UNITED STATES OF AMERICA

before the

SECURITIES AND EXCHANGE COMMISSION

SECURITIES EXCHANGE ACT OF 1934

Release No. 99694 / March 8, 2024

INVESTMENT ADVISERS ACT OF 1940

Release No. 6569 / March 8, 2024

Admin. Proc. File No. 3-20823

In the Matter of 

LYNN D. CAWTHORNE

ORDER TO SHOW CAUSE

On April 15, 2022, the Securities and Exchange Commission issued an order instituting 

administrative proceedings against Lynn D. Cawthorne pursuant to Section 15(b) of the 

Securities Exchange Act of 1934 and Section 203(f) of the Investment Advisers Act of 1940.1 

On January 24, 2024, the Commission issued an order finding that service of the OIP had been 

made on Cawthorne, pursuant to Rule 141(a)(2)(i) of the Commission’s Rules of Practice,2on 

July 13, 2022.3 

As stated in the OIP, Cawthorne’s answer was required to be filed within 20 days of 

service of the OIP.4 On October 6, 2022, after Cawthorne failed to answer the OIP, the Division 

filed a motion for default and imposition of sanctions against Cawthorne. The Division requests 

1 Lynn D. Cawthorne, Exchange Act Release No. 94734, 2022 WL 1127102 (Apr. 15, 

2022).

2

17 C.F.R. § 201.141(a)(2)(i).

3 Lynn D. Cawthorne, Exchange Act Release No. 99420, 2024 WL 307170 (Jan. 24, 2024). 

On February 8, 2024, the Division filed a status report stating that it had additionally sent the 

OIP to Cawthorne at a mailing address for the Federal Bureau of Prisons’ (“BOP”) Residential 

Re-Entry Management (“RRM”) program and that “the package will be forwarded to 

Respondent per BOP and RRM program policy.” The Division also stated that it had identified a 

telephone number for Cawthorne and that Division counsel had a 16-minute telephone 

conversation with a person who identified himself as Cawthorne, in which Division counsel 

informed Cawthorne of the nature of the administrative proceedings against him. The Division

need not file additional status reports. 

4 Cawthorne, 2022 WL 1127102, at *2; Rules of Practice 151(a), 160(b), 220(b), 17 C.F.R. 

§§ 201.151(a), 160(b), .220(b). 
2

that the Commission find Cawthorne in default for not filing an answer and bar him from the 

securities industry based on the record and the allegations in the OIP. A response to the 

Division’s motion was due within five days after it was served.5 As of the date of this order, 

Cawthorne has not filed an answer or opposition to the Division’s motion. The prehearing 

conference and the hearing are thus continued indefinitely.

Accordingly, Cawthorne is ORDERED to SHOW CAUSE by March 22, 2024, why he

should not be deemed to be in default and why this proceeding should not be determined against 

him due to his failure to file an answer, respond to the Division’s motion, or otherwise defend 

this proceeding. Cawthorne’s submission shall address the reasons for his failure to timely file 

an answer or response to the Division’s motion, include a proposed answer to be accepted in the 

event that the Commission does not enter a default against him, and address the substance of the 

Division’s request for sanctions. If Cawthorne files a response to this order to show cause, the 

Division may file a reply within 14 days after its service. 

When a party defaults, the allegations in the OIP will be deemed to be true and the 

Commission may determine the proceeding against that party upon consideration of the record 

without holding a public hearing.

6

 The OIP informed Cawthorne that a failure to file an answer 

could result in deeming him in default and determining the proceedings against him.

7

 The failure 

to timely oppose a dispositive motion is also a basis for a finding of default.8 Like failing to 

timely file an answer, failing to timely oppose a dispositive motion may result in the 

determination of particular claims, or the proceeding as a whole, adversely to the non-moving 

party and may be deemed a forfeiture of arguments that could have been raised at that time.9

5 Rule of Practice 154(b), 17 C.F.R. § 201.154(b).

6 Rules of Practice 155, 180, 17 C.F.R. §§ 201.155, .180.

7 Cawthorne, 2022 WL 1127102, at *2.

8

See Rules of Practice 155(a)(2), 180(c), 17 C.F.R. §§ 201.155(a)(2), .180(c); see, e.g., 

Behnam Halali, Exchange Act Release No. 79722, 2017 WL 24498, at *3 n.12 (Jan. 3, 2017).

9

See, e.g., McBarron Capital LLC, Exchange Act Release No. 81789, 2017 WL 4350655, 

at *3-5 (Sep. 29, 2017); Bennett Grp. Fin. Servs., LLC, Exchange Act Release No. 80347, 2017 

WL 1176053, at *2-3 (Mar. 30, 2017), abrogated in part on other grounds by Lucia v. SEC, 138 

S. Ct. 2044 (2018); Apollo Publ’n Corp., Securities Act Release No. 8678, 2006 WL 985307, at 

*1 n.6 (Apr. 13, 2006).
3

The parties’ attention is directed to the e-filing requirements in the Rules of Practice.10

We also remind the parties that any document filed with the Commission must be served upon all 

participants in the proceeding and be accompanied by a certificate of service.11

Upon review of the filings in response to this order, the Commission will either direct 

further proceedings by subsequent order or issue a final opinion and order resolving the matter.

For the Commission, by the Office of the General Counsel, pursuant to delegated 

authority.

Vanessa A. Countryman

Secretary

10 See Amendments to the Commission’s Rules of Practice, Exchange Act Release No. 

90442, 2020 WL 7013370 (Nov. 17, 2020), 85 Fed. Reg. 86,464 (Dec. 30, 2020), 

https://www.sec.gov/rules/final/2020/34-90442a.pdf; Instructions for Electronic Filing and 

Service of Documents in SEC Administrative Proceedings and Technical Specifications,

https://www.sec.gov/efapdocs/instructions.pdf. The amendments impose other obligations such 

as a redaction and omission of sensitive personal information requirement. Amendments to the 

Commission’s Rules of Practice, 85 Fed. Reg. at 86,465–81. 

11 See Rule of Practice 150, 17 C.F.R. § 201.150 (generally requiring parties to serve each 

other with their filings); Rule of Practice 151(d), 17 C.F.R. § 201.151(d) (“Papers filed with the 

Commission . . . shall be accompanied by a certificate stating the name of the person or persons 

served, the date of service, the method of service, and the mailing address or email address to 

which service was made, if not made in person.”). The Division of Enforcement is represented 

by Brian T. James and Teresa Verges, Securities and Exchange Commission, Miami Regional 

Office; 801 Brickell Avenue, Suite 1950; Miami, FL 33131; jamesb@sec.gov and 

vergest@sec.gov.