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U.S. Securities and Exchange Commission

UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION

SECURITIES EXCHANGE ACT OF 1934
Release No. 46854 / November 20, 2002

ADMINISTRATIVE PROCEEDING
File No. 3-10938


In the Matter of

Rodolfo Luzardo,

Respondent.


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ORDER INSTITUTING ADMINISTRATIVE PROCEEDINGS PURSUANT TO SECTION 15(b) OF THE SECURITIES EXCHANGE ACT OF 1934, MAKING FINDINGS, AND IMPOSING REMEDIAL SANCTIONS

I.

The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest that public administrative proceedings be, and hereby are, instituted against Rodolfo Luzardo ("Respondent" or "Luzardo") pursuant to Section 15(b) of the Securities Exchange Act of 1934 ("Exchange Act").

II.

In anticipation of these administrative proceedings, Respondent has submitted an Offer of Settlement ("Offer"), which the Commission has determined to accept. Solely for the purpose 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 herein, except as to those findings contained in Section III.B, below, and as to jurisdiction of the Commission over Respondent and over the subject matter of the proceedings, which Respondent admits, Luzardo consents to the entry of this Order Instituting Administrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934, Making Findings, and Imposing Remedial Sanctions ("Order"), as set forth below.

III.

On the basis of this Order and Respondent's Offer, the Commission makes the following findings:

  1. From July 1997 to July 1998, Luzardowas associated with J.P. Morgan Securities, Inc. ("J.P. Morgan,"), a broker-dealer registered with the Commission pursuant to Section 15(b) of the Exchange Act.
     
  2. Pursuant to a Final Judgment of the U.S. District Court for the Southern District of New York entered on November 12, 2002, Securities and Exchange Commission v. Rodolfo Luzardo, et al., 01 Civ. 9206 (DC) (S.D.N.Y.), Luzardo is permanently enjoined from violating Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder.
     
  3. The Commission's complaint in Securities and Exchange Commission v. Rodolfo Luzardo, et al. alleged that Luzardo misappropriated confidential information regarding a pending merger between BetzDearborn Inc. and Hercules Inc. from his then-employer, J.P. Morgan, which was the adviser to BetzDearborn. According to the complaint, Luzardo tipped his friend and new employer, Alain Kodsi, who in turn tipped his father, Elias Kodsi. The complaint further alleged that Elias Kodsi purchased 30,000 shares of BetzDearborn common stock through two numbered Swiss accounts the day before the merger was announced at a cost of over $1 million, and that after the announcement on July 30, Elias Kodsi sold the shares for unlawful profits of $963,750.

IV.

In view of the foregoing, the Commission deems it appropriate and in the public interest to impose the sanction specified in the Offer submitted by Luzardo.

ACCORDINGLY, IT IS HEREBY ORDERED that pursuant to Section 15(b)(6) of the Exchange Act, Luzardo be, and hereby is, barred from association with any broker or dealer.

By the Commission.

Jonathan G. Katz
Secretary


http://www.sec.gov/litigation/admin/34-46854.htm


Modified: 11/25/2002