Ross H. Mandell, formerly a registered representative with D. H. Blair & Co., Inc.,
nyse.com.
N E W Y O R K S T O C K E X C H A N G E, I N C.EXCHANGE HEARING PANEL DECISION 95-6January 17, 1995ROSS H. MANDELLREGISTERED REPRESENTATIVE* * *Effected transactions without customer knowledge or authorization;violated Rule 408(a) by accepting orders for customers from a person otherthan the customers without written authorization -- Consent to censure andsix weeks suspension.Appearances:For the Division of EnforcementFor the RespondentMargaret T. Roussel, Esq.Ronald D. Lefton, Esq.Lawrence B. Carlson, Esq.* * *An Exchange Hearing Panel met to consider a Stipulation of Facts and Consent to Penalty entered intobetween the Exchange's Division of Enforcement and Ross H. Mandell, formerly a registeredrepresentative with D. H. Blair & Co., Inc., Prudential-Bache Securities, Inc. and Rodman & Renshaw,Inc. Without admitting or denying guilt, Mr. Mandell consents to a finding by the Hearing Panel that he:I.Engaged in conduct inconsistent with just and equitable principles of trade by effectingtransactions in the accounts of customers of his member organization employer without suchcustomers' prior knowledge or authorization.II.Violated Exchange Rule 408(a) by accepting orders for transactions in the accounts ofcustomers of his member organization employer from a person other than the customers withoutfirst obtaining written authorization from the customers to do so.For the sole purpose of settling this disciplinary proceeding, the Division of Enforcement and Mr.Mandell stipulate to certain facts, the substance of which follows:1.Ross H. Mandell ("Mandell") was born in March 1957. He entered the securities industry inSeptember 1983, and he was approved by the Exchange as a registered representative effectiveJanuary 30, 1984. He remained with his first securities industry employer until April 1985, andwas with another member firm from April 1985 to August 1986. He was with D. H. Blair &Co., Inc. ("Blair") from August 1986 to September 1987 and with Prudential-Bache Securities,Inc. ("Prudential") from September 1987 to December 1987. Mandell was with non-memberfirms from January 1988 to February 1988, February 1988 to May 1988 and May 1988 toSeptember 1988, respectively. From September 1988 to October 1990, he was with Rodman
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& Renshaw, Inc. ("Rodman"). He was with other non-member firms from December 1990 toJuly 1992 and from July 1992 to August 1993. From August 1993 to December 1993 he waswith a member firm. In January 1994, he joined another non-member firm, where he remaineduntil September 1994. He was not employed in the securities industry in a registered capacityfrom September 1994 to October 1994. Since October 1994 he has been with anothermember firm.2.On or about November 15, 1990, the Exchange received a Uniform Termination Notice forSecurities Industry Registration (Form U-5) from Rodman reporting that Mandell's employmentwith Rodman had terminated on or about October 19, 1990.3.By letter dated October 28, 1991, which Mandell received shortly thereafter, the Exchangenotified Mandell that it was investigating certain matters which had occurred during hisemployment with a member organization.The Account of the Bs4.In or about October 1989, the Bs opened an account at Rodman (the "B Account"). Mandellbegan servicing the B Account in or about January 1990.5.The Bs never gave Mandell either verbal or written authorization to use discretionary power toeffect transactions in the B Account.6.On or about January 12, 1990, Mandell effected the purchase of 1,800 shares of XYZ in the BAccount, at an aggregate cost of $19,090, without the Bs' prior knowledge or authorization.7.Shortly thereafter, the Bs complained to Rodman that the transaction referred to in Paragraph 6above was unauthorized.The Account of the Hs8.In or about August 1989, the Hs opened an account at Rodman (the "H Account"). Mandellbegan servicing the H Account in or about January 1990.9.The Hs never gave Mandell either verbal or written authorization to use discretionary power toeffect transactions in the H Account.10.On or about February 13, 1990, Mandell effected the purchase of 4,000 shares of XYZ in theH Account, at an aggregate cost of $38,703, without the Hs' prior knowledge or authorization.11.Shortly thereafter, the Hs complained to Rodman that the transaction referred to in Paragraph10 above was unauthorized.The Account of M
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12.In or about August 1989, M opened an account at Rodman (the "M Account") with Mandell ashis registered representative.13.M never gave Mandell either verbal or written authorization to use discretionary power to effecttransactions in the M Account.14.On or about January 11, 1990, Mandell sold 800 UVW warrants from the M Account forproceeds of $18,644, and purchased 3,000 shares of RST for the M Account, at a cost of$17,717, without M's prior knowledge or authorization.15.M subsequently complained to the Securities and Exchange Commission that the transactionsreferred to in Paragraph 14 above were unauthorized.The Account of the Ds16.In or about January 1990, the Ds opened an account at Rodman (the "D Account"). Mandellbegan servicing the D Account in or about January 1990.17.The Ds never gave Mandell either verbal or written authorization to use discretionary power toeffect transactions in the D Account.18.Between March 19 and June 14, 1990, Mandell purchased approximately 58,500 shares ofOPQ in the D Account, at an aggregate cost of approximately $184,500, without the Ds' priorknowledge or authorization.19.Between March 20 and June 15, 1990, Mandell sold short a total of approximately 15,500UVW warrants in the D Account, for aggregate proceeds of approximately $347,267, withoutthe Ds' prior knowledge or authorization.20.Between March 22 and June 15, 1990, Mandell effected purchases covering the short sales ofUVW warrants referred to in Paragraph 19 above, at an aggregate cost of approximately$373,062, without the Ds' prior knowledge or authorization, resulting in a loss to the D Accountof approximately $25,795.21.On or about April 23, 1990, Mandell effected the purchase of 3,500 UVW warrants in the DAccount, at a cost of $69,427, without the Ds' prior knowledge or authorization.22.On or about April 26, 1990, Mandell effected the sale of the 3,500 UVW warrants referred toin Paragraph 21 above, for proceeds of $69,000, without the Ds' prior knowledge orauthorization.The J Family Accounts23.From August 1986 through February 1987, Mandell caused accounts to be opened at Blair inthe names of four related individual customers (collectively, the "J Family Customers").
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24.Each of the accounts referred to in Paragraph 23 above (the "J Family Accounts") was openedon the instructions of Mr. J, who had been a customer of Mandell since approximately 1984.25.The J Family Customers were Mr. J's wife, his mother, and his stepsons.26.In or about September 1987, the J Family Accounts were transferred from Blair to Prudentialwhen Mandell joined Prudential.27.Exchange Rule 408(a) provides, among other things that: "No ... employee of a memberorganization shall ... accept orders for an account from a person other than the customer withoutfirst obtaining written authorization of the customer."28.None of the J Family Customers gave Mandell written authorization to accept orders from Mr.J for their respective accounts at Blair or Prudential.29.Nevertheless, Mandell effected substantially all of the transactions in the J Family Accounts atBlair and Prudential on the instructions of Mr. J alone, without the written authorization of theindividual J Family Customers.30.In 1986 and 1987, there were more than 200 transactions in the J Family Accounts.Miscellaneous31.On October 19, 1994, the Division issued a Charge Memorandum alleging that Mandellengaged in the misconduct which is the subject of this Stipulation and Consent.DECISIONThe Hearing Panel, in accepting the Stipulation of Facts and Consent to Penalty, found Mr. Mandellguilty as set forth above by unanimous vote.PENALTYIn view of the above findings, the Hearing Panel, by unanimous vote, imposed the penalty consented toby Mr. Mandell of a censure and a suspension for a period of six weeks from membership, alliedmembership, approved person status, and from employment or association in any capacity with anymember or member organization.For the Hearing PanelMilton M. Stein
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Hearing Officer |
