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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. 47299/January 31, 2003

INVESTMENT ADVISERS ACT OF 1940
Release No. 2105/January 31, 2003

ADMINISTRATIVE PROCEEDING
File No. 3-10946


In the Matter of

Arjun Sekhri

Respondent.


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ORDER MAKING FINDINGS AND IMPOSING REMEDIAL SANCTION BY DEFAULT

I.

Respondent Arjun Sekhri (Respondent or Sekhri) is in default under Rule 155(a) of the Securities and Exchange Commission's (Commission) Rules of Practice, 17 C.F.R. § 201.155(a), because he has failed to file an answer in this matter. The Division of Enforcement (Division) has represented that service was made pursuant to Rule 141(a)(iv) of the Commission's Rules of Practice, 17 C.F.R. § 201.141(a)(iv).

At a prehearing conference held on January 6, 2003, the Division moved for summary disposition of this matter. On January 24, 2003, the Division filed a Memorandum in Support of Division's Motion For Summary Disposition Against Respondent Arjun Sekhri. Because Sekhri has failed to file an answer, the Division's motion for summary disposition will be treated as a motion for default pursuant to Rule 220(f) of the Commission's Rules of Practice, 17 C.F.R. § 201.220(f).

II.

Accordingly, I find the allegations in the OIP, dated November 21, 2002, are true:

1. Between July 1996 and January 1998, Sekhri, age 37, was associated with Salomon Smith Barney, Inc., in New York, New York, a registered broker, dealer, municipal securities dealer, and investment adviser.

2. On April 1, 1998, the Commission filed a Complaint in the United States District Court for the Southern District of New York, in an action captioned Securities and Exchange Commission v. Arjun Sekhri, et al., 98 Civ.2320 (RPP) (S.D.N.Y.), charging Sekhri and others with violations of Sections 10(b) and 14(e) of the Securities Exchange Act of 1934 (Exchange Act) and Rules 10b-5 and 14e-3 thereunder. The Complaint was amended on April 15, 1998, and May 19, 1998, to add additional defendants.

3. The Commission's Complaint alleges, inter alia, that Sekhri and those with whom he acted made total profits of approximately $2.5 million from their unlawful insider trading in common stock and/or call options on the stocks of (i) MCI Communications Corp. (MCI); (ii) Brooks Fiber Properties, Inc. (BFP); (iii) Carson Pirie Scott & Co., Inc. (CPS); (iv) Central and South West Corp. (CSW); and (v) Southern New England Telecommunications Corp (SNET).

4. On July 25, 2002, Judge Robert P. Patterson, Jr., entered a final judgment granting the Commission's motion for summary judgment against Sekhri. The Court found that Sekhri had engaged in an insider trading scheme in which Sekhri's tips led to trades in the securities of MCI, BFP, CPS, CSW, and SNET, in advance of six merger and acquisition announcements involving these companies. Based on its findings, the Court permanently enjoined Sekhri from future violations of Sections 10(b) and 14(e) of the Exchange Act and Rules 10b-5 and 14e-3, and ordered him to disgorge $957,892.55 in insider trading profits of the individuals who traded based upon his tips. Sekhri was also ordered to pay prejudgment interest of $376,879.66 and to pay a civil penalty of $7,727,772.21.

5. On March 14, 2000, in a case captioned United States v. Arjun Sekhri, 00 Cr. 236 (RPP) (S.D.N.Y. filed June 28, 1999), Sekhri entered a plea of guilty to a three-count indictment that charged him with violations of Sections 10(b) and 14(e) of the Exchange Act and Rules 10b-5 and 14e-3. He was convicted on two counts of federal securities fraud and one count of conspiracy to violate the federal securities laws. Sekhri was sentenced to twenty-four months in prison and later deported upon completion of his sentence.

In light of the allegations brought in the OIP, and Sekhri's failure to answer the OIP, I find it is necessary and appropriate for the protection of investors to order that Sekhri be barred from association with a broker or dealer, municipal securities dealer, and investment adviser pursuant to Sections 15(b)(6) and 15B(c)(4) of the Exchange Act and Section 203(f) of the Investment Advisers Act of 1940.

III.

Pursuant to Sections 15(b)(6) and 15B(c)(4) of the Securities Exchange Act of 1934 and Section 203(f) of the Investment Advisers Act of 1940, IT IS ORDERED that Arjun Sekhri is hereby BARRED from association with any broker or dealer, municipal securities dealer, and investment adviser.

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Robert G. Mahony
Administrative Law Judge

 

http://www.sec.gov/litigation/admin/34-47299.htm


Modified: 01/31/2003