HE DUNIT-> INITIAL DECISION IN THE MATTER OF STEVEN MUTH, ET AL.
Issue 2004-196 October 12, 2004
ENFORCEMENT PROCEEDINGS
INITIAL DECISION IN THE MATTER OF STEVEN MUTH, ET AL.
An Administrative Law Judge has issued an Initial Decision finding that
Steven E. Muth (Muth) of Aurora, Colorado, formerly a registered
representative associated with Schneider Securities, Inc., (Schneider)
willfully violated Section 17(a) of the Securities Act of 1933, Section
10(b) of the Securities Exchange Act of 1934 (Exchange Act), and
Exchange Act Rule 10b-5. The Initial Decision finds that Muth
misrepresented material facts to, and engaged in sales practice
violations with, seven customers in connection with margin purchases of
Creative Host Services, Inc. (Creative) and Bonso Electronics
International, Inc. The Initial Decision orders Muth to cease and
desist from committing or causing his securities law violations, to
disgorge $14,204.75, plus prejudgment interest, and pay a civil penalty
of $2,090,000. On Aug. 20, 2004, the SEC barred Muth from association
with any broker or dealer based on an injunction entered by consent on
Aug. 9, 2004, by the U.S. District Court for the Southern District of
California. The complaint in the civil action charged Muth with
manipulating the market price of Creative.
The Initial Decision also finds that Richard J. Rouse (Rouse), the
former Executive Vice President and a Director of Schneider, failed
reasonably to supervise Muth with a view to preventing Muth’s
violations, within the meaning of Section 15(b)(4)(E) of the Exchange
Act. The Initial Decision bars Rouse from association with any broker
or dealer in any supervisory capacity with the right to reapply for
association after one year, suspends Rouse from association with any
broker or dealer in any capacity for nine months, and orders Rouse to
pay a civil penalty of $110,000. (Initial Decision No. 262; File No. 3-
11346) |
