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U.S. Securities and Exchange Commission

UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION

SECURITIES ACT OF 1933
Release No. 8166 / December 19, 2002

SECURITIES EXCHANGE ACT OF 1934
Release No. 47038 / December 19, 2002

ADMINISTRATIVE PROCEEDING
File No. 3-9933


In the Matter of

A.S. GOLDMEN & CO., INC.,
ANTHONY J. MARCHIANO,
STUART E. WINKLER,
JOHN T. DIASABEYAGUNAWARDENA,
(a.k.a. JOHN ABBEY)
JOHN P. DELCIOPPO,
CHRISTOPHER M. DELCIOPPO,
VINCENT J. LIA,
DUANE P. TAYLOR, AND
CHARLES TRENTO,

Respondents.


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ORDER MAKING FINDINGS,
ORDERING RESPONDENT TO
CEASE AND DESIST, AND
IMPOSING REMEDIAL SANCTIONS
AS TO DUANE P. TAYLOR

I.

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").

II.

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.

III.

On the basis of this Order and Taylor's Offer, the Commission finds: 1

FINDINGS

  1. Taylor, age 36, was a registered representative from February 1997 to April 1998 at A.S. Goldmen & Co. Inc. ("A.S. Goldmen"), a broker-dealer registered with the Commission, and at Southern Financial Group, Inc. from April 1998 to October 1998. Taylor is not currently employed in the securities industry. Taylor is a resident of Florida.

  2. On July 12, 2000, Taylor was convicted of two counts of securities fraud upon the entry of a jury verdict by the Supreme Court of the State of New York. Taylor was sentenced to imprisonment of six months and probation of four years and six months. Taylor's pretrial bail conditions have been continued pending the outcome of his appeal.

  3. During the period from at least July 1997 through April 1998, while a registered representative at A.S. Goldmen, Taylor knowingly or recklessly and willfully participated in a scheme to sell the stock of Millennium Sports Management, Inc. ("Millennium") through fraudulent and deceptive means. In connection with the offer, purchase or sale of Millennium stock to A.S. Goldmen retail clients, Taylor made untrue statements of material facts or omitted to state material facts necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading, and failed to disclose material adverse information.

IV.

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.

V.

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.

VI.

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:

  1. Pursuant to Section 8A of the Securities Act and Section 21C of the Exchange Act, Taylor shall cease and desist from committing or causing any violations and any future violations of Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder;

  2. Pursuant to Section 15(b)(6) of the Exchange Act, Taylor shall be, and hereby is, barred from association with any broker or dealer.

  3. If Respondent's conviction referenced above is reversed or vacated on appeal, the Division of Enforcement may petition the Commission to restore this proceeding to its active docket to consider whether and in what amount a civil money penalty should be imposed. Respondent may not, by way of defense to any such petition, contest the findings in this Order.

By the Commission.

Jonathan G. Katz
Secretary

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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.


http://www.sec.gov/litigation/admin/33-8166.htm


Modified: 12/20/2002