UNITED STATES OF AMERICA
In the Matter of
PETER J. ESPOSITO,
|ORDER INSTITUTING |
TO SECTION 15(b)
OF THE SECURITIES
EXCHANGE ACT OF 1934,
AND IMPOSING REMEDIAL
The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest to institute public administrative proceedings pursuant to Section 15(b) of the Securities Exchange Act of 1934 ("Exchange Act") against Respondent Peter J. Esposito ("Esposito").
In anticipation of the institution of these proceedings, Respondent Esposito submitted an Offer of Settlement ("Offer") to the Commission, which 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 in which the Commission is a party, and without admitting or denying the findings contained herein, except as to the jurisdiction of the Commission over Respondent Esposito and over the subject matter of this proceeding and as to findings contained in Section III.1. below and as to the entry of a Final Judgment of Permanent Injunction and Other Relief as set forth in Section III.4. below, which are admitted, Respondent Esposito by his Offer consents to the entry of findings and remedial sanctions set forth below.
Accordingly, IT IS ORDERED that proceedings pursuant to Sections 15(b) of the Exchange Act be, and, they hereby are, instituted.
On the basis of this Order and the Offer of Settlement submitted by Esposito, the Commission finds that:
1. At all relevant times, Esposito was a director of Cyprus Fund, Inc. ("Cyprus Fund"), an unregistered foreign investment company.
2. In conducting the offer and sale of shares of the Cyprus Fund for the account of others, Esposito acted as a broker within the meaning of Section 3(a)(4) of the Exchange Act. At the time he engaged in such offers and sales, Esposito was neither registered with the Commission as a broker nor associated with a registered broker as required by Section 15(a) of the Exchange Act.
3. On August 27, 1999, the Commission filed an emergency action seeking a temporary restraining order, asset freeze and appointment of a receiver against Cyprus Funds, its investment advisor, Latin American Services Co., Ltd., Esposito, and the other directors of Cyprus Funds. Securities and Exchange Commission v. Latin American Services Co., Ltd, Eric V. Bartoli, James L. Binge, Douglas R. Shisler and Peter J. Esposito, Case No. 99-2360-Civ-Davis (S.D. Fla.). In its Complaint, the Commission alleged the ongoing fraudulent sale of unregistered securities, specifically Cyprus Funds shares, and the misappropriation of investor funds by principals of Cyprus Funds, including Esposito. On September 3, 1999, the United States District Court for the Southern District of Florida entered a preliminary injunction against defendants, including Esposito, and extended the asset freeze to the conclusion of the case.
4. On August 23, 2000, a Final Judgment of Permanent Injunction and Other Relief was entered against Esposito, by consent, enjoining him from future violations of Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933 ("Securities Act"), Section 10(b) of the Exchange Act and Rule 10b-5 thereunder.
Based on the foregoing, the Commission deems it appropriate and in the public interest to impose the sanctions specified by Respondent Esposito in his Offer of Settlement.
Accordingly, IT IS ORDERED that:
Respondent Esposito be, and hereby is, barred from association with any broker or dealer.
By the Commission.
Jonathan G. Katz
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