UNITED STATES OF AMERICA
SECURITIES EXCHANGE ACT OF 1934
The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest that a public administrative proceeding be, and hereby is, instituted pursuant to Section 15(b) of the Securities Exchange Act of 1934 ("Exchange Act") against Michael P. Cilmi ("Cilmi").
In anticipation of the institution of these proceedings, Cilmi has submitted an Offer of Settlement ("Offer") that the Commission has determined to accept. Solely for the purpose of this proceeding and any other proceeding 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 as to the jurisdiction of the Commission over him and over the subject matter of this proceeding, and the fact of his criminal conviction set forth in paragraph III.2 below, which are admitted, Cilmi consents to the entry of this Order Pursuant to Section 15(b) of the Securities and Exchange Act of 1934 Instituting Proceedings, Making Findings and Imposing Remedial Sanctions ("Order").
On the basis of this Order and the Offer submitted by Cilmi, the Commission finds that: 1
1. Cilmi, age 35, was the president from August 1997 to June 2000 of Bell Investment Group, Inc., a broker-dealer registered with the Commission. Cilmi was a registered representative from September 1991 to December 1992, and from July 1993 to August 1996 at A.S. Goldmen & Co. Inc. ("A.S. Goldmen"), a broker-dealer registered with the Commission. From August 1996 to June 1997, Cilmi was a registered representative at Meyers Pollock Robbins, Inc. ("Meyers Pollock"), a broker-dealer registered with the Commission. Cilmi has also been a registered representative at the following registered broker-dealers, J.W. Barclay & Co., Inc. (March 1993 - July 1993) and Lloyd Wade Securities, Inc. (August 1997 - January 1998). Cilmi is a resident of New York.
2. On April 17, 2000, Cilmi was criminally convicted of two counts of Enterprise Corruption, a Class B felony under New York Penal Law §460.20, upon the entry of his plea of guilty by the Supreme Court of the State of New York. The first count ("Count I") was based on conduct arising during Cilmi's association as a registered representative at A.S. Goldmen. The second count ("Count II") was based on conduct arising during Cilmi's association as a registered representative at Meyers Pollock.
3. According to the plea allocution upon which Count I was based, Cilmi, acting as a senior registered representative and manager of A.S. Goldmen, and others, directly or through accomplices acting at their direction and control, engaged in a pattern of criminal activity that included: (1) misrepresenting the nature and value of certain securities sold to investors;
(2) misrepresenting and failing to disclose the use of nominee and controlled accounts in certain initial public offerings; (3) refusing to execute or otherwise interfering with the execution of customer sell orders; and (4) engaging in unauthorized trades of securities. According to the plea allocution upon which Count II was based, Cilmi, acting as a registered representative and principal of Meyers Pollock, and others, directly or through accomplices acting at their direction and control, engaged in a pattern of criminal activity that included: (1) misrepresenting the nature and value of certain securities sold to investors; (2) failing to disclose to retail customers the personal financial stake Cilmi or other representatives of Meyers Pollock had in certain of these transactions; and (3) failing to disclose the mark-up on certain securities sold to investors.
Based on the foregoing, the Commission deems it appropriate and in the public interest to accept Cilmi's Offer and to impose the sanctions that are set forth in the Offer.
Accordingly, pursuant to Section 15(b) of the Exchange Act, IT IS HEREBY ORDERED that Cilmi be, and hereby is, barred from association with any broker or dealer.
By the Commission.
1 The findings of the Order are not binding on any other person or entity in this or any other proceeding.