UNITED STATES OF AMERICA
In the Matter of
ANDREW P. BODNAR
|ORDER ENTERING DEFAULT AND IMPOSING SANCTIONS BY DEFAULT|
The Securities and Exchange Commission ("Commission") instituted this proceeding on April 29, 2002, pursuant to Section 15(b) of the Securities Exchange Act of 1934 ("Exchange Act"). Andrew P. Bodnar was served with the Order Instituting Proceedings ("OIP") on or about May 3, 2002. The Division of Enforcement ("Division") sent Mr. Bodnar a letter dated May 30, 2002. The letter noted that Mr. Bodnar was incarcerated and was not represented by legal counsel. It informed Mr. Bodnar that the Division would file a motion seeking entry of a default judgment and an Order barring him from association with any broker or dealer if he failed to file an Answer by June 14, 2002.1
Mr. Bodnar has not filed an Answer. The Division filed a Motion for Default Judgment ("Motion") on June 20, 2002. The supporting memorandum states that it is a matter of public record that Mr. Bodnar pled guilty in April 2001 to criminal securities fraud, mail fraud, and conspiracy charges before Judge James Gwin of the United States District Court for the Northern District of Ohio. According to the Division, the criminal case included the misconduct alleged in the OIP. Mr. Bodnar was sentenced on August 27, 2001, to serve eleven years and three months in prison and was ordered to pay $20 million in restitution.
At a prehearing conference on June 25, 2002, Mr. Bodnar stated that he did not want a hearing, and that he would not contest the Motion. Accordingly, I find Mr. Bodnar in default pursuant to Rules 155(a) and 220(f) of the Commission's Rules of Practice, and I find the allegations in the OIP to be true. 17 C.F.R. §§ 201.155(a), .220(f).
Mr. Bodnar was a registered representative at Delta Equity Securities Corporation, a broker-dealer registered with the Commission, from September 1995 until he was terminated in September 1997.
On April 8, 1999, the Commission filed a complaint seeking a permanent injunction against Mr. Bodnar and other persons in the United States District Court for the Northern District of Ohio alleging that Mr. Bodnar violated Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 ("Securities Act"), and Sections 10(b) and 15(a) of the Exchange Act, and Rule 10b-5 thereunder.
The Commission's Complaint alleged that Mr. Bodnar engaged in a scheme to defraud investors and to misappropriate money through the fraudulent offer and sale of unregistered securities of CBT Holding Corporation ("CBT Holding") and CBT-Ohio, Ltd. ("CBT Ohio"). The Complaint further alleged that, as part of, and in furtherance of, the fraudulent scheme, Mr. Bodnar acting individually and through a sales force, solicited and induced at least 148 public investors to purchase approximately $6.4 million of promissory notes issued by CBT Holding and CBT-Ohio. According to the Complaint, Mr. Bodnar and the sales force touted a twelve percent rate of return, falsely portrayed the securities as certificates of deposit and made other misrepresentations intended to lull investors into the false belief that the securities were safe investments. Also, according to the Complaint, Mr. Bodnar and other persons misappropriated most, if not all, of the funds raised through the sales of the CBT Holding and CBT-Ohio securities.
On April 16, 2002, United States District Court Judge Dan A. Polster, Northern District of Ohio, granted the Commission's Application for Judgment by Default and entered a Final Judgment permanently enjoining Mr. Bodnar from violating Sections 5(a), 5(c), and 17(a) of the Securities Act and Sections 10(b) and 15(a) of the Exchange Act, and Rule 10b-5 thereunder. The Final Judgment ordered Mr. Bodnar to pay a civil penalty in the amount of $110,000.
These findings are persuasive that it is in the public interested that Mr. Bodnar not participate in the securities industry.
Based on these findings, I GRANT the Division's Motion and ORDER, pursuant to Section 15(b)(6) of the Exchange Act, that Andrew P. Bodnar is barred from association with a broker or dealer.
Brenda P. Murray
Chief Administrative Law Judge
|1||The OIP specifies that a respondent must file an Answer to the allegations in the OIP within twenty days of service on him of the OIP. 17 C.F.R. § 201.220.|
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