From today's SEC Digest:
SEC SETTLES ADMINISTRATIVE PROCEEDINGS AGAINST A.S. GOLDMEN, ANTHONY MARCHIANO, AND FOUR FORMER BROKERS, AND BARS TEN OTHER FORMER GOLDMEN BROKERS ND EMPLOYEES BASED ON CRIMINAL CONVICTIONS
The Commission announced today that it has settled its administrative proceedings against A.S. Goldmen & Co., Inc. (Goldmen), Anthony J. Marchiano (Marchiano), Goldmen's former president and owner, and four former Goldmen brokers, John P. DelCioppo (DelCioppo), John T. Diasabeyagunawardena (a.k.a. John Abbey), Vincent J. Lia (Lia) and Duane P. Taylor (Taylor). The Commission also announced that it has barred ten other former Goldmen brokers and employees from future association with any broker or dealer. The bars, to which the respondents consented, were based on criminal convictions obtained by the Manhattan District Attorney's office (District Attorney) in its prosecution of massive fraud at Goldmen (People of New York v. A.S. Goldmen & Co., Inc., et al., Indictment No. 4772, 1999).
As a result of parallel investigations by the Division of Enforcement and the District Attorney, the Commission filed its Order Instituting Proceedings (Order) on July 7, 1999, alleging that the respondents engaged in various interrelated and illegal schemes between July 1994 and June 1998. The District Attorney charged 43 individuals, including Goldmen and the respondents in the Commission's administrative proceeding, with a wide range of state securities law offenses. On Sept. 1, 1999, the Commission stayed its administrative proceedings pending the criminal trial. The stay was lifted on July 29, 2002. Goldmen and Marchiano were both convicted of enterprise corruption and various other securities related offenses, and agreed to forfeit $8.5 million. Marchiano was sentenced to a maximum prison sentence of 10-30 years. DelCioppo, Abbey, Lia and Taylor all plead guilty, and were sentenced to incarceration.
In its Order, the Commission alleged that from at least April 1997 to April 1998, Goldmen and Marchiano conducted an unregistered offering of over 3 million shares of the common stock of Millennium Sports Management, Inc., a publicly-traded New Jersey corporation, to Goldmen's retail clients. The Commission also alleged that Marchiano orchestrated a scheme to market Millennium stock to Goldmen's retail clients through a variety of fraudulent and deceptive sales practices, and that DelCioppo, Abbey, Lia and Taylor knowingly or recklessly participated in this scheme. The Commission further alleged that Marchiano engaged in a scheme whereby he resolved client complaints by placing IPO warrants into the accounts of such complaining clients during various Goldmen IPOs and controlling the repurchase and resale of those warrants, as well as certain books and records violations against Goldmen.
Goldmen and Marchiano have agreed to consent, without admitting or denying any of the allegations against them, to the entry of an order by the Commission: (1) ordering that Goldmen cease and desist from committing or causing any violation or future violation of Sections 5 and 17(a) of the Securities Act of 1933 (Securities Act), Sections 10(b) and 17(a) of the Securities Exchange Act of 1934 (Exchange Act), Rules 10b-5, 17a-3 and 17a-4 thereunder, and Rule 101 of Regulation M; (2) revoking Goldmen's registration as a broker dealer; (3) ordering Marchiano to cease and desist from committing or causing any violation or future violation of Sections 5 and 17(a) of the Securities Act, Section 10(b) of the Exchange Act, Rule 10b-5 thereunder, and Rule 101 of Regulation M; (4) barring Marchiano from association with any broker or dealer; (5) barring Marchiano from participating in any offering of a penny stock; and (6) ordering Goldmen and Marchiano, jointly and severally, to pay disgorgement in the amount of
$150,000 into the District Attorney's criminal restitution fund.
DelCioppo, Abbey, Lia, and Taylor, all consented to the entry of orders by the Commission whereby each would cease and desist from violating Section 17(a) of the Securities Act, Section 10(b) of the Exchange Act and Section 10(b) thereunder, and to be barred from association with any broker dealer. In addition, the orders imposed disgorgement against DelCioppo, Abbey, and Lia in the amounts of $25,000, $33,000, and $8,000, respectively, but waive payment of such amounts and impose no civil penalty, based upon the sworn representations made by each in their Statement of Financial Condition other documents submitted to the Commission.
Ten other former Goldmen brokers and employees, who were not respondents in the Commission's administrative proceeding, consented to the entry of orders by the Commission whereby each agreed to be barred from association with any broker or dealer. They are Vincent Caracciolo, Stephen H. Kaplan, Salvatore C. Marchiano, John J. Messina, Stacey Meyers, Christopher D. Panza, Christopher J. Richardson, John Tripp Sines, III, Stephen E. Sokoloff and Erika Whitman. Each of these individuals, with the exception of Salvatore C. Marchiano, who was convicted by jury verdict, were convicted upon the entry of their pleas of guilty to criminal violations under New York state law involving the purchase or sale or securities. Based on their criminal convictions, the Commission ordered that they be barred from future association with any broker or dealer pursuant to Section 15(b) of the Securities Exchange Act of 1934. For additional information, see Securities Act Release No. 7698 and Exchange Act Release No. 41601 (July 7, 1999). (Rels. 33-8165, 34-47037, File No. 3-9933; 33-8166, 34-47038, File No. 3-9933; 33-8167, 34-47039, File No. 3-9933; 33-8168, 34-47040, File No. 3-9933; 33-8169, 34-47041, File No. 3-9933; 34-47042, File No. 3-10978; 34-47043, File No. 3-10979; 34-47044, File No. 3-10980; 34-47045, File No. 3-10981; 34-47046, File No. 3-10982; 34-47047, File No. 3-10983; 34-47048, File No. 3-10984; 34-47049, File No. 3-10985; 34-47050, File No. 3-10986; 34-47051, File No. 3-10987)
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