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U.S. Securities and Exchange Commission

UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION

SECURITIES EXCHANGE ACT OF 1934
Release No. 41753 / August 18, 1999

ADMINISTRATIVE PROCEEDING
File No. 3-9977

In the Matter of

WELCO SECURITIES, INC.,
WILLIAM S. SHAPIRO and
KENNETH S. SHAPIRO,
Respondents.

ORDER INSTITUTING
PUBLIC PROCEEDINGS,
MAKING FINDINGS
AND IMPOSING
REMEDIAL SANCTIONS

I.

The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest that administrative proceedings be instituted pursuant to Sections 15(b) and 19(h) of the Securities Exchange Act of 1934 ("Exchange Act") against Welco Securities, Inc. ("Welco"), William S. Shapiro and Kenneth S. Shapiro.

In anticipation of the institution of these proceedings, Welco, William Shapiro and Kenneth Shapiro have submitted Offers of Settlement ("Offers") which the Commission has determined to accept. Solely for the purposes of these proceedings and any other proceedings brought by or on behalf of the Commission or in which the Commission is a party, Welco, William Shapiro and Kenneth Shapiro, by their Offers, consent, without admitting or denying the findings contained herein, except that they admit that the Commission has jurisdiction over them and over the subject matter of these proceedings and admit to the entry of an order of permanent injunction as set forth in subparagraph II.4. below, to the entry of this Order Instituting Public Proceedings, Making Findings and Imposing Remedial Sanctions ("Order").

Accordingly, IT IS ORDERED that administrative proceedings against Welco, William Shapiro and Kenneth Shapiro be, and hereby are, instituted.

II.

On the basis of this Order and the Offers, the Commission finds that:1

1.Welco Securities, Inc. is a broker-dealer which has been registered with the Commission since May 1983. The firm is located in Bala Cynwyd, Pennsylvania, a suburb of Philadelphia. Its primary source of income was derived from underwriting and subsequently selling securities issued by two affiliated companies, Walnut Equipment Leasing Company ("Walnut") and Equipment Leasing Corporation of America ("ELCOA"), a wholly owned subsidiary of Walnut.

2.William S. Shapiro, age 75, was, at all times relevant to this action, the owner, secretary, treasurer, financial/operational principal and a general securities principal of Welco. He was also the owner, CEO, CFO and a director of Walnut and the CEO, CFO and president of ELCOA.

3.Kenneth S. Shapiro, age 46, at all times relevant to this action, was the president and a general securities principal of Welco. He was the vice-president of both ELCOA and Walnut and a director of Walnut. He is the son of William Shapiro.

4.On August 17, 1999, Welco, William Shapiro and Kenneth Shapiro consented, without admitting or denying the allegations in the Commissionís complaint, to the entry of an order by the District Court for the Eastern District of Pennsylvania enjoining them from engaging in acts, transactions, practices and courses of business which violate Section 17(a) of the Securities Act of 1933 ("Securities Act"), Sections 10(b), 15(a) and 15(c) of the Exchange Act, and Rules 10b-5 and 15c1-2 thereunder. In addition, Welco and Kenneth Shapiro consented to the entry of an order enjoining them from engaging in acts, transactions, practices and courses of business which violate Section 17(a) of the Exchange Act and Rule 17a-3 thereunder. In its complaint, the Commission alleged, among other things, that William Shapiro and Kenneth Shapiro, through Welco, offered and sold approximately $60 million of securities issued by Walnut and ELCOA to their brokerage customers and that these investments, which involved a high degree of risk, were not suitable for all of these customers.

III.

On the basis of the foregoing, the Commission deems it appropriate and in the public interest to accept the Offers submitted by Welco, William Shapiro and Kenneth Shapiro and impose the sanctions specified therein. Accordingly,

IT IS HEREBY ORDERED THAT the registration of Welco is hereby revoked;

IT IS FURTHER ORDERED THAT William Shapiro be, and hereby is barred from association with any broker or dealer; and

IT IS FURTHER ORDERED THAT Kenneth Shapiro be, and hereby is barred from association with any broker or dealer.

By the Commission.

Jonathan G. Katz

Secretary


FOOTNOTES

1

The findings herein are made pursuant to Welco's, William Shapiro's and Kenneth Shapiro's Offers and are not binding on any other person or entity in this or any other proceeding.

http://www.sec.gov/litigation/admin/34-41753.htm


Modified:08/18/1999