SECURITIES ACT OF 1933
Release No. 8435 / July 1, 2004

SECURITIES EXCHANGE ACT OF 1934
Release No. 49960 / July 1, 2004

INVESTMENT ADVISERS ACT OF 1940
Release No. 2255 / July 1, 2004

Admin. Proc. File No. 3-11534


In the Matter of

Mark Jackson Nichols,

Respondent.



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ORDER INSTITUTING ADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS, MAKING FINDINGS, AND IMPOSING REMEDIAL SANCTIONS AND A CEASE-AND-DESIST ORDER PURSUANT TO SECTION 8A OF THE SECURITIES ACT OF 1933, SECTIONS 15(b) AND 21C OF THE SECURITIES EXCHANGE ACT OF 1934 AND SECTION 203(f) OF THE INVESTMENT ADVISERS ACT OF 1940 AS TO MARK JACKSON NICHOLS

I.

The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest that public administrative and cease-and-desist proceedings be, and hereby are, initiated pursuant to Section 8A of the Securities Act of 1933 ("Securities Act"), Sections 15(b) and 21C of the Securities Exchange Act of 1934 ("Exchange Act") and Section 203(f) of the Investment Advisers Act of 1940 ("Advisers Act") against Mark Jackson Nichols ("Nichols" or "Respondent").

II.

In anticipation of the institution of these proceedings, Respondent has submitted an Offer of Settlement (the "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 in 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, Respondent consents to the entry of this Order Instituting Administrative and Cease-and-Desist Proceedings, Making Findings, and Imposing Remedial Sanctions and a Cease-and-Desist Order Pursuant to Section 8A of the Securities Act of 1933 and Sections 15(b) and 21C of the Securities Exchange Act of 1934 and 203(f) of the Investment Advisers Act of 1940 as to Mark Jackson Nichols ("Order"), as set forth below.

III.

On the basis of this Order and Nichols's Offer, the Commission finds that:

Respondent

1. Nichols, of Knoxville, Tennessee, was a registered representative from February 19, 1999, until May 4, 2000 in the Knoxville branch office of a securities firm registered with the Commission as a broker-dealer and as an investment adviser (the "firm").

Misconduct By Nichols

2. In the Spring of 2000, Nichols engaged in unauthorized trading in certain customer accounts, resulting in twelve customers losing approximately $2.8 million. In addition to making unauthorized stock purchases in these accounts, Nichols also made unauthorized sales from these accounts in an attempt to conceal losses as the value of the portfolios declined due to market conditions. Nichols did not tell his customers about these trades before placing the orders. In engaging in these trades, Nichols deliberately violated his employer's policies prohibiting unauthorized trading in customer accounts.

3. In addition, and in violation of the rules of the New York Stock Exchange and the National Association of Securities Dealers and his employer's policies, Nichols reimbursed one of his customers $17,000 for trading losses.

4. The firm discovered Nichols's misconduct in mid-April 2000. Nichols, knowing that he was about to be discharged, resigned from the firm in early May 2000.

Violations Of The Federal Securities Laws

5. Section 17(a) of the Securities Act prohibits the use of fraudulent practices in the offer or sale of securities. Section 10(b) of the Exchange Act and Rule 10b-5 thereunder prohibit the use of fraudulent practices in connection with the purchase or sale of securities. To prove a violation of Section 17(a)(1) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, the Commission must prove that the defendants acted with scienter. Aaron v. SEC, 446 U.S. 680, 691 (1980). Scienter is a state of mind embracing intent to deceive, manipulate or defraud. Id. at 685 n.5.

6. Unauthorized trading in a customer's account by a registered representative violates the antifraud provisions of both the Securities Act and the Exchange Act. See In the Matter of Sandra K. Simpson and Daphne Ann Pattee, Exchange Act Rel. No. 45923 (May 14, 2002), 77 SEC Docket 1983. As the Commission has stated, "[a] broker who trades in a customer's account without authorization commits fraud if there is accompanying deceptive conduct. The deceptive conduct element is met when the broker omits 'to inform the customer of the materially significant fact of the trade before it is made.'" Id. at 2001-02.

7. As a result of the conduct described above, Nichols willfully violated Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder.

Civil Penalties

8. Nichols has submitted a sworn Statement of Financial Condition dated December 8, 2003, and other evidence and has asserted his inability to pay a civil penalty.

IV.

In view of the foregoing, the Commission deems it appropriate and in the public interest to impose the sanctions specified in Nichols's Offer.

Accordingly, it is hereby ORDERED:

A. Pursuant to Section 8A of the Securities Act and Section 21C of the Exchange Act, Respondent Nichols 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; and

B. Pursuant to Section 15(b)(6) of the Exchange Act and Section 203(f) of the Advisers Act, Respondent Nichols be, and hereby is, barred from association with any broker, dealer or investment adviser.

Any reapplication for association by Nichols will be subject to the applicable laws and regulations governing the reentry process, and reentry may be conditioned upon a number of factors, including, but not limited to, the satisfaction of any or all of the following: (a) any disgorgement ordered against Nichols, whether or not the Commission has fully or partially waived payment of such disgorgement; (b) any arbitration award related to the conduct that served as the basis for the Commission order; (c) any self-regulatory organization arbitration award to a customer, whether or not related to the conduct that served as the basis for the Commission order; and (d) any restitution order by a self-regulatory organization, whether or not related to the conduct that served as the basis for the Commission order.

C. Based upon Nichols's sworn representations in his Statement of Financial Condition dated December 8, 2003, and other documents submitted to the Commission, the Commission is not imposing a penalty against Respondent.

D. The Division of Enforcement ("Division") may, at any time following the entry of this Order, petition the Commission to: (1) reopen this matter to consider whether Nichols provided accurate and complete financial information at the time such representations were made; and (2) seek an order directing payment of the maximum civil penalty allowable under the law. No other issue shall be considered in connection with this petition other than whether the financial information provided by Nichols was fraudulent, misleading, inaccurate, or incomplete in any material respect. Nichols may not, by way of defense to any such petition: (1) contest the findings in this Order; (2) assert that payment of a penalty should not be ordered; (3) contest the imposition of the maximum penalty allowable under the law; or (4) assert any defense to liability or remedy, including, but not limited to, any statute of limitations defense.

By the Commission.

Jonathan G. Katz
Secretary