UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION

Securities Exchange Act of 1934
Release No.48793 / November 17, 2003

Administrative Proceedings
File No. 3-11338

I.

The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest to institute public administrative proceedings pursuant to Section 15(b) of the Securities Exchange Act of 1934 ("Exchange Act") against James H. Malbaff ("Malbaff"), and such proceedings are hereby instituted.

II.

In anticipation of the institution of these proceedings, Malbaff has submitted an Offer of Settlement ("Offer") that 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 findings contained herein, except for those contained in Sections III.1 and III.2., which are admitted, Malbaff consents to the issuance of this Order Instituting Proceedings, Making Findings and Imposing Remedial Sanctions Pursuant to Section 15(b) of the Securities Exchange Act of 1934 (the "Order"), the entry of the findings contained herein, and the imposition of the sanction set forth below.

III.

On the basis of this Order and Malbaff's Offer, the Commission finds the following:

1. Malbaff, age 61 and a resident of Centreville, Virginia, has never held a securities license but was associated with an unregistered broker-dealer during the relevant time.
    
2. Malbaff is permanently enjoined by judgment of the United States District Court for the Western District of Virginia, in the action styled Securities and Exchange Commission v. Foglesong, et al., Civil Action No. 5:01CV00104 (W.D. Va., judgment entered on October 28, 2003), from violating Section 17(a) of the Securities Act of 1933 ("Securities Act") and Sections 10(b) and 15(a) of the Exchange Act and Rule 10b-5 thereunder.
    
3. With respect to Malbaff, the Commission's Complaint in SEC v. Foglesong alleged as follows: From at least early 1997 to June 1998, Malbaff engaged in several "high yield" investment schemes that raised at least $825,000 from over 30 investors. In the schemes, Malbaff told investors that their funds would be pooled and used for the trading of bank instruments such as medium-term notes, and that this trading would generate extraordinary profits ranging as high as 1,300%. Malbaff misrepresented, and omitted material facts regarding, the use of investor funds, the safety of those funds, his own due diligence regarding the investment programs, the expected returns on the investments, and his track record relating to the programs. Ultimately, Malbaff transferred the bulk of the money he raised to remote third party operators who were supposed to run the programs, but who, instead, misappropriated the money invested with them. By engaging in this activity, Malbaff committed securities fraud in violation of Section 17(a) of the Securities Act, Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, and acted as an unregistered broker-dealer in violation of Section 15(a) of the Exchange Act.

IV.

In view of the foregoing, the Commission deems it appropriate and in the public interest to accept the Offer submitted by Malbaff and impose the sanctions that are consented to in that Offer.

ACCORDINGLY, IT IS HEREBY ORDERED that Malbaff be, and hereby is, barred from association with any broker or dealer pursuant to Section 15(b) of the Exchange Act.

Any reapplication for association by Malbaff will be subject to the applicable laws and regulations governing the reentry process, and reentry may be conditioned upon a number of factors, including, but not limited to, the satisfaction of any or all of the following: (a) any disgorgement ordered against Malbaff, whether or not the Commission has fully or partially waived payment of such disgorgement; (b) any arbitration award related to the conduct that served as the basis for the Commission order; (c) any self-regulatory organization arbitration award to a customer, whether or not related to the conduct that served as the basis for the Commission order; and (d) any restitution order by a self-regulatory organization, whether or not related to the conduct that served as the basis for the Commission order.

By the Commission.

http://www.sec.gov/litigation/admin/34-48793.htm