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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. 50086 / July 26, 2004

ADMINISTRATIVE PROCEEDING
File No. 3-11430


In the Matter of

JOSEPH F. DESANTO,

Respondent.


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ORDER MAKING FINDINGS AND IMPOSING REMEDIAL SANCTIONS PURSUANT TO SECTION 15(b) OF THE SECURITIES EXCHANGE ACT OF 1934

I.

Respondent Joseph DeSanto ("DeSanto" or "Respondent"), pursuant to Rule 240(a) of the Rules of Practice of the Securities and Exchange Commission ("Commission") [17 C.F.R. 201.240(a)], submitted an Offer of Settlement ("Offer") in the above-captioned proceeding instituted against him on March 11, 2004, pursuant to Section 15(b) of the Securities Exchange Act of 1934 ("Exchange Act"). The Commission deems it appropriate to accept the Offer.

II.

Solely for the purposes 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 contained herein, except with respect to the jurisdiction of the Commission over him, over the subject matter of these proceedings, and the findings contained in Section III. B below, which are admitted, the Respondent consents to the issuance of this Order Making Findings and Imposing Remedial Sanctions Pursuant to Section 15(b) of the Securities Exchange Act of 1934 ("Order").

III.

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

A. DeSanto, 34 years old, is a former resident of Pompano Beach, Florida. From October 1996 to August 1998, DeSanto was associated as an undisclosed principal at The Hamilton Shea Group, Inc. ("Hamilton Shea"), a broker-dealer registered with the Commission.

B. On May 21, 2002, DeSanto pled guilty to one count of mail fraud in violation of Title 18 United States Code, Section 1341, before the United States District Court for the Middle District of Florida, in United States v. DeSanto, et al., Case No. 01-CR-350-ALL. On December 6, 2002, a judgment in the criminal case was entered against DeSanto. He was sentenced to a prison term of five years followed by three years of supervised release.

C. The count of the criminal information to which DeSanto pled guilty alleged that DeSanto knowingly and willfully defrauded investors and obtained money and property by means of materially false and misleading statements, through the use of the United States mails and commercial interstate carriers. The indictment alleged that from at least January 1993 through December 1998, DeSanto used undisclosed nominee accounts to gain control over the trading in, and to artificially inflate the prices of, the securities of Novatek International, Inc., among other securities. In addition, the indictment alleged that DeSanto directed registered representatives at Hamilton Shea to: (1) make baseless price predictions and other material misrepresentations and omissions concerning these securities; (2) engage in or enforce a "no-net-sales" policy with respect to these securities by refusing to execute customer sell orders unless registered representative could find another customer at the firm to purchase the stock; and, (3) effect unauthorized purchases of securities in the accounts of firm customers.

D. Respondent participated in an offering of Novatek International, Inc. stock, which is a penny stock.

IV.

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

Accordingly, it is hereby ORDERED:

A. Pursuant to Section 15(b)(6) of the Exchange Act that Respondent DeSanto be, and hereby is barred from association with any broker or dealer. 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; and,

B. Respondent DeSanto be, and hereby is, barred from participating in any offering of a penny stock, including: acting as a promoter, finder, consultant, agent or other person who engages in activities with a broker, dealer or issuer for purposes of the issuance or trading in any penny stock, or inducing or attempting to induce the purchase or sale of any penny stock.

For the Commission, by its Secretary, pursuant to delegated authority.

Jonathan G. Katz
Secretary

 

http://www.sec.gov/litigation/admin/34-50086.htm


Modified: 07/28/2004