Aaron Elbogen

SECURITIES EXCHANGE ACT OF 1934
Release No. 47327 / February 6, 2003

ADMINISTRATIVE PROCEEDING
File No. 3-11035

I.

The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest that a public administrative proceeding be instituted against Aaron Elbogen ("Respondent" or "Elbogen") pursuant to Section 15(b)(6) 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 this proceeding 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 contained 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 this proceeding, which Respondent admits, Elbogen consents to the issuance of this Order Instituting Administrative Proceeding Pursuant to Section 15(b)(6) of the Securities Exchange Act of 1934, Making Findings, and Imposing Sanctions ("Order").

Accordingly, IT IS ORDERED that a proceeding pursuant to Section 15(b)(6) of the Exchange Act against Elbogen be, and hereby is, instituted.

III.

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

A. From 1978 to March 1998, Elbogen was associated with Datek Securities Corporation ("Datek Securities," now iCapital Markets LLC), a broker-dealer registered with the Commission pursuant to Section 15(b) of the Exchange Act. In addition, from April 1998 to June 2001, Elbogen was associated with Heartland Securities Corporation, a broker-dealer registered with the Commission pursuant to Section 15(b) of the Exchange Act.

B. Pursuant to a Final Judgment of the U.S. District Court for the Southern District of New York entered on January 23, 2003, in an action styled Securities and Exchange Commission v. Sheldon Maschler, et al., 03 Civ. 0264 (S.D.N.Y.), Elbogen is permanently enjoined from aiding and abetting violations of Sections 15(b) and 17(a)(1) of the Exchange Act and Rules 15b3-1, 17a-3(a)(1), 17a-3(a)(2), 17a-3(a)(3), 17a-5(a), and 17a-5(d) promulgated thereunder.

C. The Commission's Complaint in Securities and Exchange Commission v. Sheldon Maschler, et al. alleged that from 1993 to March 1998, several individuals at Datek Securities other than Respondent participated in a widespread fraudulent scheme to execute proprietary trades illegally through the Nasdaq Stock Market's Small Order Execution System, resulting in tens of millions of dollars in illegal profits. Among other things, the Complaint further alleged that Elbogen, who was Datek Securities' president and chief executive officer at various times during that period, falsely classified the distribution of those trading profits in the firm's books and records, and in FOCUS reports and audited financial statements filed with the Commission. Thus, Elbogen aided and abetted Datek Securities' violations of the above books and records and filing provisions in connection with the payment of trading profits to the firm's undisclosed principals.

IV.

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

Accordingly, IT IS ORDERED that Elbogen be, and hereby is, barred from association with any broker or dealer, with the right to reapply for association after two (2) years in a non-supervisory and non-proprietary capacity to the appropriate self-regulatory organization, or if there is none, to the Commission.

By the Commission.

Jonathan G. Katz
Secretary