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UNITED STATES OF AMERICA

Before the

SECURITIES AND EXCHANGE COMMISSION

SECURITIES EXCHANGE ACT OF 1934

Release No. 95047 / June 6, 2022

INVESTMENT ADVISERS ACT OF 1940

Release No. 6045 / June 6, 2022

ADMINISTRATIVE PROCEEDING

File No. 3-20882

In the Matter of

JOHN PAUL HARNISH, 

d/b/a KM ADVISORY 

SERVICES,

Respondent.

CORRECTED ORDER INSTITUTING 

ADMINISTRATIVE AND CEASE-ANDDESIST PROCEEDINGS, PURSUANT 

TO SECTION 15(b) OF THE 

SECURITIES EXCHANGE ACT OF 1934 

AND SECTIONS 203(e), 203(f) AND 203(k) 

OF THE INVESTMENT ADVISERS ACT 

OF 1940, MAKING FINDINGS, AND 

IMPOSING REMEDIAL SANCTIONS 

AND A CEASE-AND-DESIST ORDER

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 Section 15(b) of the Securities Exchange Act of 1934 (“Exchange 

Act”) and Sections 203(e), 203(f) and 203(k) of the Investment Advisers Act of 1940 (“Advisers 

Act”) against John Paul Harnish d/b/a KM Advisory Services (“Respondent”). 

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 it 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, Pursuant to Section 15(b) of the Securities 

Exchange Act of 1934 and Sections 203(e), 203(f) and 203(k) of the Investment Advisers Act of 

1940, Making Findings, and Imposing Remedial Sanctions and a Cease-and-Desist Order 

(“Order”), as set forth below.
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III.

On the basis of this Order and Respondent’s Offer, the Commission finds1that:

Summary

1. These proceedings arise out of breaches of fiduciary duties by former registered 

investment adviser KM Advisory Services (“KMA”), an unincorporated sole-proprietorship 

purchased by John Paul Harnish (“Harnish”) in February 2020, in connection with KMA and 

Harnish’s receipt of mutual fund fees pursuant to Rule 12b-1 under the Investment Company Act 

of 1940 (“12b-1 fees”) and commissions in the form of sales “loads” from advisory client 

investments without fully and fairly disclosing its related conflicts of interest. Since at least

January 2016, and continuing from the date Harnish purchased KMA in February 2020 and 

through December 2020, KMA invested the vast majority of clients’ assets in certain mutual funds 

that paid 12b-1 fees and charged sales load commissions exclusively through an introducing 

broker-dealer (the “Introducing Broker-Dealer”) with whom Harnish was a registered 

representative. As a result, KMA’s clients paid 12b-1 fees and commissions to the Introducing 

Broker-Dealer, a portion of which were shared with KMA and Harnish. KMA failed to fully and 

adequately disclose this arrangement and the conflicts of interest arising therefrom. KMA also 

breached its duty of care by not routinely comparing the Introducing Broker-Dealer’s order 

execution with other broker-dealers, which KMA’s advisory relationship with its clients required. 

KMA therefore caused its advisory clients to invest through the Introducing Broker-Dealer and in 

share classes of mutual funds that charged 12b-1 fees when other broker-dealers made available 

share classes of the same funds to their customers that may have presented a more favorable value 

for KMA’s clients under the particular circumstances in place at the time of the transactions. 

Furthermore, KMA failed to adopt and implement written compliance policies and procedures 

reasonably designed to prevent violations of the Advisers Act and the rules thereunder in 

connection with its mutual fund share class and broker-dealer selection practices. As a result of the 

conduct described above, KMA willfully violated Sections 206(2) and 206(4) of the Advisers Act 

and Rule 206(4)-7 thereunder.

Respondent

2. KM Advisory Services was an investment adviser operating as a sole proprietorship 

with a primary place of business in Victor, New York. KMA’s prior owner (the “Prior Owner”)

founded KMA in 1994 and sold it to Harnish in February 2020. KMA was registered with the 

Commission as an investment adviser from 1996 until August 2021, when it ceased operation and 

filed a Form ADV-W. As of March 2021, the date of KMA’s most recent annual amendment to its 

Form ADV, KMA managed 177 advisory clients with over $172 million in assets. Harnish, 47

years old, resides in Pittsford, New York and was an investment adviser representative (“IAR”) of 

KMA, its director of financial planning and its chief compliance officer from 2004 through August 

2021. Harnish holds Series 7, 24 and 63 licenses and has been a registered representative of the 

Introducing Broker-Dealer since 2004. 

 

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 The findings herein are made pursuant to Respondent’s Offer and are not binding on any other person or entity in 

this or any other proceeding.
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Facts

Background on Mutual Fund Share Classes

3. Mutual funds offer investors different “share classes.” Each share class represents 

an interest in the same portfolio of securities with the same investment objective. The primary 

difference among the share classes is the fee structure. For example, some mutual fund share 

classes charge 12b-1 fees or shareholder servicing fees to cover fund distribution or sometimes 

shareholder services (hereinafter, “Retail Class”). The Retail Class 12b-1 fees are recurring, are 

included in a mutual fund’s total annual fund operating expenses for that class, vary by fund and by 

share class within a fund, and typically range from 0.25% to 1%. The 12b-1 fees are deducted 

from the mutual fund’s assets attributed to that class on an ongoing basis and paid to the fund’s 

distributor or principal underwriter, which generally remits the 12b-1 fees to the broker-dealer that 

distributed or sold the shares. Certain Retail Class share classes also charge a sales load that is 

calculated as a percentage of the purchase amount when investors buy shares of the fund (a “frontend load”). Front-end loads may have discounts (referred to as “breakpoints”) available to the 

investor as a result of the total amount invested. Another type of Retail Class charges a contingent

deferred sales charge (“CDSC”), a deferred sales charge the purchaser pays if the purchaser sells 

the shares during a specified time period following the purchase.

4. Many mutual funds also offer share classes that charge lower fees overall and that 

do not charge 12b-1 or shareholder servicing fees (e.g., “Institutional Class” or “Class I” shares 

(collectively, “Class I shares”)) or that waive sales loads (“Load-Waived shares”). An investor 

who holds Class I shares of a mutual fund will usually pay lower total annual fund operating 

expenses – and thus will almost always earn higher returns over time – than one who holds a Retail 

Class of the same fund. Therefore, if a mutual fund offers a Class I share, and an investor is 

eligible to own it, it is often, though not always, better for the investor to purchase or hold the 

Class I share. Similarly, if a mutual fund offers Load-Waived shares, and an investor is eligible to 

own them, it is often, though not always, better for the investor to purchase the Load-Waived 

shares instead of the share class that charges sales loads. The cost of owning shares of a mutual 

fund will depend on the expense ratio of the particular share class and any sales loads or charges.

KMA’s Business

5. KMA’s Prior Owner established KMA as a sole proprietorship in 1994 to provide 

financial planning services (e.g. retirement planning, estate planning and tax consulting services) 

and also investment advisory services on a discretionary basis to individual clients. Except for its 

services rendered to retirement plan clients, which accounted for roughly 10-20% of KMA’s 

business, KMA used the Introducing Broker-Dealer. The Introducing Broker-Dealer used a 

clearing broker that provided the Introducing Broker-Dealer with access to a variety of mutual fund 

share classes, including Class I shares and Load-Waived shares for advisory clients. However, the 

Introducing Broker-Dealer, which is dually-registered as a broker-dealer and investment adviser 

with its own advisory platform, limited access to Class I shares and Load-Waived shares to clients 

with accounts on its advisory platform; the Introducing Broker-Dealer provided only Retail Class 

shares to brokerage account holders. As such, the Introducing Broker Dealer did not allow KMA 

to select I Class shares and Load-Waived shares for its clients.
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6. From the date Harnish purchased KMA in February 2020 through December 2020

(the “Relevant Period”), KMA’s non-retirement plan advisory clients with mutual fund assets 

under KMA’s management were required to maintain brokerage accounts at the Introducing 

Broker-Dealer with Harnish as the Introducing Broker-Dealer’s registered representative. Because 

of this arrangement, only Retail Class shares were available to these advisory clients.

7. KMA and Harnish derived their revenue from four sources: (1) a disclosed advisory 

fee of 0.5% of clients’ AUM; (2) financial planning fees paid by clients; (3) 12b-1 fees that its 

clients paid from their mutual fund holdings; and (4) sales loads its clients paid on mutual fund 

purchases. During the Relevant Period, KMA received advisory fee revenue directly in a bank 

account in Harnish’s and KMA’s name, and the Introducing Broker-Dealer received 12b-1 fee 

payments and sales loads from KMA’s clients’ accounts. Per agreement between Harnish and the 

Introducing Broker-Dealer, the Introducing Broker-Dealer shared with Harnish the 12b-1 fee 

payments and sales loads in his capacity as a registered representative. Harnish’s portion of the 

12b-1 fees and sales load commissions were remitted to a bank account held by KMA’s business 

operating entity, which Harnish owned. The Introducing Broker-Dealer retained a portion the 12b1 fee payments and sales loads for itself.

8. During the Relevant Period, the vast majority of advisory assets that KMA 

recommended that its clients purchase were mutual fund share classes that charge sales loads 

and/or 12b-1 fees. Specifically, during the Relevant Period, KMA placed the majority of client 

assets in C Class shares, which typically charge 12b-1 fees of 1% on client holdings and charge a 

1% CDSC for a specified time period. KMA placed the remaining client assets in A Class shares, 

which typically charge sales loads of 5% at the time of purchase and 12b-1 fees of 0.25% per year 

on client holdings. In most instances, KMA recommended A Class shares only when the client 

was eligible for a discount due to a breakpoint, which reduced the cost to the client of holding A 

Class shares. Most clients paid sales loads of 3.5% or less, and some paid sales loads of 0%. 

9. During the Relevant Period, KMA stated to its clients that it would “routinely” 

compare the Introducing Broker Dealer’s order execution with other broker-dealers to “ensure” 

that the Introducing Broker-Dealer remained competitive in providing best execution for KMA’s

clients, but KMA did not routinely do so. For most of the Relevant Period, KMA did not 

recommend that its clients open accounts with another broker-dealer that would provide clients 

with access to Load-Waived shares or share classes that do not charge 12b-1 fees.

 

10. During the Relevant Period, KMA and Harnish received a significant percentage of 

their total compensation from 12b-1 fees and sales loads that the Introducing Broker-Dealer 

charged KMA’s advisory clients.
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KMA’s Disclosures Failures 

Disclosures Regarding KMA’s Receipt of 12b-1 Fees

11. KMA represented in its Form ADV Part 2A Brochures (“Brochures”) from at least 

January 2016 through March 2019 that:

“Although not a material consideration in recommending and/or selecting a 

particular mutual fund for the Account, KMA and its Advisors may receive a 

portion of the 12b-1 distribution fees or other fees imposed by the mutual fund and 

paid by the mutual fund or one of their affiliates...” 

Elsewhere the Brochures stated “[Introducing Broker-Dealer], as well as KMA's Advisors, may

receive additional ongoing 12b-1 trail commissions on mutual fund purchases during the period 

that the client maintains the mutual fund investment.” Harnish reviewed and adopted the above 

disclosure language, which was drafted with the assistance of KMA’s compliance consultant.

12. These disclosures did not adequately disclose all material facts regarding the 

conflicts of interest that arose when it invested advisory clients through the Introducing BrokerDealer in a mutual fund share class that would generate and pay 12b-1 fees to KMA’s advisers 

while share classes of the same funds were available through other broker-dealers that did not pay 

or paid less 12b-1 fees. In addition, KMA’s disclosures stated that it and its advisers “may receive 

a portion of the 12b-1 distribution fees” when KMA and its advisers actually did and would 

receive a portion of the 12b-1 fees KMA’s clients paid.

Disclosures Regarding KMA’s Receipt of Commissions and Selection of the Introducing 

Broker-Dealers

13. KMA’s advisory agreements during the Relevant Period stated that:

“You have no obligation to implement recommendations by executing 

transactions through [Introducing Broker-Dealer]. The Financial Advisor 

generally seeks competitive commission rates. . . If you choose to effect 

transactions with [Introducing Broker-Dealer], the Financial Advisor may act as a 

Registered Representative of [Introducing Broker-Dealer]. In connection with 

those transactions, [Introducing Broker-Dealer] may collect transaction fees, and 

the Financial Advisor may receive commissions.”

14. KMA similarly stated in its Brochures during the Relevant Period that:

“Should the client desire to implement investment recommendations, they could 

engage KMA's advisor in his capacity as a registered representative of 

[Introducing Broker-Dealer] to process investment recommendations. Clients 

choosing to purchase investment products through [Introducing Broker-Dealer]

will be charged brokerage commissions, a portion of which is paid to the advisor, to 

affect these securities transactions.”
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15. KMA’s Brochures during the Relevant Period further stated that “KMA’s Advisor 

may recommend other broker/dealers to their advisory clients.” However, for most of the Relevant 

Period, KMA required its non-retirement plan advisory clients with mutual fund assets to maintain 

brokerage accounts at the Introducing Broker-Dealer and KMA never recommended any other

broker-dealer besides the Introducing Broker-Dealer to its non-retirement plan advisory clients

with mutual fund assets. In addition, KMA’s disclosures in its advisory agreements stated that it 

“may receive commissions” when KMA and its advisers actually did and would receive 

commissions in the form of sales loads.

 

KMA’s Examinations by the Introducing Broker-Dealer and Subsequent Disclosure 

Amendments

 

16. In November 2016 and May 2017, the Introducing Broker-Dealer’s independent 

registered investment adviser compliance unit issued examination reports to KMA, addressed to 

Harnish, that identified concerns related to KMA’s disclosures regarding its and its advisers’

receipt of 12b-1 fees and commissions.

17. In October 2019, following Harnish’s discussion of the Introducing BrokerDealer’s examination findings with KMA’s compliance consultant, KMA amended its Brochure 

disclosures related to 12b-1 fee revenue to state the following:

“Through [Introducing Broker-Dealer], mutual fund investments can be invested in 

various share classes: A, B, C, and M. These share classes have different [characteristics]

that can include up-front commission charges and back-end sales charges. In addition, 

these share classes include l2b-l fees that are paid to the broker dealer and the advisor. 

The full detail of mutual funds fees and expenses can be found in the prospectus for each 

fund. KMA’s advisors will recommend the share class that they feel is in the client’s best 

interest based on their needs, investment objectives, time horizons, current holdings and 

available breakpoints. While it will be the advisors’ intent to select the lowest cost share 

class, the client may have a higher total cost of ownership based on the actual holding 

period of the investment.

Clients are able to purchase the same or similar products through other brokers and 

investment advisors. Other brokers and investment advisors may offer shares class 

options that have a lower cost. For example, KMA does not have access to institutional, 

advisor or clean share classes. Similarly, investment advisory service fees charged by 

other investment advisors may be similar to or lower than the fees that KMA charges.”

KMA’s revised disclosures, while an improvement, still did not adequately disclose all material 

facts regarding the conflicts of interest that arose when it invested advisory clients through the 

Introducing Broker-Dealer in a mutual fund share class that would generate and pay 12b-1 fees to 

KMA and Harnish while share classes of the same funds were available through other brokerdealers that did not pay or paid less 12b-1 fees. Harnish reviewed and adopted the amended 

disclosure language, which was drafted with the assistance of KMA’s compliance consultant.
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18. In or about October 2020, Harnish began transitioning KMA’s advisory clients to a 

new investment adviser he created, which registered with the Commission on October 13, 2020.

Duty of Care Failures

19. An investment adviser’s fiduciary duty also includes a duty of care. To fulfill this 

obligation, an adviser, among other things, must provide investment advice in the best interest of 

its client based on the client’s objectives and seek best execution for client transactions.

20. KMA’s advisory relationship with its clients specifically required it to “routinely 

compare the order execution disclosure information of [Introducing Broker-Dealer] and [its 

clearing firm] to other broker/dealers to ensure that [Introducing Broker-Dealer] and [its clearing 

firm] remain competitive in providing best execution for their clients.” During the Relevant 

Period, KMA did not routinely conduct comparisons of the Introducing Broker-Dealer’s execution 

with other broker-dealers.

Compliance Deficiencies

21. During the Relevant Period, KMA failed to adopt and implement written 

compliance policies and procedures reasonably designed to prevent violations of the Advisers Act 

and the rules thereunder in connection with either (1) the disclosure of the conflicts of interest that 

arose from its mutual fund and mutual fund share class selection practices or (2) seeking best 

execution for client transactions in connection with selecting a broker-dealer for its advisory 

clients.

Disgorgement

22. The disgorgement and prejudgment interest ordered in Section IV is consistent with 

equitable principles and does not exceed the Respondent’s net profits from the violations, and will 

be distributed to harmed investors to the extent feasible. The Commission will hold funds paid 

pursuant to Section IV in an account at the United States Treasury pending distribution. Upon 

approval of the distribution final accounting by the Commission, any amounts remaining that are 

infeasible to return to investors, and any amounts returned to the Commission in the future that are 

infeasible to return to investors, may be transferred to the general fund of the U.S. Treasury, 

subject to Section 21F(g)(3) of the Exchange Act.

Violations

23. As a result of the conduct described above, Respondent willfully violated Section 

206(2) of the Advisers Act, which makes it unlawful for any investment adviser, 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.” Scienter is not required to establish a violation of 

Section 206(2), but rather a violation may rest on a finding of negligence. SEC v. Steadman, 967 

F.2d 636, 643 n.5 (D.C. Cir. 1992) (citing SEC v. Capital Gains Research Bureau, Inc., 375 U.S. 

180, 194-95 (1963)).
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24. As a result of the conduct described above, Respondent willfully violated Section 

206(4) of the Advisers Act and Rule 206(4)-7 thereunder, which require a registered investment 

adviser to adopt and implement written compliance policies and procedures reasonably designed to 

prevent violations of the Advisers Act and the rules thereunder.

Undertakings

25. Harnish has undertaken to:

Steps Taken to Date

a. Harnish has certified that he reviewed and corrected as necessary all relevant 

disclosure documents concerning mutual fund share class selection, 

commissions, and 12b-1 fees for any registered investment adviser for which 

Harnish is the owner or control person.

b. Harnish has certified that he has evaluated whether existing clients for which 

Harnish is an investment advisory representative should be moved to a lowercost share class and move clients as necessary. 

c. Harnish has certified that he has evaluated, updated (if necessary), and reviewed

for the effectiveness of their implementation, the policies and procedures for 

any registered investment adviser for which Harnish is the owner or control 

person, so that the policies and procedures are reasonably designed to prevent 

violations of the Advisers Act in connection with mutual fund share class 

selection practices and practices with respect to recommendations of brokerdealers to clients and the adviser’s evaluation of the execution of client trades.

d. In determining whether to accept the Offer, the Commission has considered the 

undertakings set forth in paragraphs 25.a through 25.c above.

Steps to be Taken

e. Within 40 days of the entry of this Order, notify affected investors (i.e., those 

former and current clients who were financially harmed by the practices 

discussed above (hereinafter, “affected investors”)) of the settlement terms of 

this Order by sending a copy of this Order to each affected investor via mail, 

email, or such other method not unacceptable to the Commission staff, together 

with a cover letter in a form not unacceptable to the Commission staff.

f. Certify, in writing, compliance with the undertaking set forth above. The 

certification shall provide written evidence of compliance in the form of a 

narrative, and be supported by exhibits sufficient to demonstrate compliance. 

The Commission staff may make reasonable requests for further evidence of 

compliance, and Harnish agrees to provide such evidence. The certification and 

supporting material shall be submitted to Andrew B. Dean, Assistant Regional 
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Director, Division of Enforcement, Securities and Exchange Commission, 100 

Pearl Street, Suite 20-100, New York, NY 10004, or such other address as the 

Commission staff may provide, with a copy to the Office of Chief Counsel of 

the Division of Enforcement, Securities and Exchange Commission, 100 F 

Street, NE, Washington, DC 20549, no later than forty-five (45) days from the 

date of the completion of the undertakings.

g. For good cause shown, the Commission staff may extend any of the procedural 

dates relating to the undertakings. Deadlines for procedural dates shall be 

counted in calendar days, except that if the last day falls on a weekend or 

federal holiday, the next business day shall be considered the last day.

IV.

In view of the foregoing, the Commission deems it appropriate, and in the public interest 

to impose the sanctions agreed to in Respondent’s Offer.

Accordingly, pursuant to Section 15(b) of the Exchange Act and Sections 203(e), 203(f)

and 203(k) of the Advisers Act, it is hereby ORDERED that:

A. Respondent cease and desist from committing or causing any violations and any 

future violations of Sections 206(2) and 206(4) of the Advisers Act and Rule 206(4)-7 promulgated 

thereunder.

B. Respondent is censured.

C. Respondent shall, within 10 days of the entry of this Order, pay disgorgement, 

prejudgment interest and civil money penalties as follows:

(1) Respondent shall, within 10 days of the entry of this order, pay

disgorgement of $220,097.30 and prejudgment interest of $5,549.69 to the 

Securities and Exchange Commission. If timely payment is not made, 

additional interest shall accrue pursuant to SEC Rule of Practice 600.

(2) Respondent shall, within 10 days of the entry of this order, pay a civil 

money penalty in the amount of $75,000 to the Securities and Exchange 

Commission. If timely payment is not made, additional interest shall 

accrue pursuant to 31 U.S.C. § 3717.

(3) Payment must be made in one of the following ways: 

(a) Respondent may transmit payment electronically to the 

Commission, which will provide detailed ACH transfer/Fedwire 

instructions upon request;
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(b) Respondent may make direct payment from a bank account via 

Pay.gov through the SEC website at 

http://www.sec.gov/about/offices/ofm.htm; or 

(c) Respondent may pay by certified check, bank cashier’s check, or 

United States postal money order, made payable to the Securities 

and Exchange Commission and hand-delivered or mailed to: 

Enterprise Services Center

Accounts Receivable Branch

HQ Bldg., Room 181, AMZ-341

6500 South MacArthur Boulevard

Oklahoma City, OK 73169

Payments by check or money order must be accompanied by a 

cover letter identifying John Paul Harnish d/b/a KM Advisory 

Services as Respondent in these proceedings, and the file number 

of these proceedings; a copy of the cover letter and check or 

money order must be sent to Andrew B. Dean, Assistant Regional 

Director, Division of Enforcement, Securities and Exchange 

Commission, 100 Pearl Street, Suite 20-100, New York, NY 

10004. 

(5) Pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002, as 

amended, a Fair Fund is created for the penalties, disgorgement, and 

prejudgment interest referenced in this Section IV, paragraph C and 

combined with the Fair Fund established in the Commission’s 

simultaneously instituted related proceeding, In the Matter of Kathryn 

Jane Meredith, d/b/a KM Advisory Services, Admin. Proc. No. 3-20881

(June 6, 2022) to form the KM Advisory Fair Fund. Amounts ordered to 

be paid as civil money penalties pursuant to this Order shall be treated as 

penalties paid to the government for all purposes, including all tax 

purposes. To preserve the deterrent effect of the civil penalty, Respondent

agrees that in any Related Investor Action, he shall not argue that he is 

entitled to, nor shall he benefit by, offset or reduction of any award of 

compensatory damages by the amount of any part of Respondent’s

payment of a civil penalty in this action (“Penalty Offset”). If the court in 

any Related Investor Action grants such a Penalty Offset, Respondent

agrees that he shall, within 30 days after entry of a final order granting the 

Penalty Offset, notify the Commission’s counsel in this action and pay the 

amount of the Penalty Offset to the Securities and Exchange Commission. 

Such a payment shall not be deemed an additional civil penalty and shall 

not be deemed to change the amount of the civil penalty imposed in this 

proceeding. For purposes of this paragraph, a “Related Investor Action” 

means a private damages action brought against Respondent by or on 
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behalf of one or more investors based on substantially the same facts as 

alleged in the Order instituted by the Commission in this proceeding.

D. Harnish shall comply with the undertakings enumerated in Section III, paragraphs 

25.e through 25.f above.

V.

It is further Ordered that, solely for purposes of exceptions to discharge set forth in Section 

523 of the Bankruptcy Code, 11 U.S.C. § 523, the findings in this Order are true and admitted by 

Respondent Harnish, and further, any debt for disgorgement, prejudgment interest, civil penalty or 

other amounts due by Respondent Harnish under this Order or any other judgment, order, consent 

order, decree or settlement agreement entered in connection with this proceeding, is a debt for the 

violation by Respondent Harnish of the federal securities laws or any regulation or order issued 

under such laws, as set forth in Section 523(a)(19) of the Bankruptcy Code, 11 U.S.C. § 523(a)(19).

By the Commission.

Vanessa A. Countryman

Secretary