Securities Exchange Act of 1934
Release No. 48790 / November 17, 2003
Administrative Proceedings
File No. 3-11336
In the Matter of David P. Melillo, 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 pursuant to Section 15(b) of the Securities Exchange Act of 1934 ("Exchange Act") against David P. Melillo ("Melillo" or "Respondent").
II.
In anticipation of the institution of these proceedings, Respondent has submitted an Offer of Settlement (the "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 the Commission's jurisdiction over him and the subject matter of these proceedings, and the findings contained in Section III.2 and III.4, below, which are admitted, Respondent 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 (the "Order").
III.
On the basis of this Order and Respondent's Offer, the Commission finds that:
1. From July 1990 through March 1997, Melillo was President of, and associated with, Euro-Atlantic Securities, Inc. ("Euro"), a broker-dealer registered with the Commission pursuant to Section 15 of the Exchange Act;
2. A permanent injunction was entered against Melillo on October 17, 2003 by the United States District Court for the Eastern District of New York, in an action captioned Securities and Exchange Commission v. Ilan Arbel, et al., Civ. 01-5985 (ILG) ("Injunctive Action"), which permanently enjoined Melillo from future violations of Section 17(a) of the Securities Act of 1933 ("Securities Act") and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, and Rule 101 of Regulation M;
3. In the Injunctive Action, the Commission's complaint alleged, inter alia, that between August 1, 1996 and October 31, 1996, Melillo and others sold the securities of Hollywood Productions, Inc. ("Hollywood"). In connection with the sale of Hollywood's securities, Melillo artificially raised and maintained the price of Hollywood's securities by, among other things, directing brokers to make false and materially misleading statements to customers, and also paid bribes to such brokers who fraudulently marketed Hollywood's securities;
4. On February 22, 2002, Melillo pled guilty to one count of conspiracy to commit securities fraud before the United States District Court for the Eastern District of New York in a criminal proceeding captioned United States v. Ilan Arbel, et al., No. 01 CR 917 (ILG); and
5. The count to which Melillo pled guilty alleged, inter alia, that Melillo conspired to defraud investors and obtained money and property by means of materially false and misleading statements.
IV.
In view of the foregoing, the Commission deems it appropriate and in the public interest to impose the sanctions specified in Melillo's Offer.
ACCORDINGLY, IT IS HEREBY ORDERED:
Pursuant to Section 15(b)(6) of the Exchange Act, that Respondent Melillo be, and hereby is barred from association with any broker or dealer.
By the Commission.
Secretary