-------------------- BEGINNING OF PAGE #1 ------------------- UNITED STATES OF AMERICA Before the SECURITIES AND EXCHANGE COMMISSION SECURITIES EXCHANGE ACT OF 1934 Release No. 36247 / September 19, 1995 ADMINISTRATIVE PROCEEDING File No. 3-8818 ______________________________ : In the Matter of : ORDER INSTITUTING : PROCEEDINGS, MAKING FINDINGS JOHN R. MOYSEY : AND IMPOSING REMEDIAL : SANCTIONS Respondent : _____________________________ : I. The Commission deems it appropriate and in the public interest that administrative proceedings be instituted pursuant to Sections 15(b) and 19(h) of the Securities Exchange Act of 1934 ("Exchange Act") against John R. Moysey ("Moysey"), a registered representative associated with a broker-dealer registered with the Commission. In anticipation of the institution of these proceedings, Moysey has submitted an Offer of Settlement ("Offer") which the Commission has determined to accept. Solely for the purposes of this proceeding and any other proceeding brought by or on behalf of the Commission or in which the Commission is a party, without admitting or denying the findings contained herein, except for those set forth in Subparagraph II.A. below, which are admitted, Moysey consents to the findings and the imposition of the remedial sanctions set forth below. Accordingly, IT IS ORDERED that proceedings against Moysey be, and hereby are, instituted. II. On the basis of this Order Instituting Public Proceedings, Making Findings and Imposing Remedial Sanctions ("Order") and the Offer submitted by Moysey, the Commission finds-[1]- that: A. Moysey has been a registered representative since 1969. From March 1985 through October 1990, Moysey was the branch office manager of the Bethesda, Maryland branch office of Dominick & Dominick, Inc. ("Dominick"), a broker- dealer registered with the Commission. As branch manager, Moysey was responsible for the supervision of the registered representatives in the Bethesda branch office. From October --------- FOOTNOTES --------- -[1]- The findings contained herein are pursuant to Moysey's offer of settlement and are not binding upon any other person in any other administrative proceeding. -------------------- BEGINNING OF PAGE #2 ------------------- 1990 through January 1991, Moysey was a registered representative associated with Dominick. REGISTERED REPRESENTATIVES' MISCONDUCT B. During the period in which Moysey supervised Dominick's Bethesda branch, certain registered representatives in that branch willfully violated Section 17(a) of the Securities Act of 1933 ("Securities Act"), Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. C. As part of the conduct described in Subparagraph II.B. above, from 1986 through June 1990, one registered representative of Dominick misappropriated approximately $300,000 from brokerage customers through a variety of fraudulent practices, including: 1. the opening of joint bank accounts in the names of both the representative and a customer using forged account signature cards; 2. the forging of a customer's signature on checks which were drawn on the customer's Dominick account at the representative's request; 3. the unauthorized cashing of customer checks, and the converting of the proceeds from these checks to his personal use; 4. the forging of customer signatures on margin agreements; 5. the unauthorized selling of securities in customer accounts; and 6. the concealing of his fraudulent conduct by submitting false address changes for customer accounts so that monthly statements, confirmations and other correspondence would be sent to addresses under the representative's control. Based upon the conduct described above, this registered representative pled guilty to criminal charges and served a fifteen-month prison sentence. D. As part of the conduct described in Subparagraph II.B. above, from 1987 through 1990, another registered representative of Dominick misappropriated approximately $75,000 from brokerage customers through a variety of fraudulent practices, including: 1. the forging of customer signatures on subscription and margin agreements, and other brokerage documents; 2. the forging of customer signatures on checks which were issued from customer accounts without their knowledge or authorization, and the -------------------- BEGINNING OF PAGE #3 ------------------- converting of the proceeds from these checks to his personal use; and 3. the unauthorized purchasing of securities for customers. Based upon the conduct described above, this registered representative pled guilty to criminal charges and served an eighteen-month prison sentence. E. As part of the conduct described in Subparagraph II.B. above, from approximately November 1987 through July 1990, another registered representative of Dominick defrauded a brokerage customer by: a. misappropriating approximately $343,000 from the customer through unauthorized liquidations of securities; and b. engaging in excessive trading of securities in the customer's account, thereby generating approximately $30,000 in improper commissions. Based upon the conduct described above, this registered representative was indicted on thirteen counts of wire fraud. FAILURE TO SUPERVISE F. Between 1986 and October 1990, Moysey failed reasonably to supervise certain registered representatives in Dominick's Bethesda, Maryland branch office with a view toward preventing their violations of Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, within the meaning of Section 15(b)(4)(E) of the Exchange Act. Moysey failed reasonably to supervise the registered representatives by, among other things: 1. Failing to enforce Dominick compliance procedures which prohibited registered representatives from receiving confirmations or checks for delivery to customers; 2. Failing to enforce Dominick compliance procedures which required that customer address changes be submitted in writing; and 3. Failing to monitor the activity in customer accounts with a view toward detecting and preventing registered representatives from engaging improper trading practices such as unauthorized and excessive trading. -------------------- BEGINNING OF PAGE #4 ------------------- III. On the basis of the foregoing, the Commission deems it appropriate and in the public interest to impose the sanctions specified in the Offer submitted by Moysey. Accordingly, IT IS HEREBY ORDERED THAT: Moysey be, and hereby is, barred from association with any broker, dealer, investment adviser, investment company, or municipal securities dealer, provided that, after two years, he shall have the right to re-apply in a non-supervisory, non- proprietary capacity to the appropriate self-regulatory organization, or if there is none, to the Commission. By the Commission. Jonathan G. Katz Secretary