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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. 49645 / May 3, 2004

INVESTMENT ADVISERS ACT OF 1940
Release No. 2233 / May 3, 2004

ADMINISTRATIVE PROCEEDING
File No. 3-11473


In the Matter of

ROBERT D. BEWKES,

Respondent.


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ORDER INSTITUTING ADMINISTRATIVE
PROCEEDINGS PURSUANT TO SECTION 15(b)
OF THE SECURITIES EXCHANGE ACT OF
1934 AND SECTION 203(f) OF THE
INVESTMENT ADVISERS ACT OF 1940,
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") and Section 203(f) of the Investment Advisers Act of 1940 ("Advisers Act") against Robert D. Bewkes ("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 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 and Section 203(f) of the Investment Advisers Act of 1940, Making Findings, and Imposing Remedial Sanctions ("Order"), as set forth below.

III.

On the basis of this Order and the Respondent's Offer, the Commission finds that:

1. Bewkes, age 48, is a resident of Darien, Connecticut. Between June 1991 and June 30, 2003, he was employed by UBS PaineWebber as a financial advisor in Stamford, Connecticut. Bewkes is the son of E. Garrett Bewkes, Jr. ("Garry Bewkes"), who was a member of the Board of Directors of Interstate Bakeries Corporation ("IBC") from 1992 through 2003. IBC is a Delaware corporation headquartered in Kansas City, Missouri, and its common stock is listed on the NYSE and registered with the Commission pursuant to Section 12(b) of the Exchange Act.

2. On April 12, 2004, in Securities and Exchange Commission v. E. Garrett Bewkes, Jr., et al., Civil Action No. CV-04-2628 (RMB), the United States District Court for the Southern District of New York entered a final judgment permanently enjoining Robert D. Bewkes from violating Section 17(a) of the Securities Act of 1933, Section 10(b) of the Exchange Act, and Rule 10b-5 thereunder (collectively, the "antifraud provisions").

3. The Commission's Complaint alleged that on January 29, 2003, Garry Bewkes received and reviewed a confidential, negative monthly IBC financial report. On February 3, 2003, the day before a meeting of IBC's Board of Directors, Garry Bewkes telephoned Bewkes, said that IBC was doing "lousy," and advised Bewkes to invest his money elsewhere. Immediately after the phone call on February 3, 2003, Bewkes sold 16,230 shares of IBC stock held in the accounts of himself, his wife, his children, his children's nanny, his best friend, and several other clients. On February 11, 2003, IBC announced a downward revision to its earnings estimate and IBC's stock priced dropped 25% that day. As a result of Bewkes' sales on February 3, 2003, Bewkes avoided losses of $67,517 for himself and his clients. As a result of the conduct described above, Bewkes violated the antifraud provisions.

IV.

In view of the foregoing, the Commission deems it appropriate and in the public interest to impose the sanctions specified in Respondent Bewkes' Offer.

ACCORDINGLY, IT IS HEREBY ORDERED:

Pursuant to Section 15(b)(6) of the Exchange Act and Section 203(f) of the Advisers Act, that Respondent Bewkes be, and hereby is, barred from association with any broker, dealer, or investment adviser, with the right to reapply for association after five years to the appropriate self-regulatory organization, or if there is none, to the Commission. Any reapplication for association by the Respondent will be subject to the applicable laws and regulations governing the reentry process, and reentry may be conditioned upon a number of factors, including, but not limited to, the satisfaction of any or all of the following: (a) any disgorgement ordered against the Respondent, whether or not the Commission has fully or partially waived payment of such disgorgement; (b) any arbitration award related to the conduct that served as the basis for the Commission order; (c) any self-regulatory organization arbitration award to a customer, whether or not related to the conduct that served as the basis for the Commission order; and (d) any restitution order by a self-regulatory organization, whether or not related to the conduct that served as the basis for the Commission order.

By the Commission.

Jonathan G. Katz
Secretary

 

http://www.sec.gov/litigation/admin/34-49645.htm


Modified: 05/04/2004