From today's SEC Digest:
ADMINISTRATIVE PROCEEDING INSTITUTED AGAINST BROKER-DEALER AND THREE OTHERS
On October 10, the Commission instituted a public administrative and cease and desist proceeding against Shamrock Partners, Ltd. (ROCK), James Kelly (Kelly), John Doyle (Doyle), and Stephen Fischer (Fischer). ROCK is a registered broker-dealer based in Media, Pennsylvania, Kelly is ROCK's owner, Doyle is ROCK's principal trader, and Fischer was a trader at a second brokerage firm. The Division of Enforcement alleges that during the summer of 1995, each respondent had a role in the stock manipulation of The L. L. Knickerbocker Co. Inc. (KNIC). From July 3 to August 11, 1995, KNIC's stock price rose from $6 to $52. Shortly thereafter the stock dropped 38%. The Division of Enforcement alleges that Kelly and ROCK engaged in secret sales that helped maintain KNIC's artificially high stock price, and that they failed reasonably to supervise Rafi Khan, a broker subject to their supervision during KNIC's price rise. The Division of Enforcement also alleges that Doyle, who acted as a KNIC market maker, had a collusive trading arrangement with Fischer, who also acted as a KNIC market maker at another brokerage firm, and that the arrangement contributed to KNIC's price rise. A hearing will be scheduled before an administrative law judge to determine whether the allegations are true and, if so, what, if any, remedial sanctions are appropriate. (Rels. 33-7909; 34-43425; File No. 3-10344)
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