UNITED STATES OF AMERICA
In the Matter of
ORDER INSTITUTING PUBLIC
PURSUANT TO SECTIONS 15(b)(6)
AND 19(h) OF THE SECURITIES
EXCHANGE ACT OF 1934, MAKING
FINDINGS AND IMPOSING
The Securities and Exchange Commission deems it appropriate and in the public interest to institute a public administrative proceeding pursuant to Sections 15(b)(6) and 19(h) of the Securities Exchange Act of 1934 to determine what action, if any, is necessary in the light of the entry of a permanent injunction against Michael Schuchard in the United States District Court for the District of Colorado.
In anticipation of the institution of these administrative proceedings, Schuchard has submitted an Offer of Settlement (the "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 as to the findings and conclusions set forth in Part III A, and B below, which he admits, Schuchard consents to the entry of this Order Instituting Public Administrative 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").
Accordingly, IT IS ORDERED that a proceeding pursuant to Section 15(b)(6) and 19(h) of the Exchange Act be, and hereby is, instituted.
On the basis of this Order and Schuchard's Offer, the Commission makes the following findings1:
A. Schuchard was associated with Triquest Financial Co., a broker-dealer registered with the Commission pursuant to Section 15(b) of the Exchange Act, from 1993 to 1996.
B. In an action captioned SEC v. Timothy S. Vasko, et al., C.A. No. 00-M-2593, the United States District Court for the District of Colorado entered a Final Judgment permanently enjoining Schuchard from violating Section 17(a) of the Securities Act, Section 10(b) of the Exchange Act, and Rule 10b-5, and from aiding and abetting violations of Section 13(a) of the Exchange Act and Rule 13a-1.
C. The Commission's complaint in SEC v. Timothy S. Vasko, et al., alleged that while working as a Triquest registered representative from 1993 to 1996, Schuchard simultaneously served as a senior vice president and a member of the board of VIP Global Capital, Inc. The complaint alleged that Schuchard engaged in improper sales practices with respect to the securities of VIP during this time period. In particular, the complaint alleged that Schuchard recommended and sold more than $56,000 worth of VIP securities to several elderly, financially unsophisticated clients who were living on modest, fixed incomes, and for whom the investments were therefore unsuitable. Moreover, the complaint alleged that Schuchard sold more than $313,000 in restricted VIP securities to his clients directly from the issuer, VIP, during this time period. The complaint further alleged that, in recommending and selling VIP to his clients, Schuchard understated the risks of the investments and failed to disclose that he was motivated, in part, by a desire to support VIP's trading price.
Based on the foregoing, the Commission deems it appropriate and in the public interest to accept Schuchard's Offer and to impose the remedial relief specified in the Offer.
Accordingly, IT IS ORDERED pursuant to Section 15(b)(6) and 19(h) of the Exchange Act that, effective immediately, respondent Michael Schuchard be, and hereby is, barred from association with any broker or dealer.
By the Commission.
Jonathan G. Katz
1 The findings herein are made pursuant to Schuchard's Offer and are not binding on any other person or entity in this or any other proceeding.
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