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05/15/07 12:21 AM

#1116 RE: Stock #1115

34-55753 May 14, 2007 RS Investment Management, Inc., RS Investment Management, L.P, G. Randall Hecht and Steven M. Cohen
Note: See also Proposed Distribution Plan
Comments due: June 13, 2007
Submit comments on Proposed Distribution Plan
http://www.sec.gov/litigation/admin/2007/34-55753.htm

UNITED STATES OF AMERICA
before the
SECURITIES AND EXCHANGE COMMISSION
SECURITIES EXCHANGE ACT OF 1934
Release No. 55753 / May 14, 2007
ADMINISTRATIVE PROCEEDING
File No. 3-11696

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In the Matter of

RS Investment Management, Inc., RS Investment Management, L.P., G. Randall Hecht and Steven M. Cohen,

Respondents.

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:
:
:
:
:
:
:
: NOTICE OF PROPOSED DISTRIBUTION PLAN AND OPPORTUNITY FOR COMMENT

Notice is hereby given, pursuant to Rule 1103 of the Securities and Exchange Commission's ("Commission") Rules on Fair Fund and Disgorgement Plans, 17 C.F.R. § 201.1103, that the Division of Enforcement has submitted to the Commission a proposed plan for the distribution of the Fair Fund in this matter ("Distribution Plan").

On October 6, 2004, the Commission issued an Order instituting and simultaneously settling public administrative and cease-and-desist proceedings ("the Order") against respondents, including RS Investment Management, Inc., and RS Investment Management, L.P. (collectively "RS"), in this matter. In the Order, the Commission authorized and established a Fair Fund, comprised of $25 million in disgorgement and penalties paid by RS, for distribution to mutual fund investors affected by market timing in funds for which RS served as the investment adviser. The Order provided that the Fair Fund was to be distributed pursuant to a distribution plan developed by an Independent Distribution Consultant.

OPPORTUNITY FOR COMMENT
Pursuant to this Notice, all interested parties are advised that they may print a copy of the Distribution Plan from the Commission's public website, http://www.sec.gov/, or RS's public website, http://www.rsinvestments.com/. Interested parties may also obtain a written copy of the Distribution Plan by submitting a written request to Michael S. Dicke, Assistant Regional Administrator, United States Securities and Exchange Commission, 44 Montgomery Street, Suite 2600, San Francisco, CA 94104. All persons who desire to comment on the Distribution Plan may submit their comments, in writing, no later than June 13, 2007:

to the Office of the Secretary, United States Securities and Exchange Commission, 100 F Street, N.E., Washington, DC 20549-1090;

by using the Commission's Internet comment form (http://www.sec.gov/litigation/admin.shtml); or

by sending an e-mail to rule-comments@sec.gov. Comments submitted electronically should include "Administrative Proceeding File Number 3-11696" on the subject line.
Comments received will be publicly available. Persons should submit only information that they wish to make publicly available.

THE DISTRIBUTION PLAN
The Fair Fund is comprised of the $25 million paid by RS, plus accumulated interest. The Distribution Plan provides for distribution of the Fair Fund to eligible investors in ten mutual funds to compensate them for market timing during 2000-2003. If the Distribution Plan is approved, eligible investors will receive proportionate shares of the Fair Fund as calculated by the Independent Distribution Consultant. The shares will be calculated from information in RS's records and records obtained from third-party intermediaries. Investors will not need to go through a claims process.

For the Commission, by its Secretary, pursuant to delegated authority.

Nancy M. Morris
Secretary





http://www.sec.gov/litigation/admin/2007/34-55753.htm



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05/15/07 12:21 AM

#1117 RE: Stock #1115

34-55754 May 14, 2007 Marex.com, Inc., n/k/a Marex, Inc., Modern Computer Systems, Inc., Panther Telecommunications Corp., Royal Casket Distribution Corp., Schoolwurks, Inc., Skyway Communications Holding Corp., and South Beach Concepts, Inc., n/k/a Global Franchise Concepts, Inc.
http://www.sec.gov/litigation/admin/2007/34-55754.pdf

UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SECURITIES EXCHANGE ACT OF 1934
Release No. 55754/May 14, 2007
ADMINISTRATIVE PROCEEDING
File No. 3-12621
________________________________________________
In the Matter of :
:
MAREX.COM, INC., n/k/a MAREX, INC., : ORDER MAKING
MODERN COMPUTER SYSTEMS, INC., : FINDINGS AND
PANTHER TELECOMMUNICATIONS CORP., : REVOKING
ROYAL CASKET DISTRIBUTION CORP., : REGISTRATIONS
SCHOOLWURKS, INC., : BY DEFAULT
SKYWAY COMMUNICATIONS HOLDING CORP., :
and SOUTH BEACH CONCEPTS, INC., n/k/a :
GLOBAL FRANCHISE CONCEPTS, INC. :
________________________________________________
SUMMARY
This Order revokes the registrations of Respondents Marex.com, Inc., n/k/a Marex, Inc. (“MARX”),1 Modern Computer Systems, Inc. (“Modern Computer”), Panther Telecommunications Corp. (“Panther”), Royal Casket Distribution Corp. (“Royal Casket”), Schoolwurks, Inc. (“Schoolwurks”), and South Beach Concepts, Inc., n/k/a Global Franchise Concepts, Inc. (“South Beach”) (collectively, “Respondents”).2 The revocations are based on Respondents’ repeated failure to file required periodic reports with the Securities and Exchange Commission (“Commission”).
I. BACKGROUND
The Commission initiated this proceeding on April 24, 2007, with an Order Instituting Proceedings (“OIP”), pursuant to Section 12(j) of the Securities Exchange Act of 1934 (“Exchange Act”). The OIP alleges that each Respondent is a corporation with a class of equity securities registered with the Commission pursuant to Section 12(g) of the Exchange Act and that each has failed to file required annual and quarterly reports with the Commission for four or more years. All
1 The short form of this issuer’s name is also its stock symbol.
2 The proceeding is stayed as to the seventh captioned Respondent, SkyWay Communications Holding Corp., pursuant to 17 C.F.R. § 201.161(c)(2).
Respondents were served with the OIP by April 28, 2007, in accordance with 17 C.F.R. § 201.141(a)(2)(ii).3 To date, none of the Respondents has filed an Answer to the OIP, due ten days after service. See OIP at 4; 17 C.F.R. § 201.220(b). Thus, Respondents have failed to answer or otherwise to defend the proceeding within the meaning of 17 C.F.R. § 201.155(a)(2).4 Accordingly, Respondents are in default, and the undersigned finds that the allegations in the OIP are true as to them. See OIP at 4; 17 C.F.R. §§ 201.155(a), .220(f). Official notice has been taken of the Commission’s public official records concerning Respondents, pursuant to 17 C.F.R. § 201.323.
II. FINDINGS OF FACT
MARX (CIK No. 1034867)5 is a dissolved Florida corporation located in Miami, Florida. Its common stock has been registered with the Commission pursuant to Exchange Act Section 12(g) since 1998. MARX is delinquent in its periodic filings with the Commission, having not filed any periodic reports since it filed a Form 10-Q for the quarter ended September 30, 2002. That Form 10-Q reported no revenues and a net loss of $495,463 for that quarter. MARX stock is quoted on the Pink Sheets.6
Modern Computer (CIK No. 1119317) is a dissolved Florida corporation located in Palm Beach, Florida. Its common stock has been registered with the Commission pursuant to Exchange Act Section 12(g) since 2000. Modern Computer is delinquent in its periodic filings with the Commission, having not filed any periodic reports since its July 13, 2000, registration statement, which reported total assets of $243, total liabilities of $30,400, and a net loss of $124,095. Although Modern Computer’s name is recorded in the EDGAR database as simply “Modern Computer,” its true corporate name has always been Modern Computer Systems, Inc., which Modern Computer failed to correctly record in the Commission’s EDGAR database, as required by Commission rule.
Panther (CIK No. 1120372) is a dissolved Florida corporation located in Miami, Florida. Its common stock has been registered with the Commission pursuant to Exchange Act Section 12(g) since 2000. Panther is delinquent in its periodic filings with the Commission, having not
3 Modern Computer, Royal Casket, Schoolwurks, and South Beach were served with the OIP on April 26, Panther, on April 27, and MARX, on April 28, by USPS Express Mail attempted delivery, at “the most recent address shown on [each] entity’s most recent filing with the Commission . . . .” See 17 C.F.R. § 201.141(a)(2)(ii).
4 Respondents were advised that each Respondent that fails to file an Answer within ten days of being served with the OIP would be deemed to be in default, and the undersigned would enter an order revoking the registration of its stock. See Marex.com, Inc., Admin. Proc. No. 3-12621 (A.L.J. May 2, 2007) (unpublished).
5 The CIK number is a unique identifier for each corporation in the Commission’s EDGAR database. The user can retrieve filings of a corporation by using its CIK number.
6 MARX’s annual high was 0.01 cents; it last traded, at that price, on May 7, 2007.
http://www.pinksheets.com/quote/quote.jsp?symbol=MARX (last visited May 14, 2007).
2
filed any periodic reports since it filed a Form 10-QSB7 for the quarter ended November 30, 2001, which reported unaudited net losses of $96,830 for that quarter.
Royal Casket (CIK No. 1160427) is a dissolved Florida corporation located in Pompano Beach, Florida. Its common stock has been registered with the Commission pursuant to Exchange Act Section 12(g) since 2002. Royal Casket is delinquent in its periodic filings with the Commission, having not filed any periodic reports since it filed a Form 10-QSB for the quarter ended September 30, 2002, which reported no revenue and net losses of $4,307 for that quarter.
Schoolwurks (CIK No. 1128726) is a Florida corporation located in Miami Beach, Florida. Its common stock has been registered with the Commission pursuant to Exchange Act Section 12(g) since 2000. Schoolwurks is delinquent in its periodic filings with the Commission, having not filed any periodic reports since it filed a Form 10-QSB for the quarter ended June 30, 2001, which reported total assets of $406 and a net loss of $11,266 for that quarter.
South Beach (CIK No. 1068105) is a dissolved Florida corporation located in Sarasota, Florida. Its common stock has been registered with the Commission pursuant to Exchange Act Section 12(g) since 1998. South Beach is delinquent in its periodic filings with the Commission, having not filed any periodic reports since it filed a Form 10-QSB for the period ended September 30, 2000, which reported a net loss of $320,346 for the prior three quarters. As of May 1, 2001, South Beach changed its name to Global Franchise Concepts, Inc., with the Florida Secretary of State, but failed to record that change in the Commission’s EDGAR database, as required by Commission rule.
III. CONCLUSIONS OF LAW
By failing to file required annual and quarterly reports, Respondents violated Exchange Act Section 13(a) and Rules 13a-1 and 13a-13.
7 Forms 10-KSB and 10-QSB may be filed, in lieu of Forms 10-K and 10-Q, by a company that is a “small business issuer.” See 17 C.F.R. § 228.10(a). Issuers’ filings, such as Forms 10-K, 10-Q, 10-KSB, and 10-QSB, are publicly available on the Commission’s EDGAR website.
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IV. SANCTION
Revocation of the registrations of the stock of Respondents will serve the public interest and the protection of investors, pursuant to Section 12(j) of the Exchange Act. Revocation will help ensure that the corporate shell is not later put to an illicit use involving publicly traded securities manipulated to the detriment of market participants. Further, revocation accords with Commission sanction considerations set forth in Gateway Int’l Holdings, Inc., 88 SEC Docket 430, 438-39 (May 31, 2006) (citing Steadman v. SEC, 603 F.2d 1126, 1140 (5th Cir. 1979)), and with the sanctions imposed in similar cases in which corporations violated Exchange Act Section 13(a) and Rules 13a-1 and 13a-13 by failing to file required annual and quarterly reports. See Eagletech Communications, Inc., 88 SEC Docket 1225 (July 5, 2006); Neurotech Dev. Corp., 84 SEC Docket 3938 (A.L.J. Mar. 1, 2005); Hamilton Bancorp, Inc., 79 SEC Docket 2680 (A.L.J. Feb. 24, 2003); WSF Corp., 77 SEC Docket 1831 (A.L.J. May 8, 2002). Respondents’ violations were recurrent, egregious, and deprived the investing public of current and accurate financial information on which to make informed decisions.
Failure to file periodic reports violates a crucial provision of the Exchange Act. The purpose of the periodic reporting requirements is to publicly disclose current, accurate financial information about an issuer so that investors may make informed decisions:
The reporting requirements of the Securities Exchange Act of 1934 is the primary tool which Congress has fashioned for the protection of investors from negligent, careless, and deliberate misrepresentations in the sale of stock and securities. Congress has extended the reporting requirements even to companies which are “relatively unknown and insubstantial.”
SEC v. Beisinger Indus. Corp., 552 F.2d 15, 18 (1st Cir. 1977) (quoting legislative history); accord e-Smart Techs., Inc., 83 SEC Docket 3586, 3590 (Oct. 12, 2004). The Commission has warned that “many publicly traded companies that fail to file on a timely basis are ‘shell companies’ and, as such, attractive vehicles for fraudulent stock manipulation schemes.” e-Smart Techs., Inc., 83 SEC Docket at 3590-91 n.14.
V. ORDER
IT IS ORDERED that, pursuant to Section 12(j) of the Securities Exchange Act of 1934, 15 U.S.C. § 78l(j):
the REGISTRATION of the common stock of MAREX.COM, INC., n/k/a MAREX, INC., IS REVOKED;
the REGISTRATION of the common stock of MODERN COMPUTER SYSTEMS, INC., IS REVOKED;
the REGISTRATION of the common stock of PANTHER TELECOMMUNICATIONS CORP. IS REVOKED;
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the REGISTRATION of the common stock of ROYAL CASKET DISTRIBUTION CORP. IS REVOKED;
the REGISTRATION of the common stock of SCHOOLWURKS, INC., IS REVOKED; and
the REGISTRATION of the common stock of SOUTH BEACH CONCEPTS, INC., n/k/a GLOBAL FRANCHISE CONCEPTS, INC., IS REVOKED.
______________________________
Carol Fox Foelak
Administrative Law Judge 5
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05/15/07 12:22 AM

#1118 RE: Stock #1115

IA-2602 May 14, 2007 Stephen J. Treadway
http://www.sec.gov/litigation/admin/2007/ia-2602.pdf

UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION
INVESTMENT ADVISERS ACT OF 1940
Release No. 2602 / May 14, 2007
ADMINISTRATIVE PROCEEDING
File No. 3-12635
In the Matter of
STEPHEN J. TREADWAY,
Respondent.
ORDER INSTITUTING
ADMINISTRATIVE AND CEASE-ANDDESIST
PROCEEDINGS, MAKING
FINDINGS, AND IMPOSING REMEDIAL
SANCTIONS AND A CEASE-AND-DESIST
ORDER PURSUANT TO SECTIONS 203(f)
AND 203(k) OF THE INVESTMENT
ADVISERS ACT OF 1940
I.
The Securities and Exchange Commission (“Commission”) deems it appropriate and in the
public interest that public administrative and cease-and-desist proceedings be, and hereby are,
instituted pursuant to Sections 203(f) and 203(k) of the Investment Advisers Act of 1940
(“Advisers Act”) against Stephen J. Treadway (“Respondent” or “Treadway”).
II.
In anticipation of the institution of these proceedings, Respondent has submitted an Offer
of Settlement (the “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 findings
herein, except as to the Commission’s jurisdiction over him and the subject matter of these
proceedings, which are admitted, Respondent consents to the entry of this Order Instituting
Administrative and Cease-and-Desist Proceedings, Making Findings, and Imposing Remedial
Sanctions and a Cease-and-Desist Order Pursuant to Sections 203(f) and 203(k) of the Investment
Advisers Act of 1940 (“Order”), as set forth below.
III.
On the basis of this Order and Treadway’s Offer, the Commission finds1 that
1 The findings herein are made pursuant to Respondent's Offer of Settlement and are not binding on
any other person or entity in this or any other proceeding.

2
Respondent
1. Stephen J. Treadway, age 59, resides in New York, New York. Treadway
was the Chief Executive Officer and a managing director of PA Distributors LLC from May 1996
until July 28, 2004. Likewise, from May 1996 until June 30, 2004, Treadway was the Chief
Executive Officer and a managing director of PA Fund Management. Also during this time period,
Treadway was Chairman of the Board of Trustees for the PIMCO Funds: Multi-Manager Series
(“MMS Funds”) 2 until he resigned from that position on May 19, 2004. On July 28, 2004,
Treadway resigned as a trustee for the Board of Trustees for the MMS Funds (“MMS Board”). On
this same date, Treadway resigned his position as a managing director at Allianz-Dresdner Asset
Management of America, LLP. Treadway received a J.D. from Columbia Law School in 1972.
Related Entities
2. PA Distributors LLC (“PAD”), during the relevant time period, was a
wholly owned, indirect subsidiary of Allianz-Dresdner Asset Management of America, LLP
(“ADAM”). PAD was a Delaware limited liability company located in Stamford, Connecticut and
a broker-dealer that had been registered with the Commission under the Exchange Act since 1989.
PAD served as the distributor and underwriter for the PIMCO Complex of Funds.
3. PA Fund Management LLC (“PAFM”), during the relevant time period,
was a wholly owned, indirect subsidiary of ADAM. PAFM was a Delaware limited liability
company located in New York, New York that had been registered as an investment adviser with
the Commission since 2000. PAFM was the investment adviser and administrator for the MMS
Funds, a registered investment company comprised of separate series of mutual funds. PAFM was
responsible for managing the investment activities of the MMS Funds either directly, or through
others selected by it.
4. PEA Capital LLC (“PEA”), during the relevant time period, was a wholly
owned, indirect subsidiary of ADAM. PEA was a Delaware limited liability company located in
New York, New York that had been registered as an investment adviser with the Commission
since 2001. Treadway, on December 31, 2001, in his capacity as CEO of PAFM, signed a
Portfolio Management Agreement with PEA whereby PAFM engaged PEA, as a sub-adviser, to
act as the portfolio manager to ten funds within the MMS Trust, including, PEA Growth, PEA
Growth & Income, PEA Opportunity, PEA Target, PEA Innovation, PEA Value and PEA
Renaissance Funds. Although PEA was subject to the supervision of PAFM and the MMS Board,
PEA had full investment discretion, made all determinations with respect to the investment of these
2 From January 2000 through July 31, 2003 (the “relevant time period”), there were two trusts within the
PIMCO Complex of Funds: the MMS Funds and the Pacific Investment Manager Series (“PIMS”) (collectively
“the Funds”). Each trust was a registered investment company and consisted of separate series, each of which was
functionally a separate investment company. Each trust had a separate board of trustees. The PIMS Funds are not a
party to this proceeding.

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MMS Funds’ assets and directed the MMS Funds’ portfolio transactions to broker-dealers for
execution.
Overview
5. This matter involves the failure of Treadway to disclose the conflict of
interest that arose from PAD’s arrangements with nine broker-dealers for increased “shelf space”
within the broker-dealers’ distribution systems. The shelf space arrangements were designed to
promote the sale of all Funds distributed by PAD, not just the MMS Funds, and provide heightened
visibility at the brokerage firms, including greater access to registered representatives and
placement on preferred lists (hereinafter “Shelf Space arrangements”). PAFM and PAD
encouraged PEA to direct brokerage commissions on the MMS Funds’ portfolio transactions to
certain broker-dealers in order for PAD to receive credit for part of the cost of these Shelf Space
arrangements.
6. Treadway approved of PAD’s participation in the Shelf Space arrangements
and negotiated the terms of some of the arrangements. Because Treadway was aware that PAD
was receiving credit for PEA’s directed brokerage, Treadway enabled PAD to partially avoid using
its own assets to pay for these distribution services and benefits. By encouraging PEA’s use of
fund assets to benefit, and in fact defray, the expenses of PAD, a third party to the MMS Funds,
Treadway created a conflict of interest that Treadway, as CEO of PAFM and PAD and the
individual who addressed the MMS Board, should have disclosed.
7. Treadway, however, when acting on behalf of PAFM and PAD, failed to
disclose to the MMS Board this conflict of interest. In particular, during the annual reviews of the
investment advisory and distribution agreements and during the quarterly presentations regarding
the marketing of the MMS Funds, Treadway did not advise the MMS Board that the MMS Funds’
brokerage commissions were being used to offset part of the cost of PAD’s Shelf Space
arrangements.
PAD’s Shelf Space Arrangements with Broker-Dealers
8. Between 2000 and 2003, PAD was a party to nine Shelf Space
arrangements with broker-dealers pursuant to which broker-dealers promised that the Funds sold
and distributed by PAD would receive increased visibility within the broker-dealers’ distribution
systems; in return, PAD agreed to pay broker-dealers. PAD entered into these Shelf Space
arrangements to further the sale of Funds that it sold and distributed. PAD negotiated the Shelf
Space arrangements for PAFM and PAD’s benefit. PAFM and Treadway knew of and approved
the arrangements. Although the Shelf Space arrangements were negotiated by PAD, PAFM and
PAD were functionally the same entity and shared the same CEO, Treadway; it was mere
convenience that PAD was the entity that negotiated the shelf space arrangements.
9. The broker-dealers promised PAD that it would receive various distribution
services in connection with these Shelf Space arrangements, including, but not limited to:
participation in meetings with registered representatives, such as annual attendance at broker

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dealers’ sales and marketing conferences; the opportunity for the Funds distributed by PAD to be
mentioned in communications with broker-dealers’ customers, such as prominent placement on the
broker-dealers’ websites; and most often, placement on preferred or focus lists at the brokerdealers.
10. Although Treadway was involved in the negotiations with certain brokerdealers
for the Shelf Space arrangements, PAD’s employees conducted the majority of the
negotiations. Because of his position as CEO of PAFM and PAD, PAD’s employees sought and
obtained Treadway’s approval of each arrangement they negotiated and how PAD would pay for
them.
Treadway Asked PEA to Direct Brokerage Commissions which
PAD then Used to Satisfy its Shelf Space Obligations
11. Although most broker-dealers preferred Shelf Space payments to be made
in cash (i.e., “hard dollars”), many broker-dealers accepted payments in the form of brokerage
commissions on portfolio transactions. While hard dollars were paid from PAD’s assets, the
brokerage commissions were paid from the MMS Funds’ assets.
12. Beginning in late 2000, Treadway and employees of PAFM and PAD
discussed the possibility of helping PAD obtain “Shelf Space” for the MMS Funds through PEA
directing brokerage commissions on the MMS Funds’ portfolio transactions.
13. After Treadway approved the concept of using brokerage commissions to
pay for Shelf Space arrangements, he and other members of PAD approached PEA, the sub-adviser
to the largest MMS equity funds, to discuss whether PEA would be able to direct brokerage
commissions to certain broker-dealers whom PAD selected.
14. Treadway did not tell PEA that he and PAD were asking PEA to direct
trades to these broker-dealers to reduce PAD’s cash payments for Shelf Space arrangements. He
instead simply told PEA that trading with these firms would “benefit” PAD.
15. Initially, in late 2000 and 2001, Treadway and PAD requested that PEA
direct trades to three broker-dealers, which PEA did. At that time, there was no formal
communication between PAD and PEA about the amount of brokerage commissions directed to
each broker-dealer. By 2002, however, the process was more formalized and PEA advised PAD,
in response to PAD’s request, that $5 million in brokerage commissions would likely be available
to direct to distributing broker-dealers. At the same time, PAD increased, and Treadway approved,
the number of Shelf Space arrangements in which brokerage commissions would be used to reduce
PAD’s cash payments from three to nine broker-dealers.
16. PAD subsequently divided the available commissions among the nine
broker-dealers with whom it had Shelf Space arrangements and who had agreed to give PAD credit
for the directed brokerage commissions. PAD then assigned a target amount of brokerage
commissions to be directed to each broker-dealer and provided such targeted amounts to PEA.

5
PAD or PEA then reduced these targeted amounts to a written list. The head trader at PEA then
provided this list to the other traders.
17. PEA’s traders sought to execute portfolio transactions for the MMS Funds
with such broker-dealers in the amounts requested by PAD, subject to best execution. At the end
of the trading day, after the trades had been executed, the traders designated certain commissions
for Shelf Space arrangements.
18. Treadway was aware that PAD occasionally received invoices from some of
the nine broker-dealers that reflected the amounts that were due under the Shelf Space
arrangements. The amounts due were based on an agreed upon basis point formula and the level of
sales and aged assets for the period. The invoices reflected how much credit PAD had received as
a result of the trading through PEA and requested that any difference between the amount owed
and the credited commissions be addressed with a cash payment. Treadway approved PAD’s cash
payments to satisfy these invoices.
Treadway Failed to Disclose to the MMS Board the Alternatives for Satisfying Shelf Space
Arrangements and the Conflict of Interest that Existed
19. As a fiduciary, PAFM had a duty to disclose to the MMS Board any conflict
of interest created by the use of fund brokerage commissions to satisfy Shelf Space arrangements
or defray the expenses of a third party, yet it failed to do so. As CEO and the individual through
which PAFM addressed the MMS Board, Treadway was responsible for ensuring that PAFM met
this duty.
20. Treadway did not disclose to the MMS Board that MMS Funds’ brokerage
commissions were being directed to reduce PAD’s payments for the Shelf Space arrangements or
that a corresponding conflict of interest existed for PAFM and PEA.
21. Further, although Treadway, on behalf of PAFM disclosed to the MMS
Board information regarding PEA’s use of brokerage commissions for research and other services,
he did not disclose the use of the brokerage commissions to satisfy Shelf Space arrangements.
Treadway also did not inform the MMS Board that PAD had the option of paying for these
arrangements completely from its own assets and that, by receiving a credit for certain brokerage
commissions, PAD avoided using its own assets to pay for the services obtained under the Shelf
Space arrangements. Although Treadway had knowledge of the Shelf Space arrangements and had
opportunities to disclose this information to the MMS Board, he did not disclose this information
to the MMS Board and did not ensure that anyone else disclosed this information.
22. As a result of the conduct described above, Treadway willfully aided and
abetted and caused PAFM’s violation of Section 206(2) of the Advisers Act, which provides that it
is “unlawful for any investment adviser, by the use of the mails or any means or instrumentality of
interstate commerce, directly or indirectly . . . to engage in any transaction, practice, or course of
business which operates as a fraud or deceit upon any client or prospective client.”

6
IV.
In view of the foregoing, the Commission deems it appropriate and in the public interest to
impose the sanctions agreed to in Respondent Treadway’s Offer.
Accordingly, pursuant to Sections 203(f) and 203(k) of the Advisers Act, it is hereby
ORDERED that:
A. Treadway is censured.
B. Treadway shall cease and desist from committing or causing any violations and any
future violations of Section 206(2) of the Advisers Act.
C. Within 30 days from the date of entry of the Order, Treadway shall pay a civil
money penalty in the amount of $75,000 to the United States Treasury. Such
payment shall be: (A) made by United States postal money order, certified check,
bank cashier’s check or bank money order; (B) made payable to the Securities and
Exchange Commission; (C) hand-delivered or mailed to the Office of Financial
Management, Securities and Exchange Commission, Operations Center, 6432
General Green Way, Stop 0-3, Alexandria, VA 22312; and (D) submitted under
cover letter that identifies Treadway as a Respondent in these proceedings, and the
file number of these proceedings, a copy of which cover letter and money order or
check shall be sent to Daniel M. Hawke, District Administrator, Philadelphia
District Office, Securities and Exchange Commission, Mellon Independence
Center, 701 Market Street, Suite 2000, Philadelphia, PA 19106.
By the Commission.
Nancy M. Morris
Secretary