UNITED STATES OF AMERICA
In the Matter of
ORDER INSTITUTING PUBLIC ADMINISTRATIVE PROCEEDINGS PURSUANT TO SECTION 15(b) OF THE SECURITIES EXCHANGE ACT OF 1934, MAKING FINDINGS AND IMPOSING REMEDIAL SANCTIONS
The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest that public administrative proceedings be and hereby are instituted pursuant to Section 15(b) of the Securities Exchange Act of 1934 ("Exchange Act"), against Garri Zhigun ("Zhigun").
In anticipation of the institution of these proceedings, Zhigun 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 in which the Commission is a party and, without admitting or denying the findings contained herein, except as to facts set forth in paragraphs II.A., B. and D. and the Commission's jurisdiction over him and over the subject matter of this proceeding, which are admitted, Zhigun consents to the institution of public administrative proceedings, and the findings and remedial sanctions set forth below.
On the basis of this Order and the Offer of Settlement submitted by Zhigun, the Commission finds that:
A. During the period October 1996 through April 1999, Zhigun was a registered representative associated with various broker-dealers registered with the Commission, including, from June 1997 to November 1997, W.J. Nolan & Company, Inc. ("Nolan").
B. On August 2, 1999, the Commission filed a Complaint in the United States District Court for the Northern District of Illinois against Zhigun and others captioned SEC v. Kfir Barzilay, et al., No. 99 C 5023.
C. The Commission's Complaint alleges that from about June through November of 1997, Zhigun was associated with the Park Avenue office of Nolan. The Complaint alleges that, during this period, among other things, Zhigun engaged in fraudulent sales practices in the accounts of at least nine customers. The Complaint alleges that Zhigun's activities included: (1) churning at least five accounts; (2) trading one or more times without authorization in at least five accounts; and (3) making unsuitable trades in at least eight accounts. The Complaint also alleges that in the accounts that Zhigun churned, the annualized turnover ratios ranged from approximately 7 to 23, and the annualized break even ratios ranged from approximately 27% to 297%. The Complaint further alleges that from these fraudulent transactions, Zhigun earned over $18,000 in commissions.
D. On December 6, 2001, in SEC v. Barzilay, the Honorable Ronald Guzman entered an Order of Permanent Injunction enjoining Zhigun from violating Sections 17(a) of the Securities Act of 1933 ("Securities Act"), Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder, and Section 17(a) of the Exchange Act and Rule 17a-3 promulgated thereunder. Zhigun, without admitting or denying the allegations in the Complaint, consented to the entry of the Order of Permanent Injunction.
In view of the foregoing, the Commission deems it appropriate and in the public interest to accept the Offer of Settlement of Garri Zhigun
Accordingly, IT IS ORDERED that Respondent Garri Zhigun is barred from association with any broker or dealer.
By the Commission.
Jonathan G. Katz
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