UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION

SECURITIES ACT OF 1933
Release No. 7800 / February 14, 2000

SECURITIES EXCHANGE ACT OF 1934
Release No. 42421 / February 14, 20000

ADMINISTRATIVE PROCEEDING
File No. 3-9959

In the Matter of DEL MAR FINANCIAL SERVICES, INC., KEVIN C. DILLS, PRIVATE BROKERS CORPORATION, ROBERT A. ROBERTS, MATTHEW R. JENNINGS, PHILIP S. BRANDON, and JAI CHAUDHURI, Respondents.

ORDER MAKING FINDINGS, ORDERING RESPONDENT TO CEASE AND DESIST, AND IMPOSING REMEDIAL SANCTIONS AS TO PHILIP S. BRANDON

I.

On August 2, 1999, the Securities and Exchange Commission ("Commission") instituted public administrative and cease-and-desist proceedings, pursuant to Section 8A of the Securities Act of 1933 ("Securities Act") and Sections 15(b)(4), 15(b)(6) and 21C of the Securities and Exchange Act of 1934 ("Exchange Act").

II.

Brandon has submitted an Offer of Settlement ("Offer"), which the Commission has determined to accept. 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 Commission's findings contained herein, except that Brandon admits that the Commission has jurisdiction over him and over the subject matter of this proceeding, Brandon, by his Offer, consents to the entry of this Order Making Findings, Ordering Respondent to Cease and Desist, and Imposing Remedial Sanctions as to Philip S. Brandon ("Order").

III.

On the basis of this Order and the Offer submitted by Brandon, the Commission makes the following findings:¹

A. Philip Sanford Brandon, age 56, is the former general manager and compliance officer for Del Mar Financial Services, Inc. ("Del Mar"). Brandon had no history in the securities industry prior to his affiliation with Del Mar in 1992. In 1989, Brandon pled guilty to misdemeanor commercial burglary, and was convicted in 1994 of the felony charges of Conspiracy to Defraud Another of Property and Grand Theft. Brandon was sentenced to 270 days of jail time and ordered to pay restitution of approximately $19,000. Based on this conviction, Brandon was suspended by the NASD in December 1996. Brandon is not currently employed in the securities industry. Brandon lives in San Diego, California.

B. In early May, 1996, the price of the stock of Comparator Systems Corporation ("Comparator") began to rise, after remaining virtually unchanged for several years. At that time, Del Mar's customers held more than 20 million shares of Comparator.

C. On May 3, 1996, as the price of Comparator was rising, Del Mar's registered representatives began soliciting their customers to sell their shares of Comparator. Although many customers did sell, Del Mar sold more stock to the market than it bought from its customers, thus creating a short position in a rising market. By the end of trading on May 6, 1996, Del Mar had a calculated loss of over $400,000 from trading in its proprietary account and still held an uncovered short position of over 500,000 shares. If Del Mar had covered its short position at the price of Comparator stock at its closing price on May 6 of $1 per share, Del Mar's losses on the remaining short position would have been more than an additional $500,000, or a total loss of over $900,000.

D. On May 7, 1996, Del Mar personnel, including Brandon, collected the brokers' copies of customer order tickets reflecting substantially all Comparator sales on May 3 and 6. On May 7, Del Mar personnel physically changed the customer tickets by crossing out the price at which the trade was executed on the original order ticket and entering a new, lower price for virtually all May 3 tickets reflecting trades of over 18.75 cents. The prices on the tickets were reduced to 18.75 cents from as high as 28 cents. Substantially all customer tickets reflecting trades made on May 6 were also changed. As a result of these changes, Del Mar's total trading loss, including the cost of covering the 500,000 share short position, was effectively eliminated, and the profit to Del Mar's customers was reduced by over $800,000.

E. From the changed order tickets, Del Mar's clearing broker generated confirmations falsely showing "corrections" to the execution prices, and those confirmations were mailed to Del Mar's customers. When customers called Del Mar to complain about the changed prices to their trades, Brandon falsely told them that the prices were changed as a result of market conditions or clerical error.

IV.

Section 17(a) of Securities Act, Sections 10(b) and 15(c)(1)(A) of the Exchange Act, and Rules 10b-5 and 15c1-2 thereunder prohibit fraud in connection with the offer, purchase, or sale of securities. Brandon was Del Mar's general manager when the order tickets were changed. Instead of taking appropriate steps with respect to the ongoing violations, Brandon, with knowledge of the fraud, furthered and provided substantial assistance to the fraud by collecting the order tickets from the registered representatives so that the changes could be made, and misleading Del Mar customers as to why the order tickets were changed.

Section 17(a) of the Exchange Act and Rule 17a-3 thereunder require a broker-dealer to maintain accurate books and records of the trades executed on behalf of its customers. Section 10(b) of the Exchange Act and Rule 10b-10 thereunder require a broker-dealer to provide its customers with accurate confirmations of the trades executed on their behalf. Del Mar executed trades on behalf of its customers but then created inaccurate records of those transactions which caused the confirmations of the trades to also be inaccurate. By collecting the order tickets from the registered representatives that were changed by Del Mar personnel and provided to the clearing broker, Brandon substantially assisted in the delivery to Del Mar's customers of inaccurate trade confirmations.

V.

Based on the foregoing, Brandon caused and willfully aided, abetted, counseled, commanded, or induced Del Mar's violations of Section 17(a) of the Securities Act, Sections 10(b), 15(c)(1)(A) and 17(a) of the Exchange Act and Rules 10b-5, 10b-10, 15c1-2 and 17a-3 thereunder.

VI.

Brandon has submitted a sworn financial statement and other evidence and has asserted his financial inability to pay a civil penalty. The Commission has reviewed the sworn financial statement and other evidence provided by Brandon and has determined that Brandon does not have the financial ability to pay a civil penalty.

VII.

Based on the foregoing, the Commission determines it appropriate and in the public interest to accept Brandon's Offer and to impose the sanctions that are set forth in the Offer.

Accordingly, pursuant to Section 8A of the Securities Act and Sections 15(b) and 21C of the Exchange Act, IT IS ORDERED:

A. That Brandon shall cease and desist from committing or causing any violation and any future violation of Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, and from causing any violation and future violation of Sections 15(c)(1)(A) and 17(a) of the Exchange Act and Rules 10b-10, 15c1-2 and 17a-3 thereunder.

B. That Brandon be, and hereby is, barred from association with any broker or dealer.

C. That the Division of Enforcement may at any time following the entry of this Order, petition the Commission to: (1) reopen this matter to consider whether Brandon provided accurate and complete financial information at the time such representations were made; (2) determine the amount of the civil money penalty to be imposed; and (3) seek any additional remedies that the Commission would be authorized to impose in this proceeding if Brandon's offer had not been accepted. No other issues shall be considered in connection with this petition other than whether the financial information provided by Brandon was fraudulent, misleading, inaccurate or incomplete in any material respect, the amount of the civil money penalty to be imposed and whether any additional remedies should be imposed. Brandon may not, by way of defense to any such petition, contest the findings in this Order or the Commission's authority to impose any additional remedies that were available in the original proceeding.

By the Commission.

___________________________
Jonathan G. Katz
Secretary

Footnotes

1 The findings of the Order are not binding on any other person or entity in this or any other proceeding.