The Complaint was based on the conduct described below. C. The Complaint alleged that Mong defrauded investors in the offer and sale of over $650,000 of securities in McKenzie Matthew and Liberty Bell. Investors were told that their funds would be pooled with other investors' funds in an escrow account and loaned to qualifying companies meeting certain criteria. In addition, Mong represented that investor funds would be backed by U.S. government bonds, securities and real estate equity, and would be secured by surety bonds. Instead, the Complaint alleged that Mong loaned investor funds to businesses which did not meet the stated criteria and Mong failed to provide any surety bond or other assets securing investor funds. In addition, the Complaint alleged that Mong used funds to operate a Ponzi scheme and to pay operating expenses. The Complaint further alleged that Mong made misrepresentations to investors regarding the use of proceeds, the rate of return, and the risk of the investment. Finally, the Complaint alleged that Mong transacted business as a broker or dealer without registering as such with the Commission and, therefore, perpetrated a fraud on his customers. IV. In light of the foregoing, it is in the public interest to impose the sanctions specified in the Offer submitted by Mong. Accordingly, IT IS HEREBY ORDERED that Ted E. Mong be, and hereby is, barred from association with any broker, dealer, municipal securities dealer, investment company or investment adviser. By the Commission. ======END OF PAGE 2====== Jonathan G. Katz Secretary ======END OF PAGE 3====== SERVICE LIST Rule 141 of the Commission's Rules of Practice (Practice Rules) (17 C.F.R. Section 201.141) provides that the Secretary, or another duly authorized officer of the Commission, shall serve a copy of the Order Instituting Proceedings, Making Findings and Imposing Remedial Sanctions Pursuant to Sections 15(b) and 19(h) of the Securities Exchange Act of 1934 on each person named as a party in the order and their legal agent. The attached Order Instituting Proceedings, Making Findings and Imposing Remedial Sanctions Pursuant to Sections 15(b) and 19(h) of the Securities Exchange Act of 1934 has been sent to the following Parties: Honorable Brenda P. Murray Chief Administrative Law Judge Securities and Exchange Commission 450 5th Street, N.W., Mail Stop 11-6 Washington, D.C. 20549 Jeannette L. Lewis Assistant Regional Director Securities and Exchange Commission Midwest Regional Office Northwestern Atrium Center 500 W. Madison Street, Suite 1400 Chicago, Illinois 60661-2511 John Markle Division of Enforcement 450 Fifth Street, N.W. Mail Stop 8-9 Washington, D.C. 20549 Ted E. Mong Inmate Number 360388 Lorain Correctional Institute 2075 South Avon-Belden Road Grafton, Ohio 44044 ======END OF PAGE 4====== Via Certified Mail Return Receipt Requested Ted E. Mong 5717 Karl Road Columbus, Ohio 43229 Re: Ted E. Mong Dear Mr. Mong: Please find enclosed an Order Instituting Proceedings, Making Findings and Imposing Remedial Sanctions pursuant to Sections 15(b) and 19(h) of the Securities Exchange Act of 1934 (Exchange Act) entered against you in the above-captioned matter. The findings and remedial sanctions imposed are in accordance with your offer of settlement, dated ___________, 1998, submitted to the Commission in anticipation of these proceedings. The Commission has determined to accept your offer of settlement and accordingly has issued the enclosed order. Please note that the sanction imposed by the order takes effect immediately. If you have any questions or wish to discuss any aspect of the proceedings, you may contact Jeannette L. Lewis at the Midwest Regional Office, 500 W. Madison Street, Suite 1400, Chicago, Illinois 60661, (312) 353-7410. Sincerely, Jonathan G. Katz Secretary Enclosure ======END OF PAGE 5======