UNITED STATES OF AMERICA
In the Matter of
LEONARD B. GREER,
|ORDER MAKING FINDINGS AND IMPOSING REMEDIAL SANCTIONS|
In these proceedings instituted pursuant to Section 15(b) of the Securities Exchange Act of 1934 ("Exchange Act"),1 Leonard B. Greer ("Greer") has submitted an Offer of Settlement to the Commission, which the Commission has determined to accept. Solely for the purposes 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 findings contained herein, except as to the jurisdiction of the Commission over him and over matters set forth in the Order, and Paragraphs II.A. and II.B. below, which are admitted, Greer consents to the entry of this Order Making Findings and Imposing Remedial Sanctions.
On the basis of the Order Instituting Public Administrative Proceedings and the Offer of Settlement submitted by Greer, the Commission finds that:
A. Greer, age 62, resides in Rye, New York. From 1991 to 1998, Greer was the president and sole owner of L.C. Wegard & Co., Inc. ("Wegard"), a registered broker-dealer whose registration was revoked by the Commission, in 1998, in an administrative proceeding unrelated to the injunctive action described below. See In the Matter of F.N. Wolf & Co., Inc., et al., Admin. Pro. File No. 3-8533 (Initial Decision) (Jan. 3, 1996), aff'd sub nom. In the Matter of L.C. Wegard & Co., Inc., et al., Admin. Pro. File No. 3-8533, 1998 SEC LEXIS 1130 (Opinion of the Commission) (May 29, 1998), aff'd sub nom. L.C. Wegard & Co., Inc., et al. v. SEC, No. 98-4331, 1999 U.S. App. LEXIS 16038 (2d Cir. July 13, 1999). In the same proceeding, Greer was suspended for one year from association with any broker or dealer and barred from participating in any offering of penny stock, based on findings that he engaged in the fraudulent market manipulation of the registered common stock of Of Counsel Enterprises, Inc. In addition, he was ordered to cease and desist from committing or causing violations of various antifraud and reporting provisions of the federal securities laws and to pay a civil penalty of $175,000.
The Injunctive Order Against Greer
B. On September 30, 1997, the Commission filed a Complaint seeking, among other things, a permanent injunction against Greer in SEC v. Leonard B. Greer, et al., Case No. 97 Civ. 7267 (MP) ("the Injunctive Action"). On June 5, 2001, the United States District Court for the Southern District of New York entered an order permanently enjoining Greer from violations of Section 17(a) of the Securities Act of 1933 and Sections 10(b), 13(d)(1) and 13(d)(2) of the Exchange Act and Rules 10b-5, 13d-1 and 13d-2 thereunder ("Order"), and ordering him to disgorge $257,800, plus prejudgment interest of $203,986 and post judgment interest, and to pay a civil penalty of $100,000. Greer consented to the entry of the Order without admitting or denying the allegations in the Complaint.
Basis of the Injunction: Greer's Fraudulent Market Manipulation of AFGL Stock
C. The Complaint in the Injunctive Action alleges that, from January 1994 through April 1994, Greer fraudulently manipulated the market price of the stock of AFGL International, Inc. from $1 to $7 per share. The Complaint alleges that Greer accomplished the manipulation by controlling the supply of AFGL stock that was available to the market; by accumulating over two-thirds of the freely-tradable AFGL stock in Wegard's proprietary account; by exerting price leadership to increase the market price of AFGL stock; and by generating retail demand for AFGL stock.
D. The Complaint alleges that, during an intensive nine-day selling effort that began on April 20, 1994, Greer's firm, Wegard, sold over 1 million shares of AFGL stock to its customers, at artificially inflated prices, netting a profit of approximately $3.5 million.
E. The Complaint alleges that, during the relevant period, although Wegard acquired over 5% of the outstanding shares of AFGL stock, and thereafter made further acquisitions in excess of 1% of Wegard's holdings, Greer and Wegard failed to file a Schedule 13D with the Commission, or any amendments thereto, as required by Section 13(d) of the Exchange Act and Rules 13d-1 and 13d-2 thereunder.
In view of the foregoing, the Commission deems it appropriate and in the public interest to accept the Offer of Settlement of Leonard B. Greer.
Accordingly, IT IS ORDERED that Respondent Leonard B. Greer is barred from association with any broker or dealer.
By the Commission.
Jonathan G. Katz
|1||An Order Instituting Public Administrative Proceedings in this matter was issued on July 24, 2001.|
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