UNITED STATES OF AMERICA
In the Matter of
RICHARD M. EISENMENGER,
|ORDER INSTITUTING |
TO SECTION 15(b) OF THE
ACT OF 1934, MAKING
FINDINGS AND IMPOSING
The Securities and Exchange Commission ("Commission") deems it appropriate in the public interest to institute a public administrative proceeding pursuant to Section 15(b) of the Securities Exchange Act of 1934 ("Exchange Act") against Richard M. Eisenmenger ("Eisenmenger").
In anticipation of the institution of this proceeding, Eisenmenger has 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 entry of the injunction described below and the Commission's jurisdiction over him and over the subject matter of this proceeding, which are admitted, Eisenmenger consents to the entry of this Order Instituting Public Administrative Proceeding Pursuant to Section 15(b) of the Securities Exchange Act of 1934, Making Findings and Imposing Remedial Sanction, and to the findings and remedial sanction set forth below.
Accordingly, IT IS ORDERED that an administrative proceeding pursuant to Section 15(b) of the Exchange Act be, and herby is, instituted.
On the basis of this Order and the Offer submitted by Eisenmenger, the Commission finds that:
1. During the period from June 1996 to October 1999, Eisenmenger, president of Geneva Securities, Inc., a broker-dealer registered with the Commission from 1985 to 1999, induced or effected transactions in the sales of securities by selling promissory notes and other securities issued by GSI Investment Group, Inc., Geneva Holding Corp., and GSI Trading Corp.
2. On September 28, 2001, the Commission filed a Complaint in the United States District Court for the Northern District of Illinois against Eisenmenger captioned SEC v. Richard M. Eisenmenger and LeRoy K. Messenger, 01 C 7506.
3. The Commission's Complaint alleges that from at least June 1996 through September 1999, Eisenmenger and another defendant violated the federal securities laws by fraudulently selling securities of companies related to Geneva Securities, Inc. The Complaint alleges that the defendants sold securities while making material misstatements about the use of the funds, the debts the companies would become obligated to pay, and the collateral protecting the investments. Further, the Complaint alleges that Eisenmenger sold investments that were unsuitable for some of his customers, used customer funds to purchase securities without their permission, and diverted assets of certain customers to the accounts of Geneva-affiliated companies.
4. On October 5, 2001, in SEC v. Eisenmenger, et al., the Court entered an order enjoining Eisenmenger from violations of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder. Eisenmenger, without admitting or denying the allegations in the Complaint, consented to the Court's Order.
Based on the foregoing, the Commission deems it appropriate in the public interest to accept the Offer of Richard M. Eisenmenger and to impose the sanction specified in the Offer.
Accordingly, IT IS ORDERED that Respondent Richard M. Eisenmenger is barred from association with any broker or dealer.
By the Commission.
Jonathan G. Katz
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