Steven Ingrassia and Slava Volman
Securities Act of 1933
Release No. 8510 / December 7, 2004
Securities Exchange Act of 1934
Release No. 50816 / December 7, 2004
Admin. Proc. File No. 3 - 11487
In the Matter of STEVEN INGRASSIA and SLAVA VOLMAN, Respondents. |
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ORDER 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 |
I.
On May 14, 2004, 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) and 21C of the Securities Exchange Act of 1934 ("Exchange Act"), against Steven Ingrassia ("Ingrassia") and Slava Volman ("Volman") (collectively the "Respondents"). Respondents have submitted Offers of Settlement ("Offers") which the Commission has determined to accept.
II.
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 them and the subject matter of these proceedings, Respondents consent to the entry of this Order 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 ("Order"), as set forth below.
III.
On the basis of this Order and Respondents' Offers, the Commission finds1 that:
Respondents
1. Ingrassia is 44 years of age and resides in Central Islip, New York. In or around May 1999, Ingrassia and others entered into an agreement with Donald & Co. Securities, Inc. ("Donald & Co.") to open a Garden City branch office of Donald & Co. ("Garden City Office"). Ingrassia and others later established an office of supervisory jurisdiction ("OSJ") with Donald & Co. in Garden City, New York. Ingrassia and others ran the Donald & Co. OSJ as a partnership, and actively participated in the management of the office, including all personnel and business decisions. Ingrassia holds Series 7, 24, and 63 licenses.
2. Volman is 28 years old and resides in Brooklyn, New York. In or around May 1999, Volman and others entered into an agreement with Donald & Co. to open a Garden City branch office of Donald & Co. Volman and others later established an OSJ with Donald & Co. in Garden City, New York. Volman and others ran the Donald & Co. OSJ as a partnership, and actively participated in the management of the office, including all personnel and business decisions. Volman holds Series 4, 7, 24, 55, and 63 licenses.
Other Relevant Entity
3. Donald & Co. was registered with the Commission as a broker-dealer from May 25, 1977 until September 10, 2002 when Donald & Co. filed a Form BD-W. Donald & Co. was a member of the NASD. The firm's main office was located in Tinton Falls, New Jersey, and the firm maintained 10 branch offices. On July 24, 2002, Donald & Co. filed notice, pursuant to Rule 17a-11 of the Exchange Act that it was in a position of a net capital deficiency and closed its branch offices, including its Garden City Office.
Background
4. Respondents and others at Donald & Co. acquired large positions in The Classica Group, Inc. ("Classica") and eLEC Communications Corporation ("eLEC") at low prices. Respondents and others then instructed registered representatives working at Donald & Co.'s Garden City Office to solicit their clients to purchase Classica and eLEC at inflated prices. To persuade the brokers to push Classica and eLEC on their clients, Respondents and others, among other things, paid registered representatives undisclosed commissions.
5. Respondents and others also instructed registered representatives to make baseless predictions about the price of Classica and eLEC stock and other misleading statements about Classica and eLEC. Respondents and others also instructed brokers to tell customers falsely that favorable announcements about Classica and eLEC would be coming out shortly. While Respondents and others were telling the brokers to get their customers to purchase Classica and eLEC at inflated prices, he and others were selling it out of their own holdings at a profit.
6. Respondents and others, at times, refused to allow the brokers they controlled to execute customer orders to sell Classica and eLEC unless the sale could be made to another Garden City Office customer. According to Garden City Office policy, at times, if a client insisted that Classica or eLEC be sold, the broker was responsible for the shares until a buyer was found for those same shares.
7. Through their conduct, Respondents participated in the offering of the common stocks of Classica and eLEC, both "penny stocks" as that term is used in Section 15(b)(6) and as defined by Section 3(a)(51) of the Exchange Act and Rule 3a51-1 thereunder.
8. As a result of the conduct described above, Respondents willfully violated Section 17(a) of the Securities Act, Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, which prohibit fraudulent conduct in the offer or sale of securities and in connection with the purchase or sale of securities.
IV.
The Respondents' Offers do not include an agreement to pay disgorgement or penalties. The issue of disgorgement and penalties will be resolved at a later date. As a part of their Offers in this matter, Respondents agree that if Respondents fail to submit offers of settlement with respect to disgorgement and penalties that are acceptable to the Commission, then the Commission may reopen this proceeding against the Respondents for the purpose of resolving the issue of disgorgement and penalties. If the Commission reopens the proceedings, Respondents agrees that they will not contest the findings of fact or law in this Order as a basis for any Commission determination to order disgorgement or penalties that may be appropriate and in the public interest.
V.
In view of the foregoing, the Commission deems it appropriate and in the public interest to impose the sanctions specified in Respondents' Offers.
Accordingly, it is hereby ORDERED:
A. Pursuant to Section 8A of the Securities Act and Section 21C of the Exchange Act, that Respondents Ingrassia and Volman cease and desist from committing or causing any violations and any future violations of Section 17(a) of the Securities Act, Section 10(b) of the Exchange Act and Rule 10b-5 thereunder.
B. Pursuant to Section 15(b)(6) of the Exchange Act, that Respondents Ingrassia and Volman be, and hereby are, barred from association with any broker or dealer.
C. That Respondents Ingrassia and Volman be, and hereby are, barred from participating in any offering of a penny stock, including: acting as a promoter, finder, consultant, agent or other person who engages in activities with a broker, dealer or issuer for purposes of the issuance or trading in any penny stock, or inducing or attempting to induce the purchase or sale of any penny stock.
D. Any reapplication for association by the Respondents 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 the Respondents, 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.
By the Commission.
Jonathan G. Katz
Secretary