UNITED STATES DISTRICT COURT 

FOR THE SOUTHERN DISTRICT OF OHIO 

WESTERN DIVISION 

 

UNITED STATES SECURITIES ) 

AND EXCHANGE COMMISSION, ) 

 ) 

 Plaintiff, ) 

 ) CASE NO. 1:01-cv-116 

v. ) 

 ) Judge Sandra S. Beckwith 

STEPHEN G. DONAHUE and ) 

DONAHUE SECURITIES, INC., ) 

 ) 

 Defendants. ) 

____________________________________) 

PLAINTIFF SECURITIES AND EXCHANGE COMMISSION’S MOTION TO 

REINSTATE CASE TO ACTIVE DOCKET

 Plaintiff United States Securities and Exchange Commission (“Commission”), 

by its attorneys, hereby moves this Court for an Order reinstating this case to the 

Court’s active docket in order for the Commission to file its Motion to Set Amount of 

Disgorgement, Distribute Receivership Assets and Dismiss Certain Claims and wind up 

the remaining litigation in this matter. In support of its Motion, the Commission states 

as follows: 

1. On February 26, 2001, this Court entered an Order permanently enjoining 

Defendant Stephen G. Donahue (“Donahue”) and preliminarily enjoining Defendant 

Donahue Securities, Inc. (“DSI”) from violating Section 17(a) of the Securities Act of 

1933 (“Securities Act”) [15 U.S.C. §77(q)(a)], Sections 10(b) and 15(c) of the 

Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. §78j(b) and 78o(c)] and 

Rules 10b-5 and 15c1-2 thereunder [17 C.F.R. §240.10b-5 and §240.15c1-2] for 

misappropriating their customers’ funds by representing that the funds would be 

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invested in a fictitious DSI tax free bond fund. This Order also required Donahue to 

disgorge his ill-gotten gains, with the specific amount to be set in a separate hearing, 

and found that the imposition of civil penalties against Donahue may be appropriate. 

2. The Court’s February 26, 2001 Orders left several items to be determined at a 

later date, including the amount of Donahue’s disgorgement, whether to impose civil 

penalties against Donahue, whether to impose a permanent injunction, disgorgement 

and civil penalties against DSI and how to distribute any assets held by the Receiver 

appointed in this matter.

3. On March 29, 2005, the Court entered an Order administratively closing this 

case. This Order also granted the parties leave to move to reinstate the case at such 

time in the future as the parties deem appropriate.

4. The Commission now plans to file a Motion with the Court seeking an Order 

setting the amount of Defendant Donahue’s disgorgement, finding that the amounts 

collected by the Receiver and Securities Investor Protection Corporation (“SIPC”) 

Trustee fully satisfy Donahue’s disgorgement obligation, allowing the Receiver to 

distribute the assets held in his client trust account and dismissing the Commission’s 

claim for civil penalties against Donahue and all of the Commission’s remaining claims

against DSI. This Motion would conclude the remaining litigation in this matter. 

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Case 1:01-cv-00116-SSB-TSH Document 107 Filed 08/03/2005 Page 2 of 3
WHEREFORE, the Commission requests that the Court enter an order 

reinstating this case to its active docket. 

Respectfully submitted, 

 

 s/ Anne C. McKinley 

 Anne C. McKinley, IL Bar No. 6270252 

 One of the Attorneys for Plaintiff 

 U.S. Securities and Exchange Commission 

 175 West Jackson Boulevard, Suite 900 

 Chicago, Illinois 60604 

 Telephone: (312) 353-7390 

 Facsimile: (312) 353-7398 

Dated: August 3, 2005 

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