And just for a bit of background, here's some on Puhrty/Quiel:
sec.gov
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
SECURITIES EXCHANGE ACT OF 1934
Rel. No. 39056 / September 11, 1997
Admin. Proc. File No. 3-9196
:
In the Matter of the Application of :
:
ROBERT A. QUIEL :
79013 Bayside Court :
Bermuda Dunes, California 92201 :
:
For Review of Disciplinary Action Taken by the :
:
NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC.:
:
OPINION OF THE COMMISSION
REGISTERED SECURITIES ASSOCIATION -- REVIEW OF DISCIPLINARY
PROCEEDING
Violation of Rules of Fair Practice
Failure to Provide Requested Information
General securities and financial principal associated with a member
firm of registered securities association failed to provide complete
information requested by association in connection with
investigations. Held, association's finding of violation and
sanctions it imposed are sustained.
APPEARANCES:
H. Thomas Fehn and Gregory J. Sherwin, of Fields, Fehn & Sherwin, for
Robert A. Quiel.
Norman Sue, Jr. and John F. Malitzis, for NASD Regulation, Inc.
Appeal filed: December 6, 1996
Last brief received: April 14, 1997
I.
Robert A. Quiel, a general securities and financial principal of
Monaco Securities, Inc. ("Monaco"), formerly known as Desert Mountain
Securities, Inc. ("Desert Mountain"), a member of the National Association
of Securities Dealers, Inc. ("NASD"), appeals from NASD disciplinary
action. <(1)> The NASD found that Quiel incompletely responded to
NASD requests for information and that he failed to cooperate with an NASD
investigation. The NASD determined that Quiel's conduct violated Article
III, Section 1 and Article IV, Section 5 of its Rules of Fair Practice
("Rules"). <(2)> The NASD censured Quiel, fined him $12,500,
suspended him for thirty days, and required him to requalify as a general
securities principal and as a general securities representative. We base
our findings on an independent review of the record.
II.
The parties do not dispute the pertinent facts. The NASD interviewed
Quiel on August 11, 1993 regarding his trading activity in Newport Carpet
Mills, Inc. ("NCM") securities. Among other things, Quiel testified that
he owned Quiel Securities, Inc. ("Quiel Securities"), which was inactive at
the time of the interview.
On February 24, 1994, NASD staff sent Quiel a letter, pursuant to
Article IV, Section 5, requesting that he provide information regarding an
investigation into NCM stock activity. The letter posed five questions and
enclosed documents to aid Quiel in responding to its requests. Among other
things, the letter asked that Quiel identify the "circumstances
surrounding" Quiel Securities' receipt and disposition of $89,245, state
whether he "provided or shared any amount deriving" from those funds, and
explain the "reasons behind such receipts and disbursements."
By letter dated March 14, 1994, Quiel replied that he had not located
the records necessary to answer the NASD's inquiries. He suggested that
the records "may" have been lost in a recent move, and he asked that the
NASD send him copies of its records in order to "expedite" his responses.
<(3)>
<(1)> The NASD's complaint in this matter consisted of two
causes of action. The second cause, from which this
appeal arises, alleged that Robert and Michael Quiel (a
registered representative of Monaco) failed to provide
information as the NASD requested. Only Robert Quiel's
appeal is before us.
<(2)> The NASD recently revised and renumbered its Rules of
Fair Practice. Article III, Section 1 [new Rule 2110]
requires that a member "observe high standards of
commercial honor and just and equitable principles of
trade" in conducting his business. Article IV, Section
5 [new Rule 8210] requires that a person associated
with a member firm report to the NASD with regard to
any matter involved in an NASD investigation.
<(3)> Quiel stated that, if he was "able to uncover [the]
records," he would answer the NASD's questions. He
responded briefly to the staff's additional inquiries
(continued...)
======END OF PAGE 2======
On May 19, 1994, the NASD forwarded Quiel copies of various financial
records and wire transfers that "indicat[ed] cash movements" referenced in
its February 24 letter. The NASD staff also renewed its request for
information regarding the funds received by Quiel Securities. The staff
further asked Quiel to send copies of the complaint and answer filed in a
suit that this Commission had brought against him. <(4)> In a June 6,
1994 reply, Quiel provided a copy of the order dismissing the suit without
prejudice, dated May 24, 1994, "in lieu of" the requested complaint and
answer. Quiel asserted that, because of the dismissal, it would be "moot"
to send copies of the other documents pertaining to the suit. Quiel
further asserted that he was "unable" to provide information relating to
Quiel Securities because of "misplaced" records, and that he could not
answer the staff's questions based on the documents sent by the NASD staff.
On November 28, 1994, the NASD sent Quiel a letter warning that the
staff had discovered "certain areas" that could result in formal
disciplinary action. The letter reiterated the staff's prior requests for
information, specified deficiencies in Quiel's previous responses, and
warned that his failure to provide information requested in connection with
an investigation appeared to violate the Rules. On December 19, 1994,
Quiel replied that he had answered the NASD's letters to the "best of [his]
ability." He also stated that his records "were lost and therefore [he]
was unable to supply whatever was requested." The District Business
Conduct Committee ("District Committee") subsequently determined that
Quiel's failure to provide information violated Article III, Section 1 and
Article IV, Section 5 of the Rules. Quiel appealed.
At a National Business Conduct Committee ("National Committee")
hearing on June 5, 1996, a panel member asked whether Quiel had any
information when he received the NASD's requests that would have helped him
answer them. In response, Quiel admitted that he had "partial" information
and that he "never indicated that [he] couldn't remember at all." Quiel
recalled that Quiel Securities may have received a total of $100,000 from
persons who were associated with NCM and other enterprises. He suggested
that the funds may have been a loan tied to a business enterprise in which
he was involved. He was uncertain whether the money related to NCM, but he
stated that he "believe[d] it possible" that the money "had nothing to do
with Newport Carpet."
Quiel also admitted that certain individuals could have assisted him
in responding to the NASD. He testified that he could not contact those
people when he received the NASD's request, but that subsequent to his
"meeting" with the District Committee, he "managed to get ahold" of them.
<(3)>(...continued)
regarding certain NCM sales literature. The NASD did
not inquire further regarding that material.
<(4)> The May 19 letter also recited that the requests were
pursuant to Article IV, Section 5 and enclosed a copy
of that Rule. The letter requested that Quiel respond
no later than June 3, 1994.
======END OF PAGE 3======
Quiel did not explain the cause of his temporary inability to locate or
communicate with these people, who included one of Desert Mountain's
registered representatives.
III.
NASD members and associated persons must cooperate fully with NASD
information requests so that it may perform its self-regulatory functions
effectively. <(5)> The NASD "should not have to bring a disciplinary
proceeding . . . in order to obtain compliance with its rules relating to
investigations." <(6)> Thus, under the Rules, a person who
incompletely responds to an NASD information request violates Article III,
Section 1 and Article IV, Section 5. <(7)>
We reject Quiel's assertions that he cooperated to the best of his
ability and that lack of information and documentation prevented his more
complete cooperation with the NASD's requests. Our decisions make clear
that, to find a violation of Article IV, Section 5, it is unnecessary to
find "an intentional or deliberate effort to withhold information."
<(8)> Further, even if Quiel could not access readily the information
that the NASD requested, we find that he failed to explain the deficiencies
in his responses or answer as completely as he was able.
Although the NASD furnished the documents that Quiel requested in his
March 14 letter, he replied that he was unable to "provide anything" in
response to the NASD's requests. Quiel's testimony at the National
Committee hearing indicates, however, that he possessed information that he
should have provided to the NASD investigators. Quiel admitted that he
could have supplied the NASD with "partial" information concerning the
source and purpose of the funds received by Quiel Securities. Among other
things, Quiel should have informed the NASD that he required the assistance
of others, and he should have provided those persons' identities.
<(5)> See Barry C. Wilson, Rel. No. 37867 (October 25, 1996),
63 SEC Docket 272, 276 (stating that a person
associated with a member firm has a duty to cooperate
with NASD investigators); Charles R. Stedman, 51 S.E.C.
1228, 1232 (1994); John A. Malach, 51 S.E.C. 618, 621
(1993); Michael David Borth, 51 S.E.C. 178, 180 (1992).
<(6)> Charles R. Stedman, 51 S.E.C. at 1232.
<(7)> See Barry C. Wilson, 63 SEC Docket at 276; Richard J.
Rouse, 51 S.E.C. 581, 588 (1993) ("Delay and neglect on
the part of members and their associated persons
undermine the ability of the NASD to conduct
investigations and thereby protect the public
interest.").
<(8)> Richard J. Rouse, 51 S.E.C. at 585 (stating that
members cannot counter information requests with
"inaction").
======END OF PAGE 4======
Additionally, in his June 6, and December 19, 1994 letters, Quiel
failed to detail the circumstances that had caused the "misplaced" or
"lost" records. Nor did he ever indicate any attempts he had made to
locate the records or the information they apparently contained. Instead,
in his December 19 letter, Quiel adopted an aggressive position with
respect to the investigators. He demanded to know how the NASD had
acquired the information it sent him on May 19, and he stated his belief
that the NASD had obtained the information in a "less than savory manner."
Quiel also erred when he substituted his judgment for that of the NASD
in his reply to the investigator's request for copies of documents and
information concerning this Commission's injunctive complaint against him.
We have stated that a member or associated person may not second guess the
NASD's requests. <(9)> Similarly, one may not "impose conditions" on
one's response to an NASD request. <(10)> Thus, a member or
associated person assumes at his peril that an objectively incomplete
response would satisfy an NASD investigative request.
We find that Quiel violated Article III, Section 1 and Article IV,
Section 5 of the Rules.
IV.
Quiel argues that the sanctions imposed by the National Committee were
inappropriate. We disagree. The National Committee considered the facts
that weighed in Quiel's
favor. <(11)> The National Committee recognized that he had given
<(9)> Mark Allen Elliott, 51 S.E.C. 1148, 1151 (1994);
Michael David Borth, 51 S.E.C. at 181.
The order dismissing the suit was entered only five days
after the NASD's request for the documents. The court had
granted the dismissal without prejudice. Thus, the lawsuit
could have been reinstituted. Quiel's assertion that "it
would be a moot point" to send copies of what the NASD
requested was unjustified. In his initial response,
moreover, Quiel did not suggest that he could not provide
the requested documents.
<(10)> Brian L. Gibbons, Rel. No. 37170 (May 8, 1996), 61 SEC
Docket 2597, 2601; Richard J. Rouse, 51 S.E.C. at 585;
Michael David Borth, 51 S.E.C. at 180.
<(11)> Quiel asserts that he honestly believed that his
response to the NASD's request for the law suit
documents would satisfy its request. We recognize that
the Commission's complaint and Quiel's answer are
public documents that the NASD could have obtained
independently. In evaluating Quiel's violations and
the sanctions imposed, we also have considered that the
(continued...)
======END OF PAGE 5======
testimony to the NASD staff and had partially responded to the request for
documents pertaining to this Commission's suit against him. The National
Committee imposed sanctions within the range set forth by the NASD Sanction
Guidelines. <(12)> Based on the circumstances here, we do not find
that the sanctions imposed are excessive or oppressive.
An appropriate order will issue. <(13)>
By the Commission (Chairman LEVITT and Commissioners WALLMAN, JOHNSON,
and HUNT).
Jonathan G. Katz
Secretary <(11)>(...continued)
NASD viewed the dismissal order as partially responsive
to its request for information regarding the status of
the suit.
<(12)> See NASD Sanction Guidelines (1996). "Failure to
Respond Completely" carries a potential monetary
sanction between $10,000 and $20,000 and a potential
suspension of between six months and two years,
particularly for a failure to respond in any respect.
The Guidelines also suggest consideration of
requalification by examination.
<(13)> We have considered all of the parties' contentions. We
have rejected or sustained them to the extent that they
are inconsistent or in accord with the views expressed
herein.
======END OF PAGE 6======
UNITED STATES OF AMERICA
before the
SECURITIES AND EXCHANGE COMMISSION
SECURITIES EXCHANGE ACT OF 1934
Rel. No.
Admin. Proc. File No. 3-9196
: In
the Matter of the Application of :
:
ROBERT A. QUIEL :
79013 Bayside Court :
Bermuda Dunes, California 92201 :
:
For Review of Disciplinary Action Taken by the :
: NATIONAL
ASSOCIATION OF SECURITIES DEALERS, INC.:
:
ORDER SUSTAINING DISCIPLINARY ACTION TAKEN BY REGISTERED SECURITIES
ASSOCIATION
On the basis of the Commission's opinion issued this day, it is
ORDERED that the disciplinary action taken by the National Association
of Securities Dealers, Inc. against Robert A. Quiel, and the Association's
assessment of costs, be, and they hereby are, sustained.
By the Commission.
Jonathan G. Katz
Secretary
Sorry about the formatting, but fixing it would take TOO long.. |
