UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION
SECURITIES EXCHANGE ACT OF 1934
Release No. 40966 / January 22, 1999
ADMINISTRATIVE PROCEEDING
File No. 3-9817
: ORDER INSTITUTING A PUBLIC
In the Matter of : PROCEEDING PURSUANT TO SECTIONS
: 15(b)(6) AND 19(h) OF THE SECURITIES
: EXCHANGE ACT OF 1934, MAKING
Richard Marchese, : FINDINGS AND IMPOSING REMEDIAL SANCTIONS
:
I.
The Securities and Exchange Commission ("Commission") deems it
appropriate and in the public interest that a proceeding be
instituted pursuant to Sections 15(b)(6) and 19(h) of the Securities
Exchange Act of 1934 ("Exchange Act") with respect to Richard
Marchese, ("Marchese").
In anticipation of the institution of these proceedings,
Marchese has submitted to the Commission an Offer of Settlement which
the Commission has determined to accept. 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 of fact or conclusions of law,
except those contained in paragraphs III.A. and B. below, which are
admitted, Marchese consents to the entry of this Order Instituting a
Public Proceeding, Making Findings and Imposing Remedial Sanctions
("Order").
II.
Accordingly, IT IS ORDERED that a proceeding pursuant to
Sections 15(b)(6) and 19(h) of the Exchange Act is hereby instituted.
III.
On the basis of this Order and the Offer of Settlement submitted
by Marchese, the Commission finds that:
A. From at least 1987 through 1989, Marchese was president and
chief operating officer of Power Securities Corp.
("Power"). During the same period, Power was a broker-
dealer registered with the Commission pursuant to Section
15 of the Securities Exchange Act of 1934;
B. On December 23, 1998, in Securities and Exchange Commission
v. Power Securities Corporation, et al. (C.A. No. 90-S-
1579), the United States District Court for the District of
Colorado entered a final judgment permanently enjoining
Marchese from violating Section 17(a) of the Securities Act
of 1933, Section 10(b) of the Securities Exchange Act of
1934 and Rule 10b-5 promulgated thereunder; and
C. The Commission alleged in Securities and Exchange
Commission v. Power Securities Corporation, et al. (C.A.
No. 90-S-1579) that Marchese, during 1988, engaged in
repeated fraudulent conduct, including (1) directing that
registered representatives of Power make fraudulent
misrepresentations and omissions in connection with the
offer and sale to customers of several penny stocks, (2)
manipulating the market for the securities of Art Cards,
Inc. and Star Publications, Inc., both penny stocks, (3)
directing excessive markups of the prices of several penny
stocks sold by representatives of Power, and (4) failing to
disclose his control over the activities of Allied Capital
Group, another broker-dealer.
IV.
In view of the foregoing, it is in the public interest to impose
the sanctions specified in the Offer of Settlement.
Accordingly, IT IS ORDERED THAT:
A. Marchese is barred from association with any broker,
dealer, investment company, investment adviser or municipal
securities dealer; and
B. Marchese is barred from participation in any offering of
penny stock.
By the Commission.
Jonathan G. Katz
Secretary |
