SECURITIES ACT OF 1933
Release No. 8200 / March 13, 2003
SECURITIES EXCHANGE ACT OF 1934
Release No. 47496 / March 13, 2003
ADMINISTRATIVE PROCEEDING
File No. 3-10765
In the Matter of
J.W. BARCLAY & CO., INC. Respondents. |
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ORDER MAKING FINDINGS AND IMPOSING REMEDIAL SANCTIONS AND A CEASE-AND-DESIST ORDER PURSUANT TO SECTION 8A OF THE SECURITIES ACT OF 1933 AND SECTIONS 15(b) AND 21C OF THE SECURITIES EXCHANGE ACT OF 1934 AS TO EMANUELE A. SCARSO |
I.
On April 24, 2002, the Securities and Exchange Commission ("Commission") instituted public administrative proceedings pursuant to Section 8A of the Securities Act of 1933 ("Securities Act") and Sections 15(b) and 21C of the Securities Exchange Act of 1934 ("Exchange Act") against Respondent Emanuele A. Scarso ("Scarso" or "Respondent") and others. Scarso has submitted an Offer of Settlement ("Offer") which the Commission has determined to accept.
II.
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 him and the subject matter of these proceedings, Respondent consents to the entry of this Order Making Findings and Imposing Remedial Sanctions and a Cease-and-Desist Order Pursuant to Section 8A of the Securities Act of 1933 and Sections 15(b) and 21C of the Securities Exchange Act of 1934 as to Emanuele A. Scarso ("Order"), as set forth below.
III.
On the basis of this Order and Respondent's Offer, the Commission finds1 that:
Respondent
1. Scarso, age 30, has been a registered representative since October 1991. Scarso was associated as a registered representative with J.W. Barclay & Co., Inc. ("Barclay"), a broker-dealer registered with the Commission, between April 1996 and January 1998.
Scarso Defrauded Customers
2. During the time period from in or about June 1997 through in or about January 1998, Scarso engaged in the following conduct in the accounts of his customers at Barclay:
a. Scarso made unauthorized purchases and sales of securities in the account of at least one customer.
b. Scarso made unsuitable purchases and sales of securities in the accounts of at least two customers. He did so by recommending purchases or sales of securities that were not suitable for the customers in light of the customers' ages, investment experience, financial status, risk tolerance and investment objectives, and by conducting transactions on margin without ascertaining the customers' understanding of the risks associated with the use of margin, among other things.
c. Scarso failed to execute sell orders or follow other instructions from at least one customer, by failing to sell stock upon a customer's request.
3. Based on the foregoing, Scarso willfully violated Section 17(a) of the Securities Act in that he, in the offer or sale of securities, by use of the means or instruments of transportation or communication in interstate commerce or by use of the mails, directly or indirectly: employed devices, schemes or artifices to defraud; obtained money or property by means of untrue statements of material fact or omitted to state material facts necessary in order to make the statements made, in the light of the circumstance under which they were made, not misleading; or engaged in transactions, practices or courses of business which would or did operate as a fraud or deceit upon purchasers or prospective purchasers of such securities. As part of his fraudulent conduct, Scarso engaged in the activities described in paragraphs 2(a)-(c) above.
4. Based on the foregoing, Scarso willfully violated Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder in that he, in connection with the purchase or sale of securities, by use of the means or instrumentalities of interstate commerce or by use of the mails or of the facilities of any national securities exchange, directly or indirectly: employed devices, schemes or artifices to defraud; made untrue statements of material fact or omitted to state material facts necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading; or engaged in acts, practices or courses of business which would or did operate as a fraud or a deceit upon any person. As part of his fraudulent conduct, Scarso engaged in the activities described in paragraphs 2(a)-(c) above.
Undertakings
Respondent has undertaken to:
Provide the Commission, within thirty (30) days after the end of the twelve (12) month suspension period described below, an affidavit that he has complied fully with the sanctions described in Section IV. below.
IV.
In view of the foregoing, the Commission deems it appropriate and in the public interest to impose the sanctions specified in Respondent Scarso's Offer.
ACCORDINGLY, IT IS HEREBY ORDERED:
A. Pursuant to Section 8A of the Securities Act and Section 21C of the Exchange Act, that Respondent cease and desist from committing or causing any violations and any future violations of Section 17(a) of the Securities Act, Section 10(b) of the Exchange Act and Rule 10b-5 thereunder.
B. Pursuant to Section 15(b)(6) of the Exchange Act, Respondent be, and hereby is, suspended from association with any broker or dealer for a period of twelve (12) months, effective on the second Monday following the entry of this Order.
C. Respondent shall pay disgorgement and prejudgment interest in the total amount of $11,291.97 to the United States Treasury. Respondent shall also pay a civil money penalty in the amount of $25,000.00. Such payment shall be made within twenty (20) days of the entry of this Order. Such payments shall be: (A) made by United States postal money order, certified check, bank cashier's check or bank money order; (B) made payable to the Securities and Exchange Commission; (C) hand-delivered or mailed to the Office of Financial Management, Securities and Exchange Commission, Operations Center, 6432 General Green Way, Stop 0-3, Alexandria, VA 22312; and (D) submitted under cover letter that identifies Scarso as a Respondent in these proceedings, the file number of these proceedings, a copy of which cover letter and money order or check shall be sent to Kathryn A. Pyszka, Senior Trial Counsel, Securities and Exchange Commission, 175 West Jackson Boulevard, Ste. 900, Chicago, Illinois 60604.
D. Respondent shall comply with the undertakings enumerated in Section III. above.
By the Commission.
Jonathan G. Katz
Secretary
Footnotes
1 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.