UNITED STATES OF AMERICA
In the Matter of
|ORDER INSTITUTING ADMINISTRATIVE
PROCEEDINGS, MAKING FINDINGS AND
IMPOSING REMEDIAL SANCTIONS
PURSUANT TO SECTIONS 15(b) AND
19(h) OF THE SECURITIES
EXCHANGE ACT OF 1934
The Securities and Exchange Commission ("Commission") deems it appropriate in the public interest and for the protection of investors that administrative proceedings be instituted pursuant to Sections 15(b) and 19(h) of the Securities Exchange Act of 1934 ("Exchange Act") against Jonah Rosenblatt ("Rosenblatt").
In anticipation of the institution of these administrative proceedings, Rosenblatt has submitted an Offer of Settlement, which the Commission has determined to accept. Solely for purposes 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 jurisdiction of the Commission over him and the subject matter of these proceedings and the entry of the permanent injunction as described in paragraph II.D. below, which he admits, Rosenblatt consents to the entry of this Order Instituting Administrative Proceedings, Making Findings and Imposing Remedial Sanctions Pursuant to Sections 15(b) and 19(h) of the Securities Exchange Act of 1934 ("Order").
Accordingly, IT IS HEREBY ORDERED that public administrative proceedings be, and hereby are, instituted against Rosenblatt pursuant to Sections 15(b) and 19(h) of the Exchange Act.
On the basis of this Order and Rosenblatt's Offer of Settlement, the Commission finds that:
A. Rosenblatt, age 35 and a resident of Far Rockaway, New York, was, at all relevant times, an associated person of a broker-dealer registered with the Commission pursuant to Section 15(a) of the Exchange Act.
B. On May 26, 1999, the Commission filed a complaint in the United States District Court for the Southern District of New York captioned S.E.C. v. Cassano, et al, Civil Action No. 99-CV-3822 (LAK)(S.D.N.Y.), alleging, among other things, that, on June 2, 1995, Rosenblatt engaged in insider trading in violation of Section 14(e) of the Exchange Act and Rule 14e-3 thereunder in connection with transactions in the securities of Lotus Development Corporation ("Lotus").
C. Specifically, the Commission alleged that: (i) Rosenblatt caused six of his customers to purchase a total of ten June $30 Lotus call options and 15,400 shares of Lotus common stock on June 2, 1995, while possessing material nonpublic information relating to a plan by International Business Machines Corporation ("IBM") to commence a tender offer for Lotus, which he knew, or had reason to know, was non-public and came directly or indirectly from IBM or Lotus; and (ii) on June 5, 1995, when IBM publicly announced its intention to commence a tender offer for all of Lotus' outstanding common stock, Rosenblatt's tippees realized an aggregate profit of $481,650.
D. On June 13, 2000, a final judgment was entered against Rosenblatt by consent which: (i) permanently enjoined Rosenblatt from violating Section 14(e) of the Exchange Act and Rule 14e-3 thereunder; and (ii) held Rosenblatt liable for disgorgement and pre-judgment interest in the amount of $692,401, but waived payment of that amount and the imposition of a civil monetary penalty based on Rosenblatt's demonstrated financial inability to pay.
In view of the foregoing, the Commission deems it appropriate in the public interest and for the protection of investors to impose the sanctions specified in Rosenblatt's Offer of Settlement.
Accordingly, IT IS HEREBY ORDERED that Rosenblatt be, and hereby is, barred from association with any broker or dealer, with the right to reapply for association after three years to the appropriate self-regulatory organization, or if there is none, to the Commission.
By the Commission.
Jonathan G. Katz
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