UNITED STATES OF AMERICA
SECURITIES EXCHANGE ACT OF 1934
INVESTMENT ADVISERS ACT OF 1940
The Securities and Exchange Commission (the "Commission") deems it appropriate in the public interest and for the protection of investors that public administrative proceedings be instituted pursuant to Sections 15(b)(6), 15B(c)(4) and 19(h) of the Securities Exchange Act of 1934 ("Exchange Act") and Section 203(f) of the Investment Advisers Act of 1940 ("Advisers Act") against Respondent Michael Andrew Petrescu-Comnene ("Petrescu-Comnene").
In anticipation of these proceedings, Petrescu-Comnene has submitted an Offer of Settlement ("Offer") to the Commission, which the Commission has determined to accept. Solely for the purpose of these proceedings and any other proceedings brought by or on the behalf of the Commission, or in which the Commission is a party, and without admitting or denying the findings herein, except that Petrescu-Comnene admits the jurisdiction of the Commission over him and over the subject matter of these proceedings and the entry of the Final Judgment of Permanent Injunction and Other Relief as to Defendant Michael Andrew Petrescu-Comnene as set forth in Section III.D, Petrescu-Comnene consents to the entry of this Order Instituting Public Administrative Proceedings Pursuant to Sections 15(b)(6), 15B(c)(4) and 19(h) of the Securities Exchange Act of 1934 and Section 203(f) of the Investment Advisers Act of 1940, Making Findings and Imposing Sanctions ("Order") and to the entry of the findings and sanctions set forth below.
Accordingly, IT IS HEREBY ORDERED that said administrative proceedings against Petrescu-Comnene be, and hereby are, instituted.
On the basis of this Order and Petrescu-Comnene's Offer, the Commission makes the following findings:
A. Between July 6, 1999 and October 6, 2000, Petrescu-Comnene was associated with Salomon Smith Barney, Inc. ("Salomon"), a registered broker, dealer, municipal securities dealer, investment adviser, and member of a national securities exchange and registered securities association.
B. On October 13, 2000, the Commission filed a Complaint in the United States District Court for the Southern District of New York, in an action captioned Securities and Exchange Commission v. Michael Andrew Petrescu-Comnene, Civil Action No. 00Civ. 7825, charging Petrescu-Comnene with violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder.
C. In the injunctive action described in Paragraph III.B above, the Commission's Complaint alleged, inter alia, that beginning in December 1999, Petrescu-Comnene engaged in repeated acts of insider trading over a nine-month period. The Complaint alleges that Petrescu-Comnene violated his fiduciary obligations to Salomon and its clients by tipping his friends about several merger and acquisition transactions that he learned about during the course of his employment. The Complaint alleges that Petrescu-Comnene and his friends made their largest profits by purchasing call options of Associates First Capital Corp. ("AFS") the day before Citigroup, Inc., Salomon's parent company, publicly announced that it had agreed to purchase AFS.
D. A Final Judgment of Permanent Injunction and Other Relief as to Defendant Michael Andrew Petrescu-Comnene ("Final Judgment") was entered in the United States District Court for the Southern District of New York on May 14, 2001. Among other things, the Final Judgment permanently restrains and enjoins Petrescu-Comnene from, directly or indirectly, violating Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder.
Based on the foregoing, the Commission deems it appropriate in the public interest and for the protection of investors to impose the sanctions specified in Petrescu-Comnene's Offer, and
ACCORDINGLY, IT IS HEREBY ORDERED that Petrescu-Comnene be, and hereby is, barred from association with any broker, dealer, municipal securities dealer, investment adviser, or member of a national securities exchange or registered securities association.
By the Commission.