UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION

SECURITIES EXCHANGE ACT OF 1934

Release No. 39943 / May 1, 1998

ADMINISTRATIVE PROCEEDING

File No. 3-9357

I.

On August 11, 1997, the Securities and Exchange Commission (Commission) deemed it appropriate and in the public interest to institute public administrative proceedings pursuant to Sections 15(b) and 19(h) of the Securities Exchange of Act of 1934 (Exchange Act) against H. Beck, Inc. (H. Beck) and Gary S. Hurvitz (Hurvitz)(collectively, Respondents).

In response to the institution of these administrative proceedings, H. Beck and Hurvitz have submitted an offer of settlement (Offer) which the Commission has determined to accept. Solely for the purpose of these proceedings and any other proceeding brought by or on behalf of the Commission or to which the Commission is a party and without admitting or denying the findings contained herein except as to jurisdiction and those findings set forth in Sections II.a, II.c.i and II.d.ii below, which are admitted, Respondents, by their Offer, consent to the entry of this Order Making Findings and Imposing Remedial Sanctions (Order).

II.

On the basis of this Order and Respondents' Offer, the Commission makes the following findings: ¹

a. H. Beck, Inc. ("H. Beck") is registered with the Commission as a broker-dealer pursuant to Section 15(b) of the Securities Exchange Act of 1934 ("Exchange Act") and was so registered at all relevant times.

b. H. Beck's principal place of business is Rockville, Maryland. Approximately two hundred and eighty-five registered representatives are currently associated with H. Beck. At all relevant times, more than 200 of the registered representatives associated with H. Beck were located in independently owned and operated offices in various states across the country.

c. Gary S. Hurvitz ("Hurvitz") is 46 years old and resides in Bethesda, Maryland.

i. Hurvitz has been the President, Chief Executive Officer, Chief Operating Officer, Chief Legal Officer, Chief Compliance Officer and an owner and director of H. Beck since 1986.

ii. He was H. Beck's only Compliance Officer from at least September 1, 1989 until 1994. Hurvitz is also a registered principal of the firm and an attorney.

d. Joseph P. Medsker ("Medsker") is 53 years old and resides in Dayton, Ohio.

i. Medsker has been a registered representative since 1975.

ii. Medsker has been associated with H. Beck since September 1, 1989.

iii. Medsker owned and operated a one-person office for H. Beck in Dayton, Ohio out of which he provided investment advice, brokerage, insurance and other financial services, all under the name "Unified Financial Services."

e. Unified Financial Services Associates I ("Associates I") is an Ohio investment partnership formed by Medsker in 1990 primarily to invest in a speculative real estate syndication owned and controlled in part by Medsker. Medsker is the managing general partner of Associates I.

f. Unified Financial Golf Associates I ("Golf I") is an Ohio investment partnership formed by Medsker in 1991 to invest in the same speculative real estate syndication as Associates I. Medsker is also the managing general partner of Golf I.

g. From in or about May 1990 through at least November 1994, Medsker and two other entities which he owned and controlled engaged in a scheme to defraud H. Beck customers in violation of Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933 (Securities Act), Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder and Sections 203(a), 206(1), 206(2) and 206(4) of the Investment Advisers Act of 1940 (Advisers Act) and Rule 206(4)-4 thereunder. In furtherance of that scheme, from May 1990 through at least August 1992, Medsker offered and sold more than $2.2 million in unregistered partnership interests in Associates I and Golf I to more than 200 investors. He also misrepresented and omitted to state material facts in connection with the offer and sale of those partnership interests regarding the safety, risks and returns associated with an investment therein. From May 1990 through at least November 1994, he churned a trading account that he had opened with H. Beck for Associates I with part of the proceeds from the Associates I offering. Also through at least November 1994, Medsker attempted to cover up the scheme by sending false and misleading statements and updates to investors misrepresenting and omitting to state material facts regarding, among other things, the value of their investments in Associates I and the future prospects for success of Golf I given the serious financial difficulties suffered by the speculative real estate syndication in which those partnerships had invested.

h. On May 18, 1993, Medsker and four other individuals were censured and fined $7500, jointly and severally, by the National Association of Securities Dealers ("NASD") in connection with a real estate syndication offered by an entity in which Medsker owned a controlling interest. Medsker, among others, failed to promptly refund the proceeds of the offering to investors under the terms of the offering memorandum and used the funds of certain partnerships for the benefit of other partnerships without disclosing the same to investors ("NASD Sanction").

i. On July 20, 1993, H. Beck and Hurvitz were informed of the NASD Sanction.

j. From in or about May 1990 through at least November 1994, H. Beck and Hurvitz failed reasonably to supervise Medsker with a view to preventing the violations described in paragraph II.g above. Their supervision was deficient in that they failed to establish and implement a system reasonably designed to monitor Medsker's compliance with H. Beck's compliance procedures and the federal securities laws in order to prevent and detect his violations. H. Beck's compliance system, designed by Hurvitz, did not require any inspections of its one-person independently owned and operated offices, including Medsker's. Medsker's office was not inspected by anyone from H. Beck during the period of May 1990 through November 1994.

k. From in or about May 1990 through at least November 1994, H. Beck and Hurvitz also failed reasonably to supervise Medsker with a view to preventing the violations described in paragraph II.g in that Hurvitz failed to adequately monitor Medsker's day-to-day activities with a view to preventing and detecting his violations or effectively delegate that supervisory responsibility to another person in the firm. In addition, they:

i. Failed to take adequate action to determine the nature of the Associates I trading account after receiving notice of irregularities associated therewith;

ii. Failed to take adequate action upon receiving notice of indications of churning of the Associates I trading account; and

iii. Failed to take adequate action upon receiving notice of the NASD Sanction;

l. As a result of the activities of H. Beck and Hurvitz described in paragraphs II.j and II.k above, Medsker was able to continue his scheme through at least November 1994.

m. Based on the foregoing, H. Beck and Hurvitz failed reasonably to supervise Medsker with a view to preventing his violations described in paragraph II.g, within the meaning of Section 15(b)(4)(E) of the Exchange Act.

III.

In view of the foregoing, it is in the public interest to impose the sanctions specified in the Offer:

ACCORDINGLY, IT IS HEREBY ORDERED:

a. That Hurvitz be suspended from association with any broker or dealer for a period of one month, effective on the second Monday following the entry of this Order;

b. That Hurvitz be suspended from association in a supervisory and proprietary capacity with any broker or dealer for a period of six months, effective on the second Monday following the entry of this Order;

c. That H. Beck be censured;

d. That H. Beck shall, prior to the close of business on the tenth business day following the issuance of this Order, pay a civil penalty pursuant to Section 21B of the Exchange Act to the United States Treasury in the amount of $20,000. The payment shall be: (a) made by certified check, bank cashier's check, bank money order or United States postal order; (b) made payable to the Securities and Exchange Commission; (c) mailed or delivered to the Comptroller, Securities and Exchange Commission, 450 5th Street, N.W., Washington, D.C. 20549; and (d) submitted under cover letter which identifies H. Beck as one of the Respondents in these proceedings, and the Commission's file number in these proceedings. A copy of the cover letter and money order or check shall be sent to Mary Keefe, Regional Director, Midwest Regional Office, Securities and Exchange Commission, 500 West Madison Street, Chicago, Illinois 60661.

e. That H. Beck comply with the following undertakings:

i. H. Beck shall retain, within 60 days of the date of this Order, at its expense, an Independent Consultant not unacceptable to the Commission's staff. The Independent Consultant shall conduct a review of H. Beck's supervisory, compliance, and other policies and procedures designed to prevent and detect federal securities law violations of the nature involved in this matter. H. Beck shall cooperate fully with the Consultant and shall provide the Consultant with access to its files, books, records, and personnel as reasonably requested for the review.

ii. At the conclusion of that review, which in no event shall be more than 180 days after the date of this Order, the Consultant shall submit to H. Beck and to the Commission an Initial Report. The Initial Report shall address the adequacy of H. Beck's policies and procedures to detect and prevent federal securities law violations of the nature involved in this matter, and shall include the Consultant's recommendations thereon.

iii. Within 210 days of the date of this order, H. Beck shall in writing advise the Consultant and the Commission of the recommendations from the Initial Report that it has determined to accept and the recommendations that it considers to be unduly burdensome. With respect to any recommendation that H. Beck deems unduly burdensome, H. Beck may propose an alternative policy or procedure designed to achieve the same objective or purpose.

iv. With respect to any recommendation or proposal with which H. Beck and the Consultant do not agree, H. Beck and the Consultant shall attempt in good faith to reach agreement. In the event the Consultant and H. Beck are unable to agree on an alternative proposal, H. Beck shall abide by the recommendation of the Consultant.

v. Within 270 days of the date of this Order, H. Beck shall in writing advise the Consultant and the Commission of the recommendations and proposals that it is adopting.

vi. The Consultant shall complete the aforementioned review and submit a written Final Report thereon to H. Beck and to the Commission's staff within one year after the date of this Order. The Final Report shall recite the efforts the Consultant undertook to review H. Beck's supervisory functions, compliance mechanisms, and other policies and procedures, set forth the Consultant's recommendations and H. Beck's proposals, and describe how H. Beck is implementing those recommendations and proposals.

vii. H. Beck shall take all necessary and appropriate steps to adopt and implement all recommendations contained in the Consultant's Final Report.

viii. No later than one year after the date of the Consultant's Final Report, unless extended pursuant to paragraph ix below, H. Beck shall submit to the Commission's staff an Affidavit setting forth the details of its efforts to implement the recommendations contained in the Consultant's Final Report and stating whether it has achieved compliance.

ix. For good cause shown, and upon receipt of a timely application from the Consultant or H. Beck, the Commission's staff may extend any of the procedural dates set forth above.

x. To ensure the independence of the Consultant, H. Beck: (1) shall not have the authority to terminate the Consultant, without the prior written approval of the staff of the Division of Enforcement; (2) shall compensate the Consultant, and persons engaged to assist the Consultant, for services rendered pursuant to the Order at their reasonable and customary rates; (3) shall not, without prior written consent of the staff of the Division of Enforcement, enter into any legal, business, or other financial relationship with the Consultant, any firm with which he or she is affiliated or of which he or she is a member, or any person engaged to assist the Consultant in the performance of his or her duties under the Order, during the period of their engagements and for a period of two years following the completion of their duties described in the Order; and (4) shall not be in and shall not have an attorney-client relationship with the Consultant and shall not seek to invoke the attorney-client or

any other doctrine or privilege to prevent the Consultant from transmitting any information, reports, or documents to the Commission or its staff.

By the Commission,

Jonathan G. Katz

Secretary

FOOTNOTES

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