UNITED STATES OF AMERICA
|In the Matter of
DEAN H. HARRIS
|ORDER INSTITUTING PUBLIC PROCEEDINGS PURSUANT TO SECTIONS 15(b)(6) AND 19(h) OF THE SECURITIES EXCHANGE ACT OF 1934, MAKING FINDINGS AND IMPOSING REMEDIAL SANCTIONS|
The Securities and Exchange Commission ("Commission") deems it appropriate in the public interest and for the protection of investors that public administrative proceedings pursuant to Sections 15(b)(6) and 19(h) of the Securities Exchange Act of 1934 ("Exchange Act") be, and they hereby are, instituted against Dean H. Harris ("Harris").
In anticipation of the institution of these administrative proceedings, respondent Harris has submitted an Offer of Settlement ("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 that he admits (a) the jurisdiction of the Commission over him and over the subject matter of these proceedings, and (b) the entry of conviction set forth in paragraph III.B. and the entry of the injunction set forth in paragraph III.F., Harris consents to the issuance by the Commission of this Order Instituting Public Proceedings Pursuant to Sections 15(b)(6) and 19(h) of the Securities Exchange Act of 1934, Making Findings and Imposing Remedial Sanctions (the "Order").
On the basis of this Order and of the Offer of Settlement of Harris, the Commission makes the following findings:
A. Harris is a resident of La Mesa, California, and was employed as a registered representative of Oppenheimer & Co., Inc., ("Oppenheimer"), in its Atlanta, Georgia office, from approximately July 1994 to July 1997.
B. On January 27, 2000, Respondent Harris, pled guilty to and was convicted of one count of conspiracy to commit fraud and one count of conspiracy to dispose of fraudulently obtained property before the United States District Court for the Northern District of Georgia, in United States v. Dean Houston Harris, Crim. Information No. 4:99CR-048. On March 7, 2000, he was sentenced to a prison term of thirty-six months and ordered to make restitution in the amount of $8,665,616.25.
C. The counts of the criminal information to which Harris pled guilty alleged, inter alia, that while a registered representative at Oppenheimer, Harris acted as a middleman between co-conspirators to cause the transfer of approximately $13 million of State Mutual Insurance Company's ("State Mutual") funds from its bank account in Rome, Georgia to purchase securities for the benefit of himself and his co-conspirators without State Mutual's knowledge about the purpose of these transfers and without its authorization and consent.
D. On August 30, 2000, the Commission filed a civil injunctive action against Harris [SEC v. Dean H. Harris, Civil Action No. 1 00-CV-2269, (N.D. Ga.)], alleging that Harris violated Section 17(a) of the Securities Act of 1933 ("Securities Act") and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder.
E. The Commission's complaint alleged that from April 1995 to August 1997, Respondent Harris, acted with others to cause the transfer of approximately $13 million of State Mutual's funds from its bank account in Rome, Georgia to purchase securities for the benefit of himself and others without State Mutual's knowledge about the purpose of these transfers and without its authorization and consent. Specifically, the complaint alleged that Harris acted with an employee of State Mutual and others, to cause the fraudulent withdrawal of approximately $11 million from State Mutual's accounts to purchase speculative penny stocks, which he knew were inappropriate and improper for a mutual insurance company. The complaint further alleged that Harris received kickbacks of approximately $1.3 million for his role in the unauthorized securities transactions and unauthorized transfers of money. Further, the complaint alleged that Harris acted with the employee and others, to cause the fraudulent withdrawal of approximately $2 million to purchase a Treasury Note in State Mutual's name which was then sold and for which Respondent Harris received $105,000 of the proceeds for his personal benefit.
F. On September 8, 2000, the United States District Court for the Northern District of Georgia issued an order in the Commission's civil injunctive action against Harris [Securities and Exchange Commission v. Dean H. Harris, Civil Action No. 1 00-CV-2269, (N.D. Ga.)] that, inter alia, permanently enjoins Harris from violating Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder.
G. On September 8, 2000, without admitting or denying any of the allegations contained in the Commission's complaint, except as to jurisdiction and venue which he admitted, Harris consented to the entry of the above judgment of permanent injunction permanently enjoining him from violations of Section 17(a) of the Securities Act, and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder.
H. The securities Harris caused State Mutual to purchase were penny stocks as defined in the Exchange Act and Rules promulgated thereunder.
Based on the foregoing, the Commission deems it appropriate in the public interest and for the protection of investors to accept Harris's Offer and accordingly,
IT IS HEREBY ORDERED, pursuant to Sections 15(b)(6) and 19(h) of the Exchange Act, that, effective immediately, Harris be, and hereby is:
(1) barred from association with any broker or dealer; and
(2) barred from participating in an offering of penny stock.
By the Commission.
Jonathan G. Katz
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