SECURITIES AND EXCHANGE COMMISSION
SECURITIES ACT OF 1933
SECURITIES AND EXCHANGE ACT OF 1934
INVESTMENT ADVISERS ACT OF 1940
The Commission has instituted public administrative and cease-and-desist proceedings pursuant to Section 8A of the Securities Act of 1933, Sections 15(b)(6), 19(h) and 21C of the Securities Exchange Act of 1934, and Sections 203(f) and 203(k) of the Investment Advisers Act of 1940 ("Advisers Act") against Raymond A. Parkins, Jr. ("Parkins"), a resident of Orlando, Florida. From at least 1993 through 1996, Parkins was president of The Parkins Investment Advisory Corporation ("Parkins Advisory"), an investment advisory firm formerly registered with the Commission, and The Parkins Investment Security Corporation ("Parkins Securities"), a broker-dealer formerly registered with the Commission. The proceedings are based upon allegations that from at least 1993 through 1996, Parkins, on at least 24 occasions, induced his investment advisory clients to switch their variable annuity investments by providing them with unfounded, false and misleading justifications for the switches, including false and misleading comparisons of the performances of certain variable annuities and false assurances that the switches would increase the diversification of his clients' portfolios. The staff further alleges in the Order that Parkins, in switch recommendation letters he sent to his clients, misrepresented or failed to inform his clients of the sales charges associated with the switches. As a result of Parkins' alleged fraudulent conduct, the staff alleges in the Order that his clients incurred unnecessary sales charges of more than $168,000, and, in some cases, lost a portion of their investment principal, and that Parkins Securities received commissions of more than $210,000.
The staff further alleges in the Order that Parkins aided and abetted and caused Parkins Advisory's violations of Sections 204, 206(1) and 206(1) of the Advisers Act and Rule 204-2(a)(7) promulgated thereunder.
A hearing will be scheduled to determine whether the staff's allegations are true, and if so, whether remedial sanctions and penalties should be imposed against Parkins.