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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. 47520/March 18, 2003

INVESTMENT ADVISERS ACT OF 1940
Release No. 2115/March 18, 2003

ADMINISTRATIVE PROCEEDING
File No. 3-10945


 

In the Matter of

SHARAD KAPOOR  


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ORDER MAKING FINDINGS AND IMPOSING REMEDIAL SANCTIONS BY DEFAULT

The Securities and Exchange Commission (SEC or Commission) issued its Order Instituting Proceedings (OIP) on November 21, 2002, pursuant to Sections 15(b)(6) and 15B(c)(4) of the Securities Exchange Act of 1934 (Exchange Act) and Section 203(f) of the Investment Advisers Act of 1940 (Advisers Act). The Division of Enforcement (Division) represents that the OIP has been properly served upon Sharad Kapoor (Kapoor or Respondent). See Declaration of Kenneth J. Guido, dated March 17, 2003 (representing that delivery of the OIP to Kapoor was effectuated in late November or early December 2002); Supplemental Memorandum of the Division of Enforcement, dated March 13, 2003. Based on the Division's representations, I find that Kapoor has failed to file an answer within the time allowed, and is in default.1 See Rules 155(a) and 220(f) of the Commission's Rules of Practice.

Accordingly, I find that the following allegations in the OIP are true:

Between June 1993 and May 1998, Kapoor was associated with Merrill Lynch, Pierce, Fenner & Smith, Inc. (Merrill Lynch), a registered broker, dealer, municipal securities dealer, and investment adviser.

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 SEC v. Sekhri, 98 Civ. 2320 (RPP) (S.D.N.Y.). The complaint was subsequently amended to charge additional defendants, including Kapoor, with violations of Sections 10(b) and 14(e) of the Exchange Act and Rules 10b-5 and 14e-3 thereunder.

On July 22, 2002, the district court granted the Commission's motion for summary judgment against Kapoor and others. See SEC v. Sekhri, Fed. Sec. L. Rep. (CCH) ¶ 91,963 (S.D.N.Y. July 22, 2002). The district court found that, between September 1997 and January 1998, while Kapoor was associated with Merrill Lynch, he engaged in insider trading in the securities of several public companies in advance of merger and acquisition announcements. The district court permanently enjoined Kapoor from future violations. It also ordered him to pay substantial amounts of disgorgement, prejudgment interest, and civil monetary penalties.

In light of these findings, and Kapoor's failure to file an answer to the OIP, I find that it is necessary and appropriate for the protection of investors to order that Kapoor be barred from association with any broker, dealer, municipal securities dealer, and investment adviser.

IT IS ORDERED THAT Sharad Kapoor is barred from association with any broker, dealer, municipal securities dealer, and investment adviser 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.

_______________________________
James T. Kelly
Administrative Law Judge

Footnote

1 Should Kapoor wish to contest the Division's representations about the validity of service of the OIP, he may file a motion to set aside the default pursuant to Rule 155(b) of the Commission's Rules of Practice.

 

http://www.sec.gov/litigation/admin/34-47520.htm


Modified: 03/19/2003