UNITED STATES OF AMERICA
In the Matter of
A.S. GOLDMEN & CO., INC.,
ORDER MAKING FINDINGS,
On July 7, 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 Exchange Act of 1934 ("Exchange Act").
Respondent Duane P. Taylor ("Taylor") has submitted an Offer of Settlement ("Offer") that 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 findings herein, except as to the Commission's jurisdiction over him and the subject matter of these proceedings, Taylor consents to the entry of this Order Making Findings, Ordering Respondent to Cease and Desist and Imposing Remedial Sanctions as to Duane P. Taylor ("Order"), as set forth below.
On the basis of this Order and Taylor's Offer, the Commission finds: 1
Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder prohibit material misstatements or omissions in the offer or sale, or in connection with the purchase or sale of securities. SEC v. Texas Gulf Sulphur Co., 401 F.2d 833, 860-62 (2d Cir. 1968), cert. denied, 394 U.S. 976 (1969). Information is material if there is a substantial likelihood that a reasonable investor would consider the information to be important or to have significantly altered the total mix of information made available about the investment. Basic v. Levinson, 485 U.S. 224, 231-32 & 235 n.13 (1988). A broker must disclose material adverse information to a client when recommending the purchase or sale of a security. Hanly v. SEC, 415 F.2d 589, 597 (2d Cir. 1969). A showing of scienter -- "a mental state embracing intent to deceive, manipulate, or defraud" -- is required to establish a violation of Sections 17(a)(1), 10(b), and Rule 10b-5. Aaron v. SEC, 446 U.S. 680, 691 & 697 (1980); Ernst & Ernst v. Hochfelder, 425 U.S. 185, 194 n.12 (1976). Recklessness or willful disregard for the truth generally satisfies the scienter requirement. See e.g. SEC v. Falstaff Brewing Corp., 629 F.2d 62, 77 (D.C. Cir. 1980); Rolf v. Blyth Eastman Dillon & Co., 570 F.2d 38, 46 (2d Cir. 1978), cert. denied, 439 U.S. 1039 (1978). By engaging in the conduct described above, Taylor knowingly or recklessly made false or misleading statements and omitted to disclose material adverse information.
Based on the foregoing, Taylor willfully violated Section 17(a) of the Securities Act, Section 10(b) of the Exchange Act, and Rule 10(b)-5 thereunder.
Based on the foregoing, the Commission deems it appropriate and in the public interest to impose the sanctions specified in Taylor's Offer.
ACCORDINGLY, IT IS ORDERED that:
By the Commission.
Jonathan G. Katz
|1||The findings herein are made pursuant to Respondent's Offer of Settlement and are not binding on any other person or entity in this or any other proceeding.|
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