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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. 50516 / October 12, 2004

Admin. Proc. File No. 3-11705


In the Matter of

JOSEPH T. FALCONE,

Respondent.



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ORDER INSTITUTING PUBLIC 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 Joseph T. Falcone ("Respondent").

II.

In anticipation of the institution of these administrative proceedings, Respondent has submitted an Offer of Settlement (the "Offer") to the Commission 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 Public Administrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934, Making Findings, and Imposing Remedial Sanctions ("Order"), as set forth below.

III.

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

1. At the time of the alleged misconduct, Falcone was associated with a broker-dealer registered with the Commission pursuant to Section 15(b) of the Exchange Act.

2. On April 4, 2003 an order of permanent injunction was entered by consent against Falcone, permanently enjoining him from future violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, in the civil action entitled Securities and Exchange Commission v. Larry F. Smath, Gregory R. Salvage, Joseph T. Falcone, Peter L. Cohen, Seth J. Glaser, and Frank J. Zangara, Civil Action Number CV-99-523 (TCP), in the United States District Court for the Eastern District of New York.

3. The Commission's complaint alleged that Falcone engaged in insider trading involving nonpublic advance copies of the "Inside Wall Street" ("IWS") column of Business Week magazine. Specifically, the Commission alleged that Falcone and others paid another defendant in exchange for communicating the contents of the IWS columns to them before the columns were made public, and that Falcone traded securities while in possession of the nonpublic information obtained from the IWS columns. The Commission's Complaint also alleged that Falcone recommended securities mentioned in the IWS columns to his brokerage customers, while in possession of the nonpublic contents of the IWS columns.

4. On November 9, 1999, Falcone was found guilty on thirteen counts of securities fraud in violation of Title 15 United States Code, Sections 78j(b) and 78ff, and one count of conspiracy to commit securities fraud in violation of Title 18 United States Code, Section 371. Falcone was found guilty in the United States District Court for the Eastern District of New York, in United States v. Joseph Falcone, Crim. Information No. CR-99-331-01. On November 7, 2000, a judgment in the criminal case was entered against Falcone. He was sentenced to one year probation.

5. The counts of the indictment to which Falcone was found guilty alleged, inter alia, that Falcone defrauded the securities markets by trading while in possession of material nonpublic information, and that the securities trades were conducted on national securities markets, and were conducted using instruments of interstate commerce and the mails.

IV.

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

Accordingly, it is hereby ORDERED:

Pursuant to Section 15(b)(6) of the Exchange Act, that Respondent Joseph T. Falcone be, and hereby is barred from association with any broker or dealer, 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/34-50516.htm


Modified: 10/12/2004