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UNITED STATES OF AMERICA |
In the Matter of
J.W. BARCLAY & CO., INC. Respondents. |
: : : : : : : : : : : : : : : : |
ORDER MAKING FINDINGS AND IMPOSING REMEDIAL SANCTIONS AND A CEASE-AND-DESIST ORDER PURSUANT TO SECTION 8A OF THE SECURITIES ACT OF 1933 AND SECTIONS 15(b) AND 21C OF THE SECURITIES EXCHANGE ACT OF 1934 AS TO EMMANUEL P. CUBE |
I.
On April 24, 2002, the Securities and Exchange Commission ("Commission") instituted public administrative proceedings pursuant to Section 8A of the Securities Act of 1933 ("Securities Act") and Sections 15(b) and 21C of the Securities Exchange Act of 1934 ("Exchange Act") against Respondent Emmanuel P. Cube ("Cube" or "Respondent") and others. Cube has submitted an Offer of Settlement ("Offer") which the Commission has determined to accept.
II.
Solely for the purpose of these proceedings and any other proceedings brought by or on behalf of the Commission, or to which the Commission is a party, and without admitting or denying the findings herein, except as to the Commission's jurisdiction over him and the subject matter of these proceedings, Respondent consents to the entry of this Order Making Findings and Imposing Remedial Sanctions and a Cease-and-Desist Order Pursuant to Section 8A of the Securities Act of 1933 and Sections 15(b) and 21C of the Securities Exchange Act of 1934 as to Emmanuel P. Cube ("Order"), as set forth below.
III.
On the basis of this Order and Respondent's Offer, the Commission finds1 that:
Respondent
1. Cube, age 32, has been a registered representative since January 1994. Cube was associated as a registered representative with J.W. Barclay & Co., Inc. ("Barclay"), a broker-dealer registered with the Commission, from September 1994 through December 2000.
Cube Defrauded Customers
2. During the time period from in or about June 1997 through in or about December 1998, Cube engaged in the following conduct in the accounts of his customers at Barclay:
a. Cube made unauthorized purchases and sales of securities in the accounts of at least two customers.
b. Cube churned the account of at least one customer. He controlled the customer's account, and traded excessively in the customer's account in light of the customer's investment objectives. This churned account had an annualized turnover ratio of approximately 22.15, and an annualized break-even ratio of approximately 107.19%.
c. Cube made unsuitable purchases and sales of securities in the accounts of at least two customers. He did so by recommending purchases or sales of securities that were not suitable for the customers in light of the customers' ages, investment experience, financial status, risk tolerance and investment objectives, and by conducting transactions on margin without ascertaining the customers' understanding of the risks associated with the use of margin, among other things.
d. Cube failed to execute sell orders or follow other instructions from at least one customer, by failing to sell stock upon a customer's request.
3. Based on the foregoing, Cube willfully violated Section 17(a) of the Securities Act in that he, in the offer or sale of securities, by use of the means or instruments of transportation or communication in interstate commerce or by use of the mails, directly or indirectly: employed devices, schemes or artifices to defraud; obtained money or property by means of untrue statements of material fact or omitted to state material facts necessary in order to make the statements made, in the light of the circumstance under which they were made, not misleading; or engaged in transactions, practices or courses of business which would or did operate as a fraud or deceit upon purchasers or prospective purchasers of such securities. As part of his fraudulent conduct, Cube engaged in the activities described in paragraphs 2(a)-(d) above.
4. Based on the foregoing, Cube willfully violated Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder in that he, in connection with the purchase or sale of securities, by use of the means or instrumentalities of interstate commerce or by use of the mails or of the facilities of any national securities exchange, directly or indirectly: employed devices, schemes or artifices to defraud; made untrue statements of material fact or omitted to state material facts necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading; or engaged in acts, practices or courses of business which would or did operate as a fraud or a deceit upon any person. As part of his fraudulent conduct, Cube engaged in the activities described in paragraphs 2(a)-(d) above.
IV.
In view of the foregoing, the Commission deems it appropriate and in the public interest to impose the sanctions specified in Respondent Cube's Offer.
ACCORDINGLY, IT IS HEREBY ORDERED:
A. Pursuant to Section 8A of the Securities Act and Section 21C of the Exchange Act, that Respondent cease and desist from committing or causing any violations and any future violations of Section 17(a) of the Securities Act, Section 10(b) of the Exchange Act and Rule 10b-5 thereunder.
B. Pursuant to Section 15(b)(6) of the Exchange Act, Respondent be, and hereby is, barred from association with any broker or dealer with the right to reapply for association after five (5) years to the appropriate self-regulatory organization, or if there is none, to the Commission.
C. Respondent shall pay disgorgement and prejudgment interest in the total amount of $22,745.28 to the United States Treasury. Respondent shall also pay a civil money penalty in the amount of $27,000.00.
D. Respondent shall pay disgorgement, prejudgment interest, and the civil penalty plus postjudgment interest on the disgorgement and prejudgment interest pursuant to the following payment plan. Respondent shall pay $10,000 upon issuance of this Order. Respondent shall pay $12,773.56 within sixty (60) days of the date of issuance of this Order. Respondent shall next make four quarterly payments of $6750.00 each, which payments must be hand-delivered or post-marked no later than the 30th day of June, September, and December 2003, and one year from the date of issuance of the Order. Such payments shall be: (A) made by United States postal money order, certified check, bank cashier's check or bank money order; (B) made payable to the Securities and Exchange Commission; (C) hand-delivered or mailed to the Office of Financial Management, Securities and Exchange Commission, Operations Center, 6432 General Green Way, Stop 0-3, Alexandria, VA 22312; and (D) submitted under cover letter that identifies Cube as a Respondent in these proceedings, the file number of these proceedings, a copy of which cover letter and money order or check shall be sent to Kathryn A. Pyszka, Senior Trial Counsel, Securities and Exchange Commission, 175 West Jackson Boulevard, Ste. 900, Chicago, Illinois 60604.
E. Failure by Respondent to deliver any payment required by this Order on the dates prescribed and in the exact amounts due will, at the sole discretion of the Commission, render the entire remaining balance of the disgorgement, prejudgment interest and civil penalty amounts due and payable, and will constitute grounds for the Commission to institute proceedings against Respondent in federal district court to enforce compliance with the Commission's Order.
By the Commission.
Jonathan G. Katz
1 The findings herein are made pursuant to Respondent's Offer and are not binding on any other person or entity in this or any other proceeding.
http://www.sec.gov/litigation/admin/33-8201.htm
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