UNITED STATES OF AMERICA
In the Matter of
JEFFREY DENE LEADER,
|ORDER INSTITUTING PUBLIC PROCEEDINGS PURSUANT TO SECTION 15(b)(6) 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 proceedings pursuant to Section 15(b)(6) of the Securities Exchange Act of 1934 ("Exchange Act") be, and hereby are, instituted against Jeffrey Dene Leader ("Leader"or "Respondent").
In anticipation of the institution of these proceedings, the Respondent has submitted an Offer of Settlement, which the Commission has determined to accept. Solely for the purpose of these proceedings and any other proceeding brought by or on behalf of the Commission or to which the Commission is a party, the Respondent admits the findings set forth herein and admits to the jurisdiction of the Commission over the Respondent and over the subject matter of these proceedings, and consents to the entry of this Order Instituting Public Proceedings Pursuant to Section 15(b)(6) of the Securities Exchange Act of 1934, Making Findings and Imposing Remedial Sanctions ("Order").
Based of this Order and the Respondent's Offer, the Commission finds the following:
1. Leader was associated as a registered representative in the Charlotte, North Carolina office of Interstate Johnson/Lane, a registered broker-dealer, from in or about September 1993 to October 1995, and with Bear, Stearns & Co., Inc. from April 1997 to October 1997. He was employed with PaineWebber Incorporated from February 1993 until January 1995.
2. On November 1, 2001, an Order of Permanent Injunction And Other Relief was entered against Leader by the United States District Court for the Western District of North Carolina in the case of Securities and Exchange Commission v. James A. Nies, Jeffrey Dene Leader and Harold Dalton Davlin, Civil Action No. 3:00-CV-465-MU (W.D.N.C.), permanently enjoining him from violating Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder. The Order of Permanent Injunction and Other Relief directed Leader to pay disgorgement in the amount $190,000 plus prejudgment interest thereon, but waived disgorgement and prejudgment interest in excess of $125,000, and did not impose a civil penalty, based upon Leader's demonstrated inability to pay in excess of $125,000. Leader consented to the entry of the Order of Permanent Injunction without admitting or denying the allegations contained in the Commission's complaint.
3. The Commission's complaint alleged that during the period from in or about early 1995 to in or about early 1997, Leader and others, engaged in acts, practices and courses of business which operated as a fraud and deceit upon at least 17 mutual thrift banks and their account holders. Specifically, the complaint alleged that Leader and others defrauded Home Federal of North Carolina ("HFNC"), as well as at least 16 other mutual thrift banks in 11 states, through a fraudulent scheme in which Leader and others orchestrated the purchase of stock issued by the banks as part of the banks' conversion from mutually owned banks to publicly traded companies. The complaint further alleged that Leader and others purchased the conversion stock by submitting Stock Order Forms to the converting thrifts in the names of eligible thrift depositors, which did not disclose the fact that Leader, or other ineligible persons, were funding the stock purchase and would retain sole discretion to sell the stock, violating federal and state banking regulations. The complaint alleged that Leader thereby violated Section 10(b) of the Exchange Act and Rule 10b-5 thereunder.
In view of the foregoing, it is in the public interest to impose the sanctions specified in the Offer. Accordingly IT IS HEREBY ORDERED that Leader be, and hereby is, barred from association with any broker or dealer.
For the Commission, by its Secretary, pursuant to delegated authority.
Jonathan G. Katz
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