THE COMMISSION INSTITUTES ADMINISTRATIVE PROCEEDINGS AGAINST FOUR BOILER-ROOM BROKERS CHARGED WITH FRAUD
The Commission today instituted public administrative and cease-and-
desist proceedings against respondents David Stetson (Stetson), Steven
Ingrassia (Ingrassia), Slava Volman (Volman), and Nicholas Antonelli
(Antonelli), and accepted settlement offers made by Stetson and
Antonelli. All four respondents were brokers associated with the Garden
City, New York branch office of Donald & Co. Securities, Inc. (Donald &
Co.), a brokerage firm that is now defunct. According to the orders
instituting the administrative proceedings, the Commission's Division of
Enforcement alleges and, in the case of Stetson and Ingrassia, the
Commission found that from 1999 through 2002, the respondents engaged in
fraudulent and manipulative practices involving two penny stocks, The
Classica Group, Inc. (Classica) and eLEC Communications Corporation
(eLEC), while working at the Garden City office of Donald & Co.
More specifically, the Commission's orders recite allegations or
findings that:
* During the relevant period, Stetson, Ingrassia and Volman ran
Donald & Co.'s Garden City office as a partnership and divided
profits. Stetson, Ingrassia and Volman also actively participated
in the management of the office. Antonelli was a registered
representative at the Garden City office during part of the
relevant period.
* While at Donald & Co., Stetson, Ingrassia and Volman directed and
otherwise engaged in fraudulent schemes with respect to Classica
and eLEC securities that involved, among other things, the
following elements: (a) the dissemination of false and misleading
information to customers about the issuers through boiler-room
tactics and inflated price predictions that had no basis in fact;
(b) refusal to execute customer sell orders unless the shares could
be cross traded with another Garden City office customer; and (c)
payment of undisclosed compensation, known there as the "rip," to
other brokers for selling the stock.
* While at Donald & Co., Antonelli solicited investors to purchase
Classica stock. In connection with those solicitations, Antonelli:
(i) made inflated price predictions and misleading statements about
Classica, (ii) opened accounts without authorization, and (iii)
received excessive undisclosed commissions for causing investors to
purchase Classica stock. Antonelli also refused to execute orders
to sell Classica unless the sale could be made to another Garden
City office customer.
The Commission simultaneously accepted offers of settlement made by
Stetson and Antonelli. In accordance with their settlement offers, the
Commission ordered that Stetson and Antonelli: (i) cease and desist
from committing or causing violations of the relevant antifraud
provisions; (ii) are permanently barred from associating with any broker
or dealer; and (iii) are permanently barred from participating in any
offering of a penny stock. Stetson and Antonelli consented to the
issuance of the orders without admitting or denying the Commission's
findings.
In the proceedings against Ingrassia and Volman, a hearing will be
scheduled before an Administrative Law Judge to determine whether the
allegations against them are true, to provide them with an opportunity
to respond to the allegations, and to determine what, if any, remedial
sanctions are appropriate and in the public interest. (Steven
Ingrassia and Slava Volman - Rels. 33-8420; 34-49701; File No. 3-11487);
(Nicholas Antonelli - Rel. 34-49702; File No. 3-11488); (David Stetson -
Rel. 34-49703; File No. 3-11489) |
