UNITED STATES SECURITIES AND EXCHANGE COMMISSION

SEC ADMIN RELEASE 34-69950, IA RELEASE 40-3623, JULY 9, 2013: THE SECURITIES AND EXCHANGE COMMISSION ("COMMISSION") DEEMS IT APPROPRIATE AND IN THE PUBLIC INTEREST THAT PUBLIC ADMINISTRATIVE PROCEEDINGS BE, AND HEREBY ARE, INSTITUTED PURSUANT TO SECTION 15(B) OF THE SECURITIES EXCHANGE ACT OF 1934 ("EXCHANGE ACT") AND SECTION 203(F) OF THE INVESTMENT ADVISERS ACT OF 1940 ("ADVISERS ACT") AGAINST JOSEPH J. HENNESSY ("RESPONDENT" OR "RESPONDENT HENNESSY"). ON MAY 7, 2013, A JUDGMENT WAS ENTERED BY CONSENT AGAINST RESPONDENT HENNESSY, PERMANENTLY ENJOINING HIM FROM FUTURE VIOLATIONS OF SECTIONS 17(A) OF THE SECURITIES ACT OF 1933, SECTION 10(B) OF THE EXCHANGE ACT AND RULE 10B-5 THEREUNDER, AND SECTIONS 206(1), 206(2) AND 206(4) OF THE ADVISERS ACT AND RULE 206(4)-8(A)(1), IN CIVIL ACTION NUMBER 12-CV-9509, IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS.

Order

Bar (Permanent)

FROM ASSOCIATION WITH ANY BROKER, DEALER, IA, MUNICIPAL SECURITIES DEALER, MUNICIPAL ADVISOR, TRANSFER AGENT, OR STAT RATING ORG

Indefinite

7/9/2013

FROM PARTICIPATING IN ANY OFFERING OF A PENNY STOCK

Indefinite

7/9/2013

FINRA

RESPONDENT HENNESSY FAILED TO RESPOND TO FINRA REQUEST FOR INFORMATION.

LETTER

Bar (Permanent)

All Capacities

Indefinite

5/3/2013

PURSUANT TO FINRA RULE 9552(H) AND IN ACCORDANCE WITH FINRA'S INTENT TO SUSPEND AND NOTICE OF SUSPENSION LETTERS DATED JANUARY 31,2013 AND FEBRUARY 25,2013, RESPECTIVELY, ON MAY 3, 2013, HENNESSY IS BARRED FROM ASSOCIATION WITH ANY FINRA MEMBER IN ANY CAPACITY. HENNESSY FAILED TO REQUEST TERMINATION OF HIS SUSPENSION WITHIN THREE MONTHS OF THE DATE OF THE NOTICE OF INTENT TO SUSPEND; THEREFORE, HE IS AUTOMATICALLY BARRED FROM ASSOCIATION WITH ANY FINRA MEMBER IN ANY CAPACITY.

ILLINOIS

RESPONDENTS FAILED TO REPORT TO THE SECRETARY OF STATE THAT A DIRECT OWNER AND EXECUTIVE OFFICER OF RESPONDENT HLM, JAMES JOSEPH HENNESSY WAS THE SUBJECT OF THE SEC'S ONGOING CIVIL PROCEEDING

Order

Suspension

ALL CAPACITIES

UNTIL REVERSED BY THE SECRETARY OF STATE

UNTIL REVERSED BY THE SECRETARY OF STATE

3/14/2013

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

SEC LITIGATION RELEASE 22548, NOVEMBER 29, 2012: THE SECURITIES AND EXCHANGE COMMISSION FILED A COMPLAINT IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS AGAINST JOSEPH J. HENNESSY AND HIS FIRM, AN INVESTMENT ADVISER, FOR DEFRAUDING CLIENTS AND OTHERS WHO WERE PROMISED RETURNS THAT WOULD "BEAT THE MARKET" FOR INVESTING IN A PRIVATE EQUITY FUND THEY MANAGED. WHAT INVESTORS DIDN'T KNOW WAS THE FUND WAS FAILING AND THEY WERE BEING USED TO RAISE MONEY TO REPAY PROMISSORY NOTES TO EARLIER INVESTORS. THE SEC ALLEGES THAT HENNESSY AND THE FIRM RAISED MORE THAN $1.3 MILLION BY MISREPRESENTING THE FUND AS A VIABLE PRIVATE EQUITY FUND THAT COULD OFFER HIGH RETURNS. HENNESSY FAILED TO TELL INVESTORS ABOUT THE FUND'S POOR FINANCIAL CONDITION OR THAT THEIR MONEY WAS BEING USED TO REPAY FUND PROMISSORY NOTES THAT HE HAD PERSONALLY GUARANTEED. HE THEREFORE MISAPPROPRIATED CLIENT FUNDS TO MAKE PAYMENTS ON THE NOTES AND PROP UP THE FUND. ACCORDING TO THE SEC'S COMPLAINT, HENNESSY FINANCED THE FUND'S ACQUISITION OF ITS LARGEST PORTFOLIO COMPANY IN 2007 IN PART BY HAVING THE FUND ISSUE $1.65 MILLION IN PROMISSORY NOTES, ALL OF WHICH HE PERSONALLY GUARANTEED. WHEN THE FUND'S PORTFOLIO COMPANIES WERE UNABLE TO PAY MANAGEMENT FEES LATER THAT YEAR, THE FUND LACKED SUFFICIENT FUNDS TO REPAY THE NOTES. FROM SEPTEMBER 2007 TO MARCH 2010, HENNESSY RAISED $1.36 MILLION FROM FIRM CLIENTS AND OTHER INVESTORS TO MAKE PAYMENTS ON THE NOTES. HENNESSY FALSELY TOLD INVESTORS THAT THE FUND WAS VIABLE AND OFFERED HIGH RETURNS. THE SEC FURTHER ALLEGES THAT HENNESSY MISAPPROPRIATED MONEY FROM FIRM CLIENTS. IN NOVEMBER 2007, HE RAISED $750,000 FROM THREE FIRM CLIENTS PURPORTEDLY TO INVEST IN THE FUND. BUT THEN HENNESSY USED THAT MONEY TO REDEEM ANOTHER CLIENT'S INVESTMENT IN THE FUND. TWICE IN MID-2009, HENNESSY FORGED LETTERS OF AUTHORIZATION FROM A WIDOWED FIRM CLIENT TO TRANSFER $100,000 FROM HER ACCOUNT TO THE FUND IN EXCHANGE FOR PROMISSORY NOTES THAT HAVE YET TO BE REPAID. THE SEC'S COMPLAINT CHARGES HENNESSY WITH VIOLATING SECTION 17(A) OF THE SECURITIES ACT OF 1933, SECTION 10(B) OF THE SECURITIES EXCHANGE ACT OF 1934 AND RULE 10B-5. HENNESSY IS ALSO CHARGED WITH VIOLATING SECTIONS 206(1), (2) AND (4) OF THE INVESTMENT ADVISERS ACT OF 1940 AND RULE 206(4)-8.

Judgment Rendered

Injunction