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SECURITIES AND EXCHANGE COMMISSION
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In the Matter of the Application of FRANK THOMAS DEVINE
For Review of Disciplinary Action Taken by the NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC. |
ORDER DENYING MOTION FOR RECONSIDERATION
On October 30, 2002, the Commission sustained disciplinary action by the National Association of Securities Dealers, Inc. ("NASD") against Frank Thomas Devine, who was formerly employed as an investment company and variable contracts products representative with U.S. Life Equity Sales Corp. ("U.S. Life Equity"), an NASD member firm.1� Devine now requests reconsideration of the sanctions imposed.2�
The Commission found that Devine had engaged in private securities transactions without giving prior written notice to U.S. Life Equity in violation of NASD Conduct Rules 3040 and 2110. The Commission sustained the sanctions assessed by the NASD, fining Devine $34,825.42, suspending him for 90 days from association with any NASD member in any capacity, and requiringthat he requalify by examination as an investment company and variable contracts products representative. The NASD also assessed costs against him.
Devine alleges that our opinion erred in concluding that the sanctions imposed by the NASD were neither excessive or oppressive. As he did initially, Devine asserts that the bulletin from U.S. Life Corp.'s insurance subsidiary, All American Life Insurance Company ("All American"), was ambiguous as to whether U.S. Life Corp.'s representatives were permitted to sell viatical settlement products to persons who were not All American customers. Our opinion noted that the NASD considered the bulletin to be a mitigating factor when it sanctioned Devine and that we did not see any reason to reduce his sanction further.
Devine points to prior cases where, he asserts, "no suspension was warranted on facts either similar to [Devine's] or more egregious than those found in his case." However, as we have repeatedly held, the appropriate sanctions in a case cannot be determined by comparison with action taken in other cases. Rather, they depend on its particular facts and circumstances.3�The sanctions here were within the NASD Sanction Guidelines for violations of Conduct Rule 3040, which permit a fine of up to $50,000, a suspension of up to two years, or, in egregious cases, a bar. Devine ignored repeated indicia that the instruments he sold were securities, and so did not comply with his obligation to inform his firm of what he proposed to do.
Devine contends incorrectly that, in reviewing whether his sanctions should be reduced, we did not give proper consideration to the fact that he sold to only sophisticated, experienced purchasers, each of whom had a high net worth or that this was his first violation of the NASD's rules. We, in fact, did consider these contentions but, nevertheless, determined that the NASD's sanctions were not excessive, oppressive or a burden on competition.
We have considered the additional arguments raised by Devine and find them equally lacking in merit.
Accordingly, IT IS ORDERED that the motion for reconsideration filed by Frank Thomas Devine be, and it hereby is, denied.
By the Commission.
Jonathan G. Katz
Secretary
1 Frank Thomas Devine, Securities Exchange Act Release No. 46746 (Oct. 30, 2002), __ SEC Docket ____.
2Devine does not seek reconsideration of our conclusion that the instruments Devine sold were securities. He also does not dispute in his motion that he violated NASD Conduct Rules 3040 and 2110.
3 See, e.g., Howard R. Perles, Exchange Act Rel. No. 45691 (April 4, 2002), 77 SEC Docket 896, 914; A.S. Goldman & Co., Inc., Exchange Act Rel. No. 44328 (May 21, 2001), 75 SEC Docket 49, 69 n.53; and Keith S. Perkins, Exchange Act Rel. No. 43599 (Nov. 21, 2000), 73 SEC Docket 2784, 2790 n.12.
http://www.sec.gov/litigation/admin/34-46991.htm
| Home | Previous Page | Modified: 12/16/2002 |