UNITED STATES OF AMERICA
In the Matter of
REGARD B. SMITH
ORDER INSTITUTING 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 public administrative proceedings be instituted against Regald B. Smith ("Smith") pursuant to Sections 15(b) and 19(h) of the Securities Exchange Act of 1934 ("Exchange Act").
In anticipation of the institution of these proceedings, Smith 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 to which the Commission is a party, and without admitting or denying the Commission's findings contained herein, except to as the Commission's jurisdiction and to the Commission's findings set forth in Paragraphs III.A., III.B. and III.C., which are admitted, Smith consents to the entry of this Order Instituting 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 proceedings pursuant to Sections 15(b) and 19(h) of the Exchange Act be and hereby are instituted.
On the basis of this Order and Smith's Offer, the Commission finds that:
A. Smith was a registered representative for various broker-dealers registered with the Commission from 1981 through 2000.
B. On September 7, 2000, in the case of SEC v. Regald B. Smith, (Case No. 7:00 cv 358), the Honorable Joseph M. Hood, United States District Judge for the Eastern District of Kentucky, entered an Order of Permanent Injunction against Smith, pursuant to his consent and without Smith's admitting or denying the allegations in the Commission's Complaint, enjoining Smith from violating Section 17(a) of the Securities Act of 1933, Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder. The Order also requires Smith to, among other things, pay disgorgement and a civil penalty in amounts to be determined by the Court.
C. In its Complaint, the Commission alleged that from in or about March 1999 to August 28, 2000, Smith misappropriated more than $5 million from more than 6 investors who were his brokerage clients. The Complaint also alleged that Smith generally told clients who trusted him that he had access to a "special situation" pursuant to which they could purchase certain high yield, tax-exempt bonds with short-term maturities that made them attractive as short-term investments. In at least some cases, the Complaint alleged, Smith represented that the bonds were available because other clients wished to sell them. The Complaint further alleged that, in fact, the bonds Smith offered investors did not exist. The Complaint also alleged that, after obtaining checks from his clients to purchase the recommended bonds, Smith diverted his clients' funds to his own personal accounts. The Complaint also alleged that Smith then used the funds he misappropriated for his own personal purposes, including to fund renovations of a hotel (the Hotel Anthony) he owned in Pikeville, and to pay back at least one early investor.
In light of the foregoing, it is in the public interest and for the protection of investors to impose the sanctions specified in the Offer submitted by Smith.
Accordingly, IT IS HEREBY ORDERED that Regald B. Smith be, and hereby is, barred from association with any broker or dealer.
By the Commission.
Jonathan G. Katz
|Home | Previous Page||