UNITED STATES OF AMERICA

Before the

SECURITIES AND EXCHANGE COMMISSION

SECURITIES EXCHANGE ACT OF 1934

Release No. 85968 / May 30, 2019

ADMINISTRATIVE PROCEEDING

File No. 3-18423

In the Matter of

CLAYBORNE GROUP, LLC, 

and DEAN A. HEINEMANN

Respondents.

ORDER DIRECTING PAYMENT OF 

CERTAIN FUNDS RECEIVED BY THE 

COMMISSION AND DIRECTING THE 

TRANSFER OF REMAINING FUNDS TO 

TREASURY

On April 5, 2018, the Commission simultaneously instituted and settled an administrative

and cease and desist proceeding against Clayborne Group, LLC (“Clayborne”) and Dean A. 

Heinemann (“Heinemann” and together with Clayborne, “Respondents”). These proceedings arise 

out of Clayborne’s improper registration as an investment adviser, as well as its violation of the 

Custody Rule and recordkeeping provisions. In the Matter of Clayborne Group, LLC and Dean A. 

Heineman, Admin. Proc. File No. 3-18423 (the “OIP”).1In the OIP, the Commission ordered 

Respondents to cease and desist from committing or causing any violations and any future 

violations of Sections 203A, 204, 206(4) and 207 of the Investment Advisers Act of 1940 

(“Advisers Act’), and Rules 204-1, 204-2 and 206(4)-2 promulgated thereunder. The Commission 

also ordered that Heinemann (i) be suspended from association with any broker, dealer, 

investment adviser, municipal securities dealer, municipal advisor, transfer agent, or nationally 

recognized statistical rating organization for a period of twelve months; and (ii) be prohibited 

from serving or acting as an employee, officer, director, member of an advisory board, investment 

adviser or depositor of, or principal underwriter for, a registered investment company or affiliated 

person of such investment adviser, depositor, or principal underwriter for a period of twelve months. 

The Commission further ordered Heinemann to pay a civil penalty of $20,000 to the Commission 

in installments, with such payments to be completed within 360 days of the entry of the OIP and 

created a Fair Fund pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002, as amended.

The Commission has received the civil penalty amount referenced above. The

Commission staff shall, within 90 days of the issuance of this order, pay such funds (the “Fair 

Fund”) to six investors previously identified by Commission staff who suffered a net loss in 

connection with the violations described in the OIP (“Eligible Investors”). The distribution 

 

1

 Advisers Act Rel. No. 4875 (Apr. 5, 2018).
2

payments shall be made pro rata based on the percentage of the total net loss suffered by each 

Eligible Investor relative to the total net loss suffered by all Eligible Investors as set forth in 

Exhibit 1. Each Eligible Investor’s payment amount will be determined by the Commission staff 

by multiplying the percentage of each Eligible Investor’s loss by the total dollar amount availalable 

for distribution (after accounting for taxes and administrative expenses associated with the

distribution of these amounts). Commission staff will seek the appointment of a tax administrator 

for the Fair Fund as it constitutes a payment from a qualified settlement fund (“QSF”) under 

section of 468B(g) of the Internal Revenue Code (IRC), 26 U.S.C. Section 468B(g), and related 

regulations, 26 C.F.R Sections 1.468B-1 through 1.468B-5. Taxes, if any, and related 

administrative expenses shall be paid from funds remaining after the payment has been made to 

the Eligible Investors. After the distribution payments and all taxes and administrative expenses 

are paid, the Commission staff will transfer the remaining funds, if any, to the general fund of the 

United States Treasury subject to Exchange Act Section 21F(g)(3).

Accordingly, it is ORDERED that:

A. The Commission staff shall distribute the Fair Fund created in this matter and pay 

the six Eligible Investors as set forth in Exhbit 1; and,

B. After payment is made to the Eligible Investors, the Commission staff shall pay 

taxes, if any, and related administrative expenses from the funds remaining after 

payment to the Eligible Investors. Any remaining funds paid by the Respondents

to the Commission shall be transferred to the U.S. Treasury.

By the Commission.

Vanessa A. Countryman

Acting Secretary
3

Exhibit 1

Eligible Investors Distribution Percentage

Eligible Investor #1 11.71171171%

Eligible Investor #2 11.71171171%

Eligible Investor #3 36.03603604%

Eligible Investor #4 9.009009009%

Eligible Investor #5 18.01801802%

Eligible Investor #6 13.51351351%