In re WALTER V.

 UNITED STATES OF AMERICA 
 Before the 
 SECURITIES AND EXCHANGE COMMISSION 
 
SECURITIES ACT OF 1933 
Release No. 9361 / September 14, 2012 
 
SECURITIES EXCHANGE ACT OF 1934 
Release No. 67860 / September 14, 2012 
 
INVESTMENT ADVISERS ACT OF 1940 
Release No. 3464 / September 14, 2012 
 
INVESTMENT COMPANY ACT OF 1940 
Release No.  30202 / September 14, 2012 
 
ADMINISTRATIVE PROCEEDING 
File No.  3-  15024 
 
 
In the Matter of 
 
WALTER V. 
GERASIMOWICZ, 
MEDITRON ASSET 
MANAGEMENT,  LLC, 
MEDITRON 
MANAGEMENT GROUP, 
LLC,  
 
Respondents. 
 
 
 
 
ORDER INSTITUTING 
ADMINISTRATIVE AND CEASE-
AND-DESIST PROCEEDINGS 
PURSUANT TO SECTION 8A OF 
THE SECURITIES ACT OF 1933, 
SECTION 21C OF THE SECURITIES 
EXCHANGE ACT OF 1934, 
SECTIONS 203(e), 203(f) AND 203(k) 
OF THE INVESTMENT ADVISERS 
ACT OF 1940, AND SECTION 9(b) OF 
THE INVESTMENT COMPANY 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 Section 8A of the Securities Act of 1933 (“Securities 
Act”), Section 21C of the Securities Exchange Act of 1934 (“Exchange Act”), Sections 
203(e), 203(f) and 203(k) of the Investment Advisers Act of 1940 (“Advisers Act”), and 
Section 9(b) of the Investment Company Act of 1940 (“Investment Company Act”) against 
Walter V. Gerasimowicz (“Gerasimowicz”), Meditron Asset Management, LLC (“MAM”), 
and Meditron Management Group, LLC (“MMG”) (collectively, “Respondents”).   

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II. 
 
After an investigation, the Division of Enforcement alleges that: 
 
A. SUMMARY 
 
1. This matter involves misconduct by MAM, a registered investment adviser, 
its sole owner and principal, Gerasimowicz, and MMG, an unregistered investment adviser 
wholly owned by Gerasimowicz, for misappropriating and misusing client assets and 
repeatedly making material misrepresentations and omissions to clients.   
 
2. From at least September 2009 through September 2011, Gerasimowicz, 
MAM and MMG diverted approximately $2.65 million from their client, the Meditron 
Fundamental Value/Growth Fund, LLC (“Meditron Fund” or “Fund”), to prop up a private 
contracting company controlled by Gerasimowicz that is currently in Chapter 11 
bankruptcy proceedings.   
 
3. Gerasimowicz, MAM and MMG repeatedly lied or failed to disclose to 
Fund investors the dramatic deviations from the Fund’s stated investment strategy and 
deviations from the Fund’s disclosed valuation policy.  Gerasimowicz and MAM also 
failed to disclose the material conflict of interest posed by their own investments of 
approximately $2 million in SMC.   
 
4. Gerasimowicz also misrepresented MAM’s regulatory assets under 
management at $1.1 billion in published articles authored by Gerasimowicz and made 
available on Respondents’ website.     
 
5. MAM, aided and abetted by Gerasimowicz, violated the custody rule 
applicable to registered investment advisers by failing to distribute annual audited financial 
statements to Meditron Fund investors within the rule’s prescribed time periods. 
 
 B.  RESPONDENTS 
 
6. Gerasimowicz, age 60, is a resident of New York, New York.  He is the 
Chairman, Chief Executive Officer, Chief Compliance Officer, and sole owner of 
Respondent MAM, an investment adviser registered with the Commission, and is the sole 
owner of Respondent MMG, an unregistered investment adviser, through which he 
manages the Meditron Fund.  Gerasimowicz is also the founder and operating manager of 
Meditron Real Estate Partners, LLC (“MREP”), a private company,  and serves as President 
and Chairman of the Board of Directors of SMC Electrical Contracting Inc., a   private 
contracting company owned by MREP.   
 
7. MAM is a New York limited liability company and registered investment 
adviser with its principal place of business in New York, New York.  MAM has been 
registered with the Commission since April 9, 2003 and is wholly owned by 

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Gerasimowicz.  MAM claimed to have approximately $50 million in regulatory assets 
under management in its March 24, 2012 Form ADV filing, and claimed that 
approximately ten percent of its advisory clients also have invested in the Meditron Fund. 
 
8. MMG is a Delaware limited liability company, formed on March 14, 2003, 
and unregistered investment adviser with its principal place of business in New York, New 
York.  MMG is named as the Meditron Fund’s manager in the Fund’s offering documents 
and is wholly owned by Gerasimowicz.  MMG has no bank or brokerage accounts in its 
name, and advisory fees for managing the Meditron Fund are paid to MAM and, through 
MAM, to Gerasimowicz.   
 
 C. OTHER RELEVANT ENTITIES 
 
9. Meditron Fund, a Delaware limited liability company formed on March 
14, 2003, is a hedge fund managed by Gerasimowicz, MMG and MAM.  The Fund had 
approximately thirteen investors, several of whom are also MAM advisory clients, and 
claimed to have $4.2 million in assets under management as of MAM’s Form ADV filing 
on March 24, 2012.  The Meditron Fund has no board of directors or investment 
committee, and Gerasimowicz controls the Fund’s bank and brokerage accounts.  The 
Fund’s custodian was Goldman Sachs Execution & Clearing (“Goldman”) until 
approximately July 2010, and is currently Charles Schwab & Co., Inc.  
 
10. MREP, a Delaware limited liability company, was formed by 
Gerasimowicz on June 28, 2004 as a vehicle for potential investments in real estate 
ventures.  Gerasimowicz is the operating manager and MREP has no other employees.  In 
2007, MREP functioned as a vehicle for Gerasimowicz, the Meditron Fund, and certain 
individual MAM advisory clients to co-invest in SMC, which is MREP’s sole investment.   
 
11. SMC Electrical Contracting Inc. (“SMC”), a New York corporation, is a 
private contracting company with its principal place of business in New York, New York.  
SMC is owned by MREP.  Gerasimowicz serves as the President and Chairman of the 
Board of Directors of SMC.  On September 30, 2011, SMC filed a petition for relief under 
Chapter 11 of the Bankruptcy Code in the Bankruptcy Court for the Southern District of 
New York. 
 
D. MEDITRON FUND OFFERING AND RELATED DISCLOSURES 
 
12. Meditron Fund investors received the Fund’s Private Placement 
Memorandum (“PPM”), Operating Agreement, and subscription documents, as well as a 
one-page document detailing the Fund’s historical monthly and annual performance 
returns. 
 
13. The PPM stated that the Fund’s investment objective was to “seek to 
outperform the S&P 500 Index through the purchase of undervalued securities and their 
subsequent sale upon reaching price appreciation targets.  The Fund’s portfolio is normally 
comprised of 15 to 50 stocks with expected fair values considerably greater than their 

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current market prices.”  The PPM also disclosed that the “Fund’s portfolio may be heavily 
weighted in small and mid-cap issues, and is not necessarily composed of stocks which 
comprise the S&P 500.”  The PPM represented that the Fund would maintain “a diversified 
portfolio of long and short positions” with “controlled risk diversification of investments” 
and “positions will often be hedged selectively to reduce market risk and volatility.”   
 
14. The PPM represented that the Fund’s manager would select investments by 
using a “proprietary quantitative stock selection methodology centered upon fair value 
calculations” and that the Fund’s manager would also consider “other fundamental data 
such as corporate earnings and growth potential.”  The PPM also represented that the 
manager of the Fund would “compute[] weekly fair values of the securities.”   The PPM 
required the Fund manager to value the Fund’s publicly-traded securities based on market 
prices, or in the absence of such prices, based on prices “reasonably assigned by the 
Manager.”    
 
15. Although the Fund was obligated to pay Gerasimowicz and MMG an 
annual 1% management fee as well as an incentive allocation of 20% of annual net profits 
(along with payment for “investment-related expenses, such as brokerage commissions, 
clearing fees, interest, custodial fees, and similar expenses,” and “[o]rganizational expenses 
(including legal and accounting fees)”), these management fees were actually paid to 
Gerasimowicz and MAM.  
 
16.  While the Operating Agreement provided that any member or manager 
“may engage in and possess interests in other business ventures of any and every type and 
description,” it limited the ability of the Meditron Fund to transact business with any 
member or manager to circumstances where “the terms of those transactions are no less 
favorable than those the [Fund] could obtain from unrelated third parties.”   
 
E. THE SMC ACQUISITION 
 
17. In 2007, Gerasimowicz began raising capital through the offer and sale of 
limited partnership interests in MREP for the purpose of investing in SMC.  Respondents 
caused the Meditron Fund to invest $200,000 in MREP in June 2007.  During the same 
period, Gerasimowicz recommended and caused seven individual MAM advisory clients 
to purchase MREP limited partnership interests totaling $750,000, and Gerasimowicz 
personally invested $50,000 in MREP in May 2007.   
 
18. In July 2007, Gerasimowicz caused MREP to invest $1 million in SMC in 
exchange for a 50% ownership interest in SMC. 
 
19. In approximately September 2008, SMC fired its President and CEO.    In 
connection with his termination, the President and CEO agreed to allow MREP to acquire 
his 50% ownership interest in SMC at no additional cost, and MREP became the sole 
equity owner of the company.   
 

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F. MISAPPROPRIATION AND MISUSE OF MEDITRON FUND 
ASSETS 
 
20. Beginning at least by the fall of 2008, SMC experienced financial 
difficulties and Gerasimowicz and MAM began to prop up SMC using their own funds.  
Between approximately October 2008 and September 2011, when SMC filed for 
bankruptcy, Gerasimowicz and MAM provided over $2 million in funding to SMC.  
Neither Gerasimowicz nor MAM disclosed these investments in SMC to the Meditron 
Fund or to Fund investors. 
 
21. Beginning in approximately September 2009, Respondents began 
siphoning off Meditron Fund assets for the benefit of SMC.  Between September 2009 
and September 2011 (the “relevant period”), Gerasimowicz directed at least 36 separate 
transfers of Meditron Fund assets, totaling approximately $2.65 million, either to SMC or 
directly to SMC’s creditors in order to provide SMC with working capital.     
 
22. In order to obtain the money to make these transfers, Gerasimowicz sold 
publicly-traded, liquid securities held by the Meditron Fund.  Using the proceeds, 
between September 2009 and June 2010, Respondents directed six separate transfers, 
totaling $1.025 million, from the Meditron Fund’s brokerage account at Goldman, 
directly to SMC or for its benefit.  In the letters of authorization provided to Goldman, 
Gerasimowicz represented that the monies paid for the purchase of the following 
securities: 
 
• World Trade Center Memorial Development Bond at 12% 
• Erasmus High School Bond at 9% 
• Brooklyn High School Bond at 9% 
• Brooklyn PS 225K Bond at 8% 
 
23. The letters of authorization list the recipient of the funds as either SMC or 
MREP, which subsequently transferred the funds to SMC.       
 
24. The $1.025 million transferred from the Meditron Fund’s Goldman 
account, together with the Fund’s 2007 $200,000 investment in SMC through MREP, 
represented approximately 29% of the Fund’s assets as of June 30, 2010.   
 
25. In return for the six transfers between September 2009 and June 2010, the 
Meditron Fund received four promissory notes issued by SMC (the “Notes”).  The first 
Note was issued on December 20, 2009, for $500,000 at a 12% annual interest rate.  The 
second Note was issued on March 1, 2010 for $100,000 at a 9% annual interest rate.  The 
third Note was issued on June 6, 2010 for $225,000 at a 6% annual interest rate.  The 
fourth Note was issued on June 23, 2010 for $200,000 at an 8% annual interest rate.  All 
four Notes were issued for a five-year term and required no interest or principal payments 
until the end of that term.  To date, SMC has made no payments on the Notes, the first of 
which comes due in December 2014.   
 

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26. Between approximately September 2010 and September 2011, and on at 
least 30 separate occasions, Respondents diverted a total of approximately $1.63 million 
of Meditron Fund assets, either to SMC or for its benefit.   
 
27. The approximately $2.65 million transferred from the Meditron Fund to 
SMC between September 2009 and September 2011 represented approximately 80% of 
the Fund’s assets as of December 31, 2011.   
 
28. In making these “investments,” Respondents failed to perform the type of 
disciplined, quantitative-based investment selection strategy as promised in the PPM, or 
to take any other steps to protect the Meditron Fund’s interests in the SMC-related 
transactions.    
 
29. Gerasimowicz or MAM also did not assess whether the terms obtained by 
the Fund were “no less favorable than those the [Fund] could obtain from unrelated third 
parties,” as required by the Fund’s Operating Agreement.  As a matter of fact, however, 
SMC was unable to acquire funding on these terms from unrelated third parties. To the 
contrary, SMC was unable to obtain unrelated third-party financing unless Gerasimowicz 
agreed to personally guarantee repayment.   Furthermore, when SMC did manage to 
obtain a short-term loan for $190,000 from a friend of Gerasimowicz in February 2009, 
the firm paid an annualized interest rate of approximately 60%, significantly more than 
the 6%-12% range that Gerasimowicz unilaterally set for the Fund’s Notes.    
 
30. Investors continued to purchase membership interests in the Meditron 
Fund during the relevant period after Respondents began deviating from the Fund’s 
strategy and funneling Fund assets to SMC.  
 
31. Several of MAM’s advisory clients also invested in the Meditron Fund. 
 
32. On September 30, 2011, SMC filed a petition for relief under Chapter 11 
of the Bankruptcy Code in the Bankruptcy Court for the Southern District of New York.  
According to SMC’s bankruptcy financials, SMC’s net worth is negative and the business 
is insolvent with liabilities of between $8-$10 million and net assets of approximately $6-
$7 million including accounts receivable.   
 
33. SMC’s bankruptcy filing lists the Meditron Fund as a creditor holding an 
unsecured, nonpriority claim of $2.5 million against SMC for loans provided from 2007 
through 2011.   
 
34. Despite SMC’s bankruptcy and the fact that secured and other creditor 
claims totaling $3.2 million take priority over the Fund’s claims, Respondents continued 
to value the Fund’s SMC Notes and loans at cost.     
 

 7 
G. MISREPRESENTATIONS AND OMISSIONS TO FUND 
INVESTORS 
 
35. During the relevant period, Respondents solicited potential investors by 
means of material misrepresentations and omissions.  The Fund’s PPM represented that 
the Fund maintained a “diversified portfolio,” employed “controlled risk diversification” 
of investments, and hedged positions to “reduce market risk and volatility.”  According to 
the PPM, the Fund’s investment objective is to “seek to outperform the S&P 500 Index 
through the purchase of undervalued securities and their subsequent sale upon reaching 
price appreciation targets.  The Fund’s portfolio is normally comprised of 15 to 50 stocks 
with expected fair values considerably greater than their current market prices.” 
36. Although the PPM was originally issued in 2003, several years before the 
Fund first invested in SMC, investors continued to purchase membership interests in the 
Fund after Respondents began diverting Fund assets to SMC, and Respondents continued 
to provide potential investors with this same PPM, which misrepresented the Fund’s 
investment strategy.    
37. Respondents misrepresented and failed to disclose the fundamental change 
in the Fund’s investment strategy represented by the investment of the majority of its 
assets in SMC, a private company that ultimately filed for bankruptcy.   
 
38. Respondents misrepresented and failed to disclose to those MAM advisory 
clients who invested in the Meditron Fund the deviations from the Fund’s stated 
investment strategy and valuation processes as well as conflicts of interest resulting from 
their own economic interests in SMC.   
 
39. During the relevant period, Gerasimowicz prepared and sent quarterly 
newsletters on MMG stationery to Meditron Fund investors.  Each newsletter 
misrepresented to investors that generally Fund investments comprised between one and 
three percent of the Fund’s portfolio on an individual basis; that the Fund was well 
diversified both in terms of individual position as well as across market sectors; and that the 
Fund’s risk was comparable to bonds and lower than the overall market.  Each quarterly 
newsletter also listed the Fund’s “Top Ten Long Portfolio Positions.”  None of the listed 
positions ever represented more than five percent of the Fund’s overall portfolio.  Despite 
the Fund’s rapidly increasing and concentrated SMC position, the quarterly newsletters 
never disclosed the Fund’s SMC investment.  
 
40. During the relevant period, Gerasimowicz prepared and sent quarterly 
account statements on MAM stationery to Meditron Fund investors, listing the investor’s 
capital contribution(s), the investor’s net asset value (“NAV”) at the end of the quarter, 
the Fund’s quarterly return, and the S&P 500 quarterly return.  The statements provided 
no information about specific portfolio investments, or about the Fund’s investment in 
SMC.   
 
41. Contrary to Gerasimowicz’s representations to Fund investors, including 
those MAM advisory clients invested in the Fund, and contrary to the information 

 8 
provided to them in the offering documents, quarterly newsletters and account 
statements, Respondents misappropriated approximately $2.65 million of Meditron Fund 
assets to provide operating capital for SMC. 
   
42. Fund investors received no written disclosures concerning the 2010 
diversion of assets and the Fund’s rapidly increasing SMC position (approximately 40% 
of portfolio as of 2010 year-end) until at least December 2011, in the 2010 audited 
financial statements, by which time Respondents had diverted approximately 80% of the 
Fund’s portfolio to SMC.  Even this disclosure was only made to a subset of Fund 
investors, as some investors never received the 2010 audited financial statements and 
thus received no written disclosures concerning the Fund’s SMC position.  No written 
disclosures have been made concerning the 2011 diversion of Fund assets to SMC.  
 
43. The Fund’s audited financial statements claimed that the Fund employed a 
fair value methodology (pursuant to ASC 820) to value its investments.  Respondents 
rendered these disclosures false and misleading by failing to disclose that they never 
performed any valuation to value the Fund’s SMC position, nor did they “reasonably 
assign” a valuation to the SMC position as required under the PPM.  In fact, no valuation 
analysis was performed on the Fund’s SMC investments.  As reflected in the 2010 
audited financial statements, Respondents continued to value these investments at cost 
despite having no reasonable basis for doing so as SMC’s financial condition worsened 
and the company assumed increasing levels of debt.  Respondents continued to take 
management fees from the Fund based on the inflated NAV.     
 
44. Gerasimowicz did not disclose SMC’s September 2011 bankruptcy filing 
in his December 7, 2011 management representation letter provided to the auditor in 
connection with the audit of the Fund’s 2010 financial statements.  The failure to disclose 
the bankruptcy as a “subsequent event” in the notes to the 2010 audited financial 
statements is a material omission about an event that impaired a significant asset of the 
Fund.   
 
H. MISREPRESENTATIONS CONCERNING ASSETS UNDER 
MANAGEMENT 
 
45. Gerasimowicz misrepresented MAM’s assets under management in 
articles he wrote for Worth Magazine, which advertises itself as a wealth management 
magazine for high net worth individuals.  Specifically, Gerasimowicz authored ten 
separate magazine articles, dating from April 2010 to November 2011, which 
misrepresented MAM’s assets under management at $1.1 billion.  These articles were 
published in Worth Magazine and made available and accessible by hyperlinks on 
Respondents’ website.   

 9 
 
I. FAILURE TO COMPLY WITH ADVISERS ACT CUSTODY RULE 
 
46. During the relevant period, Meditron Fund investors did not receive 
quarterly account statements from the Fund’s qualified custodian.  Instead, investors 
received quarterly account statements from Respondents. 
 
47. During the relevant period, MAM was not subject to an annual surprise 
examination by an independent public accountant. 
 
48. During the relevant period, Gerasimowicz, MMG and MAM did not 
distribute annual, audited financial statements prepared in accordance with generally 
accepted accounting principles (“GAAP”) and audited by an independent public 
accountant that is registered with, and subject to regular inspection by, the Public 
Company Accounting Oversight Board (“PCAOB”) to all Meditron Fund investors 
within 120 days of the end of its fiscal year.     
 
49. The Fund’s 2008 audited financial statements were not completed until 
August 1, 2010.  The Fund’s 2009 audited financial statements were not completed until 
March 30, 2011.  The Fund’s 2010 audited financial statements were not completed until 
December 7, 2011.   
 
J. VIOLATIONS 
 
50. As a result of the conduct described above, Respondents willfully violated 
Section 17(a) of the Securities Act, Section 10(b) of the Exchange Act and Rule 10b-5 
thereunder, which prohibit fraudulent conduct in the offer and sale of securities and in 
connection with the purchase or sale of securities. 
 
51. As a result of the conduct described above, Respondents willfully violated 
Sections 206(1), (2) and (4) of the Advisers Act and Rule 206(4)-8 thereunder, which 
prohibit fraudulent conduct by an investment adviser. 
 
52. As a result of the conduct described above, Gerasimowicz willfully aided 
and abetted and caused MAM’s and MMG’s violations of Section 17(a) of the Securities 
Act, Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, and Section 206(4)   of 
the Advisers Act and Rule 206(4)-8 thereunder. 
 
53. As a result of the conduct described above, Gerasimowicz willfully aided 
and abetted and caused MAM’s violations of Section 206(4) of the Advisers Act, which 
prohibits fraudulent conduct by an investment adviser, and Rules 206(4)-1 and 206(4)-2 
promulgated thereunder, which provide that it shall constitute a fraudulent, deceptive, or 
manipulative act, practice, or course of business within the meaning of Section 206(4) for 
an investment adviser to, respectively, (i) directly or indirectly, publish, circulate, or 
distribute any advertisement which contains any untrue statement of a material fact, or 
which is otherwise false or misleading; or (ii) have custody of client funds or securities 

 10 
unless a qualified custodian maintains those funds and securities and, for pooled 
investment vehicles, the adviser distributes annual audited financial statements prepared 
in accordance with GAAP and audited by an independent public accountant registered 
with, and subject to regular inspection by, the PCAOB to all members or other beneficial 
owners of the pooled investment vehicle within 120 days of the end of its fiscal year. 
  
III. 
 
In view of the allegations made by the Division of Enforcement, the Commission 
deems it necessary and appropriate in the public interest that public administrative and 
cease-and-desist proceedings be instituted to determine: 
 
A.  Whether the allegations set forth in Section II hereof are true and, in 
connection therewith, to afford Respondents an opportunity to establish any defenses to such 
allegations;  
 
B.  What, if any, remedial action is appropriate in the public interest against 
Respondents MAM and MMG pursuant to Section 203(e) of the Advisers Act including, 
but not limited to, disgorgement and civil penalties pursuant to Section 203 of the Advisers 
Act; 
 
C. What, if any, remedial action is appropriate in the public interest against 
Respondent Gerasimowicz pursuant to Section 203(f) of the Advisers Act including, but not 
limited to, disgorgement and civil penalties pursuant to Section 203 of the Advisers Act;  
 
D. What, if any, remedial action is appropriate in the public interest against 
Respondents pursuant to Section 9(b) of the Investment Company Act including, but not 
limited to, disgorgement and civil penalties pursuant to Section 9 of the Investment 
Company Act; and   
 
E.  Whether, pursuant to Section 8A of the Securities Act, Section 21C of the 
Exchange Act, and Section 203(k) of the Advisers Act, Respondents should be ordered to 
cease and desist from committing or causing violations of and any future violations of  
Section 17(a) of the Securities Act, Section 10(b) of the Exchange Act and Rule 10b-5 
thereunder, Sections 206(1), 206(2), and 206(4) of the Advisers Act and Rules 206(4)-1, 
206(4)-2, and 206(4)-8 thereunder, whether Respondents should be ordered to pay a civil 
penalty pursuant to Section 8A(g) of the Securities Act, Section 21B(a) of the Exchange 
Act, and Section 203(i) of the Advisers Act, and whether Respondents should be ordered to 
pay disgorgement pursuant to Section 8A(e) of the Securities Act, Sections 21B(e) and 
21C(e) of the Exchange Act, and Section 203 of the Advisers Act. 
 
IV. 
 
IT IS ORDERED that a public hearing for the purpose of taking evidence on the 
questions set forth in Section III hereof shall be convened not earlier than 30 days and not 
later than 60 days from service of this Order at a time and place to be fixed, and before an 

 11 
Administrative Law Judge to be designated by further order as provided by Rule 110 of the 
Commission's Rules of Practice, 17 C.F.R. § 201.110.   
 
IT IS FURTHER ORDERED that Respondents shall file an Answer to the 
allegations contained in this Order within twenty (20) days after service of this Order, as 
provided by Rule 220 of the Commission's Rules of Practice, 17 C.F.R. § 201.220.  
 
If Respondents fail to file the directed answer, or fail to appear at a hearing after 
being duly notified, the Respondents may be deemed in default and the proceedings may be 
determined against them upon consideration of this Order, the allegations of which may be 
deemed to be true as provided by Rules 155(a), 220(f), 221(f) and 310 of the Commission's 
Rules of Practice, 17 C.F.R.  §§ 201.155(a), 201.220(f), 201.221(f) and 201.310. 
 
This Order shall be served forthwith upon Respondents personally or by certified 
mail. 
 
IT IS FURTHER ORDERED that the Administrative Law Judge shall issue an 
initial decision no later than 300 days from the date of service of this Order, pursuant to 
Rule 360(a)(2) of the Commission’s Rules of Practice. 
 
In the absence of an appropriate waiver, no officer or employee of the Commission 
engaged in the performance of investigative or prosecuting functions in this or any factually 
related proceeding will be permitted to participate or advise in the decision of this matter, 
except as witness or counsel in proceedings held pursuant to notice.  Since this proceeding is 
not “rule making” within the meaning of Section 551 of the Administrative Procedure Act, it 
is not deemed subject to the provisions of Section 553 delaying the effective date of any 
final Commission action. 
 
 By the Commission. 
 
 
 
        Elizabeth M. Murphy 
        Secretary 
 
 

UNITED STATES OF AMERICA 
 Before the 
 SECURITIES AND EXCHANGE COMMISSION 
 
SECURITIES ACT OF 1933 
Release No. 9361 / September 14, 2012 
 
SECURITIES EXCHANGE ACT OF 1934 
Release No. 67860 / September 14, 2012 
 
INVESTMENT ADVISERS ACT OF 1940 
Release No. 3464 / September 14, 2012 
 
INVESTMENT COMPANY ACT OF 1940 
Release No.  30202 / September 14, 2012 
 
ADMINISTRATIVE PROCEEDING 
File No.  3-15024 
 
 
In the Matter of 
 

WALTER V. 
GERASIMOWICZ, 
MEDITRON ASSET 
MANAGEMENT, LLC, 
MEDITRON 
MANAGEMENT GROUP, 
LLC,  

 
Respondents. 
 
 
 
 

ORDER INSTITUTING 
ADMINISTRATIVE AND CEASE-
AND-DESIST PROCEEDINGS 
PURSUANT TO SECTION 8A OF 
THE SECURITIES ACT OF 1933, 
SECTION 21C OF THE SECURITIES 
EXCHANGE ACT OF 1934, 
SECTIONS 203(e), 203(f) AND 203(k) 
OF THE INVESTMENT ADVISERS 
ACT OF 1940, AND SECTION 9(b) OF 
THE INVESTMENT COMPANY 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 Section 8A of the Securities Act of 1933 (“Securities 
Act”), Section 21C of the Securities Exchange Act of 1934 (“Exchange Act”), Sections 
203(e), 203(f) and 203(k) of the Investment Advisers Act of 1940 (“Advisers Act”), and 
Section 9(b) of the Investment Company Act of 1940 (“Investment Company Act”) against 
Walter V. Gerasimowicz (“Gerasimowicz”), Meditron Asset Management, LLC (“MAM”), 
and Meditron Management Group, LLC (“MMG”) (collectively, “Respondents”).   



 2 

 
II. 
 

After an investigation, the Division of Enforcement alleges that: 
 
A. SUMMARY 

 
1. This matter involves misconduct by MAM, a registered investment adviser, 

its sole owner and principal, Gerasimowicz, and MMG, an unregistered investment adviser 
wholly owned by Gerasimowicz, for misappropriating and misusing client assets and 
repeatedly making material misrepresentations and omissions to clients.   

 
2. From at least September 2009 through September 2011, Gerasimowicz, 

MAM and MMG diverted approximately $2.65 million from their client, the Meditron 
Fundamental Value/Growth Fund, LLC (“Meditron Fund” or “Fund”), to prop up a private 
contracting company controlled by Gerasimowicz that is currently in Chapter 11 
bankruptcy proceedings.   

 
3. Gerasimowicz, MAM and MMG repeatedly lied or failed to disclose to 

Fund investors the dramatic deviations from the Fund’s stated investment strategy and 
deviations from the Fund’s disclosed valuation policy.  Gerasimowicz and MAM also 
failed to disclose the material conflict of interest posed by their own investments of 
approximately $2 million in SMC.   

 
4. Gerasimowicz also misrepresented MAM’s regulatory assets under 

management at $1.1 billion in published articles authored by Gerasimowicz and made 
available on Respondents’ website.     

 
5. MAM, aided and abetted by Gerasimowicz, violated the custody rule 

applicable to registered investment advisers by failing to distribute annual audited financial 
statements to Meditron Fund investors within the rule’s prescribed time periods. 

 
 B.  RESPONDENTS 
 

6. Gerasimowicz, age 60, is a resident of New York, New York.  He is the 
Chairman, Chief Executive Officer, Chief Compliance Officer, and sole owner of 
Respondent MAM, an investment adviser registered with the Commission, and is the sole 
owner of Respondent MMG, an unregistered investment adviser, through which he 
manages the Meditron Fund.  Gerasimowicz is also the founder and operating manager of 
Meditron Real Estate Partners, LLC (“MREP”), a private company, and serves as President 
and Chairman of the Board of Directors of SMC Electrical Contracting Inc., a private 
contracting company owned by MREP.   

 
7. MAM is a New York limited liability company and registered investment 

adviser with its principal place of business in New York, New York.  MAM has been 
registered with the Commission since April 9, 2003 and is wholly owned by 



 3 

Gerasimowicz.  MAM claimed to have approximately $50 million in regulatory assets 
under management in its March 24, 2012 Form ADV filing, and claimed that 
approximately ten percent of its advisory clients also have invested in the Meditron Fund. 

 
8. MMG is a Delaware limited liability company, formed on March 14, 2003, 

and unregistered investment adviser with its principal place of business in New York, New 
York.  MMG is named as the Meditron Fund’s manager in the Fund’s offering documents 
and is wholly owned by Gerasimowicz.  MMG has no bank or brokerage accounts in its 
name, and advisory fees for managing the Meditron Fund are paid to MAM and, through 
MAM, to Gerasimowicz.   
 
 C. OTHER RELEVANT ENTITIES 
 

9. Meditron Fund, a Delaware limited liability company formed on March 
14, 2003, is a hedge fund managed by Gerasimowicz, MMG and MAM.  The Fund had 
approximately thirteen investors, several of whom are also MAM advisory clients, and 
claimed to have $4.2 million in assets under management as of MAM’s Form ADV filing 
on March 24, 2012.  The Meditron Fund has no board of directors or investment 
committee, and Gerasimowicz controls the Fund’s bank and brokerage accounts.  The 
Fund’s custodian was Goldman Sachs Execution & Clearing (“Goldman”) until 
approximately July 2010, and is currently Charles Schwab & Co., Inc.  

 
10. MREP, a Delaware limited liability company, was formed by 

Gerasimowicz on June 28, 2004 as a vehicle for potential investments in real estate 
ventures.  Gerasimowicz is the operating manager and MREP has no other employees.  In 
2007, MREP functioned as a vehicle for Gerasimowicz, the Meditron Fund, and certain 
individual MAM advisory clients to co-invest in SMC, which is MREP’s sole investment.   

 
11. SMC Electrical Contracting Inc. (“SMC”), a New York corporation, is a 

private contracting company with its principal place of business in New York, New York.  
SMC is owned by MREP.  Gerasimowicz serves as the President and Chairman of the 
Board of Directors of SMC.  On September 30, 2011, SMC filed a petition for relief under 
Chapter 11 of the Bankruptcy Code in the Bankruptcy Court for the Southern District of 
New York. 

 
D. MEDITRON FUND OFFERING AND RELATED DISCLOSURES 

 
12. Meditron Fund investors received the Fund’s Private Placement 

Memorandum (“PPM”), Operating Agreement, and subscription documents, as well as a 
one-page document detailing the Fund’s historical monthly and annual performance 
returns. 

 
13. The PPM stated that the Fund’s investment objective was to “seek to 

outperform the S&P 500 Index through the purchase of undervalued securities and their 
subsequent sale upon reaching price appreciation targets.  The Fund’s portfolio is normally 
comprised of 15 to 50 stocks with expected fair values considerably greater than their 



 4 

current market prices.”  The PPM also disclosed that the “Fund’s portfolio may be heavily 
weighted in small and mid-cap issues, and is not necessarily composed of stocks which 
comprise the S&P 500.”  The PPM represented that the Fund would maintain “a diversified 
portfolio of long and short positions” with “controlled risk diversification of investments” 
and “positions will often be hedged selectively to reduce market risk and volatility.”   

 
14. The PPM represented that the Fund’s manager would select investments by 

using a “proprietary quantitative stock selection methodology centered upon fair value 
calculations” and that the Fund’s manager would also consider “other fundamental data 
such as corporate earnings and growth potential.”  The PPM also represented that the 
manager of the Fund would “compute[] weekly fair values of the securities.”  The PPM 
required the Fund manager to value the Fund’s publicly-traded securities based on market 
prices, or in the absence of such prices, based on prices “reasonably assigned by the 
Manager.”    

 
15. Although the Fund was obligated to pay Gerasimowicz and MMG an 

annual 1% management fee as well as an incentive allocation of 20% of annual net profits 
(along with payment for “investment-related expenses, such as brokerage commissions, 
clearing fees, interest, custodial fees, and similar expenses,” and “[o]rganizational expenses 
(including legal and accounting fees)”), these management fees were actually paid to 
Gerasimowicz and MAM.  

 
16.  While the Operating Agreement provided that any member or manager 

“may engage in and possess interests in other business ventures of any and every type and 
description,” it limited the ability of the Meditron Fund to transact business with any 
member or manager to circumstances where “the terms of those transactions are no less 
favorable than those the [Fund] could obtain from unrelated third parties.”   

 
E. THE SMC ACQUISITION 
 
17. In 2007, Gerasimowicz began raising capital through the offer and sale of 

limited partnership interests in MREP for the purpose of investing in SMC.  Respondents 
caused the Meditron Fund to invest $200,000 in MREP in June 2007.  During the same 
period, Gerasimowicz recommended and caused seven individual MAM advisory clients 
to purchase MREP limited partnership interests totaling $750,000, and Gerasimowicz 
personally invested $50,000 in MREP in May 2007.   

 
18. In July 2007, Gerasimowicz caused MREP to invest $1 million in SMC in 

exchange for a 50% ownership interest in SMC. 
 
19. In approximately September 2008, SMC fired its President and CEO.  In 

connection with his termination, the President and CEO agreed to allow MREP to acquire 
his 50% ownership interest in SMC at no additional cost, and MREP became the sole 
equity owner of the company.   

 



 5 

F. MISAPPROPRIATION AND MISUSE OF MEDITRON FUND 
ASSETS 

 
20. Beginning at least by the fall of 2008, SMC experienced financial 

difficulties and Gerasimowicz and MAM began to prop up SMC using their own funds.  
Between approximately October 2008 and September 2011, when SMC filed for 
bankruptcy, Gerasimowicz and MAM provided over $2 million in funding to SMC.  
Neither Gerasimowicz nor MAM disclosed these investments in SMC to the Meditron 
Fund or to Fund investors. 

 
21. Beginning in approximately September 2009, Respondents began 

siphoning off Meditron Fund assets for the benefit of SMC.  Between September 2009 
and September 2011 (the “relevant period”), Gerasimowicz directed at least 36 separate 
transfers of Meditron Fund assets, totaling approximately $2.65 million, either to SMC or 
directly to SMC’s creditors in order to provide SMC with working capital.     

 
22. In order to obtain the money to make these transfers, Gerasimowicz sold 

publicly-traded, liquid securities held by the Meditron Fund.  Using the proceeds, 
between September 2009 and June 2010, Respondents directed six separate transfers, 
totaling $1.025 million, from the Meditron Fund’s brokerage account at Goldman, 
directly to SMC or for its benefit.  In the letters of authorization provided to Goldman, 
Gerasimowicz represented that the monies paid for the purchase of the following 
securities: 

 
• World Trade Center Memorial Development Bond at 12% 
• Erasmus High School Bond at 9% 
• Brooklyn High School Bond at 9% 
• Brooklyn PS 225K Bond at 8% 

 
23. The letters of authorization list the recipient of the funds as either SMC or 

MREP, which subsequently transferred the funds to SMC.       
 
24. The $1.025 million transferred from the Meditron Fund’s Goldman 

account, together with the Fund’s 2007 $200,000 investment in SMC through MREP, 
represented approximately 29% of the Fund’s assets as of June 30, 2010.   

 
25. In return for the six transfers between September 2009 and June 2010, the 

Meditron Fund received four promissory notes issued by SMC (the “Notes”).  The first 
Note was issued on December 20, 2009, for $500,000 at a 12% annual interest rate.  The 
second Note was issued on March 1, 2010 for $100,000 at a 9% annual interest rate.  The 
third Note was issued on June 6, 2010 for $225,000 at a 6% annual interest rate.  The 
fourth Note was issued on June 23, 2010 for $200,000 at an 8% annual interest rate.  All 
four Notes were issued for a five-year term and required no interest or principal payments 
until the end of that term.  To date, SMC has made no payments on the Notes, the first of 
which comes due in December 2014.   

 



 6 

26. Between approximately September 2010 and September 2011, and on at 
least 30 separate occasions, Respondents diverted a total of approximately $1.63 million 
of Meditron Fund assets, either to SMC or for its benefit.   

 
27. The approximately $2.65 million transferred from the Meditron Fund to 

SMC between September 2009 and September 2011 represented approximately 80% of 
the Fund’s assets as of December 31, 2011.   

 
28. In making these “investments,” Respondents failed to perform the type of 

disciplined, quantitative-based investment selection strategy as promised in the PPM, or 
to take any other steps to protect the Meditron Fund’s interests in the SMC-related 
transactions.   

 
29. Gerasimowicz or MAM also did not assess whether the terms obtained by 

the Fund were “no less favorable than those the [Fund] could obtain from unrelated third 
parties,” as required by the Fund’s Operating Agreement.  As a matter of fact, however, 
SMC was unable to acquire funding on these terms from unrelated third parties. To the 
contrary, SMC was unable to obtain unrelated third-party financing unless Gerasimowicz 
agreed to personally guarantee repayment.  Furthermore, when SMC did manage to 
obtain a short-term loan for $190,000 from a friend of Gerasimowicz in February 2009, 
the firm paid an annualized interest rate of approximately 60%, significantly more than 
the 6%-12% range that Gerasimowicz unilaterally set for the Fund’s Notes.   

 
30. Investors continued to purchase membership interests in the Meditron 

Fund during the relevant period after Respondents began deviating from the Fund’s 
strategy and funneling Fund assets to SMC.  

 
31. Several of MAM’s advisory clients also invested in the Meditron Fund. 
 
32. On September 30, 2011, SMC filed a petition for relief under Chapter 11 

of the Bankruptcy Code in the Bankruptcy Court for the Southern District of New York.  
According to SMC’s bankruptcy financials, SMC’s net worth is negative and the business 
is insolvent with liabilities of between $8-$10 million and net assets of approximately $6-
$7 million including accounts receivable.   

 
33. SMC’s bankruptcy filing lists the Meditron Fund as a creditor holding an 

unsecured, nonpriority claim of $2.5 million against SMC for loans provided from 2007 
through 2011.   

 
34. Despite SMC’s bankruptcy and the fact that secured and other creditor 

claims totaling $3.2 million take priority over the Fund’s claims, Respondents continued 
to value the Fund’s SMC Notes and loans at cost.     

 



 7 

G. MISREPRESENTATIONS AND OMISSIONS TO FUND 
INVESTORS 

 
35. During the relevant period, Respondents solicited potential investors by 

means of material misrepresentations and omissions.  The Fund’s PPM represented that 
the Fund maintained a “diversified portfolio,” employed “controlled risk diversification” 
of investments, and hedged positions to “reduce market risk and volatility.”  According to 
the PPM, the Fund’s investment objective is to “seek to outperform the S&P 500 Index 
through the purchase of undervalued securities and their subsequent sale upon reaching 
price appreciation targets.  The Fund’s portfolio is normally comprised of 15 to 50 stocks 
with expected fair values considerably greater than their current market prices.” 

36. Although the PPM was originally issued in 2003, several years before the 
Fund first invested in SMC, investors continued to purchase membership interests in the 
Fund after Respondents began diverting Fund assets to SMC, and Respondents continued 
to provide potential investors with this same PPM, which misrepresented the Fund’s 
investment strategy.    

37. Respondents misrepresented and failed to disclose the fundamental change 
in the Fund’s investment strategy represented by the investment of the majority of its 
assets in SMC, a private company that ultimately filed for bankruptcy.   

 
38. Respondents misrepresented and failed to disclose to those MAM advisory 

clients who invested in the Meditron Fund the deviations from the Fund’s stated 
investment strategy and valuation processes as well as conflicts of interest resulting from 
their own economic interests in SMC.   

 
39. During the relevant period, Gerasimowicz prepared and sent quarterly 

newsletters on MMG stationery to Meditron Fund investors.  Each newsletter 
misrepresented to investors that generally Fund investments comprised between one and 
three percent of the Fund’s portfolio on an individual basis; that the Fund was well 
diversified both in terms of individual position as well as across market sectors; and that the 
Fund’s risk was comparable to bonds and lower than the overall market.  Each quarterly 
newsletter also listed the Fund’s “Top Ten Long Portfolio Positions.”  None of the listed 
positions ever represented more than five percent of the Fund’s overall portfolio.  Despite 
the Fund’s rapidly increasing and concentrated SMC position, the quarterly newsletters 
never disclosed the Fund’s SMC investment.  

 
40. During the relevant period, Gerasimowicz prepared and sent quarterly 

account statements on MAM stationery to Meditron Fund investors, listing the investor’s 
capital contribution(s), the investor’s net asset value (“NAV”) at the end of the quarter, 
the Fund’s quarterly return, and the S&P 500 quarterly return.  The statements provided 
no information about specific portfolio investments, or about the Fund’s investment in 
SMC.   

 
41. Contrary to Gerasimowicz’s representations to Fund investors, including 

those MAM advisory clients invested in the Fund, and contrary to the information 



 8 

provided to them in the offering documents, quarterly newsletters and account 
statements, Respondents misappropriated approximately $2.65 million of Meditron Fund 
assets to provide operating capital for SMC. 

   
42. Fund investors received no written disclosures concerning the 2010 

diversion of assets and the Fund’s rapidly increasing SMC position (approximately 40% 
of portfolio as of 2010 year-end) until at least December 2011, in the 2010 audited 
financial statements, by which time Respondents had diverted approximately 80% of the 
Fund’s portfolio to SMC.  Even this disclosure was only made to a subset of Fund 
investors, as some investors never received the 2010 audited financial statements and 
thus received no written disclosures concerning the Fund’s SMC position.  No written 
disclosures have been made concerning the 2011 diversion of Fund assets to SMC.  

 
43. The Fund’s audited financial statements claimed that the Fund employed a 

fair value methodology (pursuant to ASC 820) to value its investments.  Respondents 
rendered these disclosures false and misleading by failing to disclose that they never 
performed any valuation to value the Fund’s SMC position, nor did they “reasonably 
assign” a valuation to the SMC position as required under the PPM.  In fact, no valuation 
analysis was performed on the Fund’s SMC investments.  As reflected in the 2010 
audited financial statements, Respondents continued to value these investments at cost 
despite having no reasonable basis for doing so as SMC’s financial condition worsened 
and the company assumed increasing levels of debt.  Respondents continued to take 
management fees from the Fund based on the inflated NAV.     

 
44. Gerasimowicz did not disclose SMC’s September 2011 bankruptcy filing 

in his December 7, 2011 management representation letter provided to the auditor in 
connection with the audit of the Fund’s 2010 financial statements.  The failure to disclose 
the bankruptcy as a “subsequent event” in the notes to the 2010 audited financial 
statements is a material omission about an event that impaired a significant asset of the 
Fund.   

 
H. MISREPRESENTATIONS CONCERNING ASSETS UNDER 

MANAGEMENT 
 
45. Gerasimowicz misrepresented MAM’s assets under management in 

articles he wrote for Worth Magazine, which advertises itself as a wealth management 
magazine for high net worth individuals.  Specifically, Gerasimowicz authored ten 
separate magazine articles, dating from April 2010 to November 2011, which 
misrepresented MAM’s assets under management at $1.1 billion.  These articles were 
published in Worth Magazine and made available and accessible by hyperlinks on 
Respondents’ website.   



 9 

 
I. FAILURE TO COMPLY WITH ADVISERS ACT CUSTODY RULE 
 
46. During the relevant period, Meditron Fund investors did not receive 

quarterly account statements from the Fund’s qualified custodian.  Instead, investors 
received quarterly account statements from Respondents. 

 
47. During the relevant period, MAM was not subject to an annual surprise 

examination by an independent public accountant. 
 
48. During the relevant period, Gerasimowicz, MMG and MAM did not 

distribute annual, audited financial statements prepared in accordance with generally 
accepted accounting principles (“GAAP”) and audited by an independent public 
accountant that is registered with, and subject to regular inspection by, the Public 
Company Accounting Oversight Board (“PCAOB”) to all Meditron Fund investors 
within 120 days of the end of its fiscal year.   

 
49. The Fund’s 2008 audited financial statements were not completed until 

August 1, 2010.  The Fund’s 2009 audited financial statements were not completed until 
March 30, 2011.  The Fund’s 2010 audited financial statements were not completed until 
December 7, 2011.   

 
J. VIOLATIONS 
 
50. As a result of the conduct described above, Respondents willfully violated 

Section 17(a) of the Securities Act, Section 10(b) of the Exchange Act and Rule 10b-5 
thereunder, which prohibit fraudulent conduct in the offer and sale of securities and in 
connection with the purchase or sale of securities. 

 
51. As a result of the conduct described above, Respondents willfully violated 

Sections 206(1), (2) and (4) of the Advisers Act and Rule 206(4)-8 thereunder, which 
prohibit fraudulent conduct by an investment adviser. 

 
52. As a result of the conduct described above, Gerasimowicz willfully aided 

and abetted and caused MAM’s and MMG’s violations of Section 17(a) of the Securities 
Act, Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, and Section 206(4) of 
the Advisers Act and Rule 206(4)-8 thereunder. 

 
53. As a result of the conduct described above, Gerasimowicz willfully aided 

and abetted and caused MAM’s violations of Section 206(4) of the Advisers Act, which 
prohibits fraudulent conduct by an investment adviser, and Rules 206(4)-1 and 206(4)-2 
promulgated thereunder, which provide that it shall constitute a fraudulent, deceptive, or 
manipulative act, practice, or course of business within the meaning of Section 206(4) for 
an investment adviser to, respectively, (i) directly or indirectly, publish, circulate, or 
distribute any advertisement which contains any untrue statement of a material fact, or 
which is otherwise false or misleading; or (ii) have custody of client funds or securities 



 10 

unless a qualified custodian maintains those funds and securities and, for pooled 
investment vehicles, the adviser distributes annual audited financial statements prepared 
in accordance with GAAP and audited by an independent public accountant registered 
with, and subject to regular inspection by, the PCAOB to all members or other beneficial 
owners of the pooled investment vehicle within 120 days of the end of its fiscal year. 

  
III. 

 
In view of the allegations made by the Division of Enforcement, the Commission 

deems it necessary and appropriate in the public interest that public administrative and 
cease-and-desist proceedings be instituted to determine: 

 
A.  Whether the allegations set forth in Section II hereof are true and, in 

connection therewith, to afford Respondents an opportunity to establish any defenses to such 
allegations;  

 
B.  What, if any, remedial action is appropriate in the public interest against 

Respondents MAM and MMG pursuant to Section 203(e) of the Advisers Act including, 
but not limited to, disgorgement and civil penalties pursuant to Section 203 of the Advisers 
Act; 

 
C. What, if any, remedial action is appropriate in the public interest against 

Respondent Gerasimowicz pursuant to Section 203(f) of the Advisers Act including, but not 
limited to, disgorgement and civil penalties pursuant to Section 203 of the Advisers Act;  

 
D. What, if any, remedial action is appropriate in the public interest against 

Respondents pursuant to Section 9(b) of the Investment Company Act including, but not 
limited to, disgorgement and civil penalties pursuant to Section 9 of the Investment 
Company Act; and   

 
E.  Whether, pursuant to Section 8A of the Securities Act, Section 21C of the 

Exchange Act, and Section 203(k) of the Advisers Act, Respondents should be ordered to 
cease and desist from committing or causing violations of and any future violations of  
Section 17(a) of the Securities Act, Section 10(b) of the Exchange Act and Rule 10b-5 
thereunder, Sections 206(1), 206(2), and 206(4) of the Advisers Act and Rules 206(4)-1, 
206(4)-2, and 206(4)-8 thereunder, whether Respondents should be ordered to pay a civil 
penalty pursuant to Section 8A(g) of the Securities Act, Section 21B(a) of the Exchange 
Act, and Section 203(i) of the Advisers Act, and whether Respondents should be ordered to 
pay disgorgement pursuant to Section 8A(e) of the Securities Act, Sections 21B(e) and 
21C(e) of the Exchange Act, and Section 203 of the Advisers Act. 

 
IV. 

 
IT IS ORDERED that a public hearing for the purpose of taking evidence on the 

questions set forth in Section III hereof shall be convened not earlier than 30 days and not 
later than 60 days from service of this Order at a time and place to be fixed, and before an 



 11 

Administrative Law Judge to be designated by further order as provided by Rule 110 of the 
Commission's Rules of Practice, 17 C.F.R. § 201.110.   

 
IT IS FURTHER ORDERED that Respondents shall file an Answer to the 

allegations contained in this Order within twenty (20) days after service of this Order, as 
provided by Rule 220 of the Commission's Rules of Practice, 17 C.F.R. § 201.220.  

 
If Respondents fail to file the directed answer, or fail to appear at a hearing after 

being duly notified, the Respondents may be deemed in default and the proceedings may be 
determined against them upon consideration of this Order, the allegations of which may be 
deemed to be true as provided by Rules 155(a), 220(f), 221(f) and 310 of the Commission's 
Rules of Practice, 17 C.F.R.  §§ 201.155(a), 201.220(f), 201.221(f) and 201.310. 

 
This Order shall be served forthwith upon Respondents personally or by certified 

mail. 
 
IT IS FURTHER ORDERED that the Administrative Law Judge shall issue an 

initial decision no later than 300 days from the date of service of this Order, pursuant to 
Rule 360(a)(2) of the Commission’s Rules of Practice. 

 
In the absence of an appropriate waiver, no officer or employee of the Commission 

engaged in the performance of investigative or prosecuting functions in this or any factually 
related proceeding will be permitted to participate or advise in the decision of this matter, 
except as witness or counsel in proceedings held pursuant to notice.  Since this proceeding is 
not “rule making” within the meaning of Section 551 of the Administrative Procedure Act, it 
is not deemed subject to the provisions of Section 553 delaying the effective date of any 
final Commission action. 

 
 By the Commission. 
 
 
 
        Elizabeth M. Murphy 
        Secretary 
 

 


	UNITED STATES OF AMERICA
	In the Matter of
	WALTER V. GERASIMOWICZ, MEDITRON ASSET MANAGEMENT, LLC, MEDITRON MANAGEMENT GROUP, LLC, 
	Respondents.
	C. OTHER RELEVANT ENTITIES
	D. MEDITRON FUND OFFERING AND RELATED DISCLOSURES
	I. FAILURE TO COMPLY WITH ADVISERS ACT CUSTODY RULE
	J. VIOLATIONS