UNITED STATES OF AMERICA
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE ACT OF 1934
Release No. 41944 / September 29, 1999
File No. 3-10050
In the Matter of :
CHRISTINE A. BEYER : ORDER INSTITUTING
: PROCEEDINGS, MAKING
Respondent. : FINDINGS, AND
: IMPOSING REMEDIAL SANCTIONS
The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest that public administrative proceedings be, and hereby are, instituted against Christine A. Beyer ("Beyer"), pursuant to Sections 15(b) and 19(h) of the Securities Exchange Act of 1934 ("Exchange Act").
In anticipation of the institution of this administrative proceeding, Beyer has submitted an Offer of Settlement ("Offer") which the Commission has determined to accept. Solely for the purpose of this proceeding and any other proceeding brought by or on behalf of the Commission or to which the Commission is a party, and without admitting or denying the findings contained herein, except the Commission's findings set forth in paragraphs III. A., III. B. and III. C. below, which Beyer admits, Beyer consents to the issuance of this Order Instituting Proceedings, Making Findings, and Imposing Remedial Sanctions ("Order").
Accordingly, it is ordered that an administrative proceeding be and hereby is instituted against Beyer pursuant to Sections 15(b) and 19(h) of the Exchange Act.
On the basis of this Order and the Offer, the Commission finds that:
A. Beyer was an independent floor broker on the New York Stock Exchange ("NYSE") from September 1992 to February 1998. From September 1992 through September 1996, Beyer conducted her floor brokerage business through Beyer Securities Corp., a broker-dealer registered with the Commission from September 1992 through September 1996. Beyer conducted her NYSE floor broker business in her own name from September 1996 to February 1998. Beyer has been registered with the Commission as a broker-dealer since September 1996.
B. On May 22, 1998, Beyer pleaded guilty to conspiracy to violate Section 11(a) and Rule 11a-1 and violating Section 10(b) and Rule 10b-5 in U.S. v. Christine A. Beyer, 98 Cr. 450 (S.D.N.Y).
C. On December 14, 1998, Beyer was permanently enjoined, on consent, by the United States District Court for the Southern District of New York in SEC v. R.M. Carucci Corp., et al., 96 Civ. 1366 (the "Injunctive Action"), from violating Section 17(a) of the Securities Act of 1933, Sections 11(a) and 10(b) of the Exchange Act and Rules 11a-1 and 10b-5 thereunder, NYSE Rules 90(a), 91, 92(a), 95(a), and 111(a) and aiding and abetting violations of Section 17(a)(1) of the Exchange Act and Rule 17a-3 thereunder.
D. The Commission's Amended Complaint in the Injunctive Action alleged, in part, as follows: Beyer entered into an illegal profit sharing arrangement with the principals of a non-NYSE member broker-dealer to engage in illegal trading on the floor of the NYSE. Pursuant to the arrangement, an account was opened at the non-member broker-dealer and falsely identified as a firm proprietary account, when, in fact, it was controlled by Beyer. From October 1993 through at least December 1996, as Beyer learned of potentially advantageous trading opportunities from her unique position on the floor of the NYSE, Beyer initiated and executed transactions for the account that she controlled at the non-NYSE member broker-dealer. On some occasions, Beyer executed transactions for this account while she or Beyer Securities Corp. held unexecuted customer orders for the same securities and she also filled customer orders by purchasing securities from, or selling securities to, her customers from the account she controlled at the non-NYSE member broker-dealer. Beyer agreed to split the profits from the activity in the account with the principals of the non-NYSE member broker-dealer, with Beyer receiving seventy percent of the profits and the principals of the non-NYSE member broker-dealer receiving thirty percent. To the extent the account suffered losses, Beyer and the principals of the non-NYSE member broker-dealer shared the losses in the same percentages. Various books and records, including order tickets, were falsified to conceal the true nature of the transactions.
Based upon the foregoing, it is in the public interest to impose the sanctions specified in the Offer. In determining to accept this offer, the Commission considered Beyer's cooperation afforded the Commission staff and the United States Attorney's Office for the Southern District of New York. Accordingly,
It is hereby ordered, effective immediately, that
(i) Beyer be, and hereby is, barred from association with any broker or dealer with the right to reapply for association after five years to the appropriate self-regulatory organization, or if there is none, to the Commission; and
(ii) Beyer's registration as a broker-dealer is revoked.
By the Commission.
Jonathan G. Katz