UNITED STATES OF AMERICA Before the SECURITIES AND EXCHANGE COMMISSION Securities Exchange Act of 1934 Release No. 38814 / July 3, 1997 Securities Investor Protection Act of 1970 Release No. 164 / July 3, 1997 ADMINISTRATIVE PROCEEDING File No. 3-9224 In the Matter of BRIAN J. MCCAHERY ORDER MAKING FINDINGS AND IMPOSING REMEDIAL SANCTIONS I. In connection with public administrative proceedings instituted against Brian J. McCahery ("McCahery") pursuant to Sections 15(b) and 19(h) of the Securities Exchange Act of 1934 ("Exchange Act") and Section 14(b) of the Securities Investor Protection Act of 1970 ("SIPA"),<(1)> McCahery has submitted an Offer of Settlement ("Offer") which the Securities and Exchange Commission ("Commission") has determined is in the public interest to accept. Solely for the purpose of these proceedings and any other proceeding brought by or on behalf of the Commission or in which the Commission is a party, McCahery, by his Offer, consents to the entry of this Order Making Findings and Imposing Remedial Sanctions ("Order"). II. On the basis of this Offer, the Commission finds<(2)>that: 1. U.S. Equity Management Corp. ("U.S. Equity Management") was registered with the Commission as a broker-dealer, pursuant to Section 15(b) of the Exchange Act, from September 14, 1993 to November 9, 1994; 2. From approximately August 1993 through May 1995, McCahery possessed, indirectly or directly, the power to direct, and cause the direction of, the management, policies and daily operations of U.S. Equity <(1)> The Order Instituting Proceedings was issued on January 16, 1997. See Exch. Act. Rel. No. 38176. <(2)> Any findings contained herein are made pursuant to McCahery's Offer of Settlement and are not binding on any other person or entity named as a respondent in this or any other proceeding. Management, which, prior to its cessation of operations, held special rights to trade a proprietary account on the American Stock Exchange; 3. From approximately August 1993 through May 1995, McCahery misappropriated approximately $3 million in U.S. Equity Management's customers' funds and, as such, failed to act in a responsible manner to avoid the financial collapse of U.S. Equity Management; 4. On September 22, 1995, the Honorable Shira A. Scheindlin, United States District Court Judge, entered an Order<(3)>on consent which, inter alia, appointed a trustee for the liquidation of the business of U.S. Equity Management and removed the liquidation proceeding to the Bankruptcy Court pursuant to SIPA; and 5. On December 21, 1995, McCahery pled guilty to a one count Information charging him with wire fraud arising from his misappropriation of customer funds through U.S. Equity Management<(4)>and, on May 3, 1996, McCahery was sentenced to three years in prison and ordered to pay restitution. III. In view of the foregoing, the Commission finds that it is in the public interest to impose the sanctions specified in the Offer of Settlement. Accordingly, IT IS ORDERED that McCahery be barred from association with any broker, dealer, investment company, investment adviser or municipal securities dealer, effective immediately. For the Commission, by its Secretary, pursuant to delegated authority. Jonathan G. Katz Secretary <(3)> Securities Investor Protection Corporation v. U.S. Equity Management Corp., 95 CIV 8019 (SAS) (September 22, 1995). <(4)> United States of America v. Brian J. McCahery, 95 CR. 1090 (JFK). ======END OF PAGE 2======