UNITED STATES OF AMERICA Before the SECURITIES AND EXCHANGE COMMISSION SECURITIES EXCHANGE ACT OF 1934 Release No. 37661 / September 9, 1996 ADMINISTRATIVE PROCEEDING File No. 3-9072 ----------------------------- : In the Matter of : ORDER INSTITUTING PROCEEDINGS : PURSUANT TO SECTION 8A OF THE : SECURITIES ACT OF 1933 AND JEFFREY WEISSMAN and : SECTIONS 15(b)(6), 19(h) AND MARTIN WEISSMAN, : 21C OF THE SECURITIES : EXCHANGE ACT OF 1934, MAKING : FINDINGS AND IMPOSING REMEDIAL Respondents. : SANCTIONS : ------------------------------ I. The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest that public administrative proceedings be, and they hereby are, instituted: (a) pursuant to Section 8A of the Securities Act of 1933 ("Securities Act") and Sections 15(b)(6), 19(h) and 21C of the Securities Exchange Act of 1934 ("Exchange Act") to determine whether Jeffrey Weissman ("Weissman") violated Section 17(a) of the Securities Act and Sections 9(a)(2), 9(a)(4) and 10(b) of the Exchange Act and Rule 10b-5 thereunder and aided and abetted and caused violations of Sections 7(c) and 15(c)(1) of the Exchange Act and Rule 15c1-2 thereunder and Regulation T promulgated by the Federal Reserve Board; and (b) pursuant to Section 8A of the Securities Act and Section 21C of the Exchange Act to determine whether Martin Weissman was a cause of violations of Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. In anticipation of the institution of these administrative proceedings, the respondents have submitted Offers of Settlement ("Offers") to the Commission, which the Commission has determined to accept. Solely for the purpose of these proceedings and any other proceeding 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, the Respondents, by their Offers, consent to the findings and the imposition of the remedial ==========================================START OF PAGE 2====== sanctions set forth below. Accordingly, IT IS ORDERED that proceedings against Jeffrey Weissman and Martin Weissman be, and hereby are, instituted. II. FACTS The Commission finds the following:-[1]- A. SUMMARY Jeffrey Weissman carried out a manipulation of the market for the common stock of Health Professionals, Inc. ("HPI") during three periods between October 1991 and June 1993. During the first period of manipulation -- October 28, 1991 through November 12, 1991 -- the price of HPI common stock rose from $11.50 per share to $21 per share. Weissman effected this price increase through aggressive marketing, a no-net-selling policy, and selective placement of buy orders on the American Stock Exchange ("Amex"). During this period, Weissman's father Martin Weissman, who was HPI's chairman, sold 40,000 HPI shares for a profit of $161,250. In the second period of manipulation -- January 27, 1992 through February 12, 1992 -- Weissman engineered a short squeeze that, combined with other trading, raised the price of HPI from $16 1/8 to $23 1/4 per share. During these first two manipulations, Weissman was a registered representative with the brokerage firm D.H. Blair & Co., Inc. ("Blair"). By the third period -- May 24, 1993 through June 25, 1993 -- Weissman had started his own firm, A.R. Baron & Co., Inc. ("Baron"). The third period of manipulation began the first trading day after a negative article on HPI appeared in Barron's magazine. Weissman reversed a decline in the price of HPI common stock and delayed the eventual collapse of the price. B. RESPONDENTS AND RELEVANT ENTITIES 1. Respondents a. Jeffrey Weissman, age 32, resides in New York, New York. Weissman was a registered representative with Blair from August 1985 through August 17, 1992, and with Baron from August 21, 1992, through December 1993. Weissman was chairman and chief executive officer at Baron from August 21, 1992, through ---------FOOTNOTES---------- -[1]- The findings herein are made pursuant to Offers of Settlement submitted by Jeffrey Weissman and Martin Weissman. These findings are not binding on any other person named as a defendant or respondent in this or any other proceeding. ==========================================START OF PAGE 3====== September 1993. Weissman was a registered principal with Baron from February 2, 1993 through December 1993. In August 1993, Weissman suffered severe head injuries as a result of a motorcycle accident. Weissman is not presently associated with any broker or dealer and is not engaged in any other employment. b. Martin Weissman, age 60, was the chairman of HPI (and its predecessor corporation) from its founding in the 1970's until May 1992. Martin Weissman is the father of Jeffrey Weissman. 2. Other Entities a. Health Professionals, Inc. is a Delaware corporation with its principal place of business in Fort Lauderdale, Florida. Prior to November 26, 1991, HPI was known as Professional Care, Inc. HPI is registered with the Commission under Section 12(b) of the Exchange Act. At all relevant times, HPI was listed and traded on both the Amex and on Nasdaq. b. D.H. Blair & Co., Inc. is a New York corporation with its principal place of business in New York, New York. Blair is registered with the Commission as a broker-dealer pursuant to Section 15(b) of the Exchange Act. c. A.R. Baron & Co., Inc. is a Delaware corporation with its principal place of business in New York, New York. At all relevant times after Baron began operations in 1992, Baron was registered with the Commission as a broker-dealer pursuant to Section 15(b) of the Exchange Act. C. THE 1991 MANIPULATION In October 1991, Weissman was a registered representative of Blair and had assembled a group of at least six other Blair brokers known as the "Weissman Group." These brokers followed Weissman's directions and limited their recommendations and retail activities to only a few securities, including the securities of HPI, in which Blair made a market. Weissman and other Weissman Group brokers had been aggressively recommending HPI securities to their customers, and by October 1991, over 70% of the common stock of HPI was held in Blair customer accounts. Because these accounts held such a high proportion of HPI's common stock, Weissman was able to control its supply and demand. Between October 28, 1991 and November 12, 1991, Weissman manipulated the market for HPI common stock, causing the price to increase by 83%, from a low of $11.50 per share to a high of $21 per share. To carry out the manipulation, Weissman exploited the fact that HPI was listed on the Amex as well as traded over the counter. Weissman determined whether trades made by Weissman Group brokers would be executed on the Amex or over the counter. ==========================================START OF PAGE 4====== Because the Amex market for HPI common stock was thinly traded, with offer quotes typically for 500 shares or less, Weissman often could increase the Amex price of HPI by directing to the Amex buy orders that were large enough to exhaust the offer size, and thus cause the specialist to increase the offer price. After the Amex offer was raised, Weissman directed Weissman Group customer trades to be executed over the counter at the price set on the Amex. Weissman enforced within his group at Blair a no-net-selling rule on HPI common stock retail trades. Weissman often would not approve the execution of a customer sell order unless the broker had a corresponding buy order with which to cross the sell order. Weissman also encouraged the group's members to enter unauthorized purchase orders for HPI common stock. Weissman's no-net-selling policy kept the price of HPI elevated by artificially limiting the available supply on the Amex. In addition, Weissman directed the Weissman Group members to engage in high-pressures selling tactics and to make unsubstantiated price predictions in their solicitations of customers to purchase HPI stock. During this period, when his son had manipulated the price of HPI stock up to $13.75 per share, Martin Weissman sold 15,000 HPI shares, and when his son manipulated the price up to $17 per share, he sold an additional 25,000 shares. Martin Weissman made total profits of $161,250 from those sales. At the time, Martin Weissman was HPI's chairman and chief executive officer, and from time to time, he provided information regarding HPI to brokers at Blair and at Baron. Martin Weissman thus assisted his son's sales efforts with regard to HPI stock. The Commission concludes that at the time Martin Weissman undertook these two sales of HPI shares, he knew or should have known that he was selling HPI shares at a price that his son had artificially inflated. D. THE 1992 MANIPULATION 1. Purchases to Meet Selling Demand On the weekend of January 25 and 26, 1992, Barron's magazine published an article, dated January 27, 1992, that was extremely critical of HPI. Among other things, the Barron's article raised doubts about HPI's ability to participate in Medicare/Medicaid programs while HPI continued to be managed by Martin Weissman. On January 27, 1992, the Monday after the Barron's article appeared, trading in HPI stock was delayed until 2:15 p.m. because sell orders for HPI stock on the Amex greatly exceeded buying interest. Shortly before the specialist opened the HPI trading, HPI sell orders totalled around 50,300 shares with only 500 shares on the buy side. Then Weissman entered five separate buy limit orders totalling about 31,200 shares at $17 3/8 per share. Weissman's limit orders stabilized the price of the stock ==========================================START OF PAGE 5====== by setting a price at which a buyer would be willing to purchase, and trading opened at $17 3/8 per share, Weissman's limit price. However, despite Weissman's efforts, the price of HPI common stock closed on January 27, 1992, at $16 1/8 per share, down $1 5/8 from the previous close. During the two-week period from January 27, 1992, through February 7, 1992, Weissman and other members of the Weissman Group purchased on the Amex for Blair customer accounts a total of approximately 182,000 shares, accounting for 80% or more of the total Amex volume for the period. During the same period, Weissman and other members of the Weissman Group sold on the Amex only 1,075 shares. On February 7, 1992, HPI closed at $17 1/8 per share. During this two-week period, Weissman maintained the no-net- selling policy among Weissman Group members with respect to HPI stock. Weissman continued to control the routing of HPI trade orders either to the Amex or over the counter and continued to dominate and control the HPI market. 2. Short Squeeze During this time, Blair had requested that its clearing agent not loan out shares of a number of stocks in which Blair made a market, including HPI. Blair's clearing agent honored this request, but when HPI changed its name from Professional Care, Inc. to HPI, the clearing agent began to loan out the HPI shares because of a clerical error. Shortly after January 27, 1992, in order to squeeze short sellers, Weissman asked the clearing agent to call in approximately 140,000 HPI shares that had been loaned out. On February 10, 1992, in a buy-in to cover loaned shares that had not been returned after the clearing agent's call-in, the clearing agent purchased 21,900 HPI shares on the Amex. On February 10, 1992, the price of HPI common stock closed at $19 1/2 per share, up $2 3/8 per share from the previous close. On February 11, 1992, various short sellers purchased HPI stock to cover their positions, causing the price of HPI stock to soar to $23 per share before the Amex halted trading at 3:30 p.m. On February 12, 1992, HPI's stock price climbed to a high of $23 1/4 as the clearing agent executed additional buy-ins and short sellers purchased to cover their positions. Thus, by meeting selling demand with purchases and by squeezing the shorts, Weissman caused HPI's stock price to increase 44% in two and one-half weeks, even though at the time the company was subject to negative publicity and massive selling. ==========================================START OF PAGE 6====== E. THE 1993 MANIPULATION 1. Baron Absorbed Sell Volume By the time of the third manipulation, Weissman was associated with Baron, a firm he and others founded. On Saturday, May 22, 1993, Barron's magazine published another negative article about HPI.-[2]- That weekend, Weissman directed others at Baron to place buy orders on the Amex to prevent a price decline. On Monday, May 24, 1993, before the opening of trading, Baron placed on the Amex a purchase order for 25,000 HPI shares. The Amex market opened at $11 7/8, down $1/2 from the previous close, with Baron's purchase order absorbing most of the selling.-[3]- Within the first five minutes of trading, Baron purchased over 60,000 shares. Despite Baron's purchases, HPI's stock price dropped to a low of $10 1/2 per share at 9:37 a.m. Baron continued to place purchase orders on the Amex, purchasing approximately 120,000 shares within the first 30 minutes of trading and a total of 300,000 shares for the day. That day Baron did not sell a single share on the Amex. By the end of trading on May 24, HPI closed at $12 per share, down $3/8 from the previous close but up from the day's low. Baron's Amex purchases, which amounted to 66% of the Amex volume, had offset heavy selling and had prevented HPI's stock price from falling much farther. Over the next few weeks, Baron continued to purchase HPI shares on the Amex in the firm trading account. Between May 24, 1993, and June 9, 1993, Baron's trading account purchased on the Amex a total of approximately 780,000 HPI shares and sold on the Amex only 1,000 HPI shares. Baron's Amex purchases for the period constituted 64% of the Amex volume. These purchases absorbed much of the supply of HPI on the Amex and prevented the price of HPI from falling precipitously. ---------FOOTNOTES---------- -[2]- Among other things, the article, dated May 24, 1993, pointed out the apparent lack of a relationship between HPI's market price and its financial performance. The article pointed out that HPI's most recent quarterly report showed total revenues of only $2.2 million and operating profits of $32,000, but at then-current market price for its stock, HPI had a market valuation of $175 million, roughly 20 times its annual sales. -[3]- HPI's stock split 2 for 1 in March 1992. The prices quoted for all time periods in 1993 reflect the split. ==========================================START OF PAGE 7====== 2. Baron Placed HPI Stock into Customer Accounts Baron placed its May 24, 1993 Amex purchases of HPI stock in the firm trading account. To prevent that concentration of shares from adversely affecting Baron's net capital, Weissman caused the shares to be placed in customer accounts. That day, beginning around 3:00 p.m., when HPI stock was trading at approximately $12 per share, Baron brokers, at Weissman's behest, engaged in massive unauthorized transactions that transferred or parked over 200,000 shares from Baron's inventory to customer accounts. Near the end of each day during this period, the Baron brokers moved HPI stock into customer accounts by placing unauthorized purchases, sometimes convincing customers to accept the trades after the fact. In addition, Baron brokers aggressively solicited customers with unfounded optimistic claims about HPI's short-term prospects,-[4]- and did not tell their customers that Baron was making large purchases of HPI stock on the Amex to prevent its price from falling. Because the Baron brokers placed unauthorized purchases, they were faced with transactions that were not paid for on settlement date. In some cases, to pay for unauthorized purchases of HPI stock, the Baron brokers sold, without authority, other fully-paid securities in the customers' accounts. In other cases they delayed the liquidation of the unauthorized purchases by placing unauthorized requests for extension of payment. When HPI stock was liquidated because of nonpayment, the Baron brokers sold the position to the trading account and often resold the position to another customer account in another unauthorized transaction. The unauthorized trading of the Baron brokers caused some customer accounts in which shares were liquidated for nonpayment to be placed on 90-day restriction under Regulation T promulgated by the Federal Reserve Board. While an account is thus restricted, cash payment must be made at the time of any trade made in the account. Weissman and others circumvented the restriction by opening and directing other Baron brokers to open unauthorized new accounts, called "priority" accounts, for customers that had their accounts restricted. Weissman and other ---------FOOTNOTES---------- -[4]- A frequently-made false claim during the period was that HPI's stock price was about to go up because the company would be making an important announcement at the Berlin AIDS conference in early June 1993. Baron brokers also falsely told customers that a large pharmaceutical company was going to buy a large position in HPI and that this would increase HPI's stock price. ==========================================START OF PAGE 8====== Baron brokers transacted securities purchases on credit for the new accounts. In June 1993, Weissman instructed Baron's trader not to execute customer sell orders for HPI stock. Weissman insisted that all sales be approved by him. As a result, customers were unable to place HPI stock sale orders. 3. Price Decline Despite Baron's buying efforts, HPI's stock price declined. By mid-June 1993, Baron had exhausted its capacity to purchase HPI stock on the Amex and subsequently place it in customer accounts. Baron's clearing firm refused to accept further requests for extension of payment and required Baron to deposit an additional $1 million to its deposit account. In order to raise the cash needed for its deposit, Baron became a net seller on the Amex, selling shares the trading account accumulated from in-house liquidation of customer accounts. On June 24, 1993, Baron sold about 750,000 shares on the Amex, at $4 1/2 per share. Because there was insufficient buying interest on the Amex for HPI stock, Weissman and others personally purchased an aggregate of 363,500 shares. On June 25, 1993, Baron liquidated over 500,000 shares on the Amex at an average price of $2.61 per share. On June 29, 1993, Baron ceased making a market in HPI stock. III. OPINION A. MARKET MANIPULATION Section 9(a)(2) of the Exchange Act, which prohibits the manipulation of the prices of securities listed for trading on a national exchange, makes it unlawful for a person to engage in a series of transactions that creates actual or apparent activity or raises or depresses the stock's price when done for the purpose of inducing others to buy or sell the security. Section 9(a)(4) of the Exchange Act prohibits a person purchasing or offering to purchase or selling or offering to sell securities registered on a national securities exchange from making false or misleading statements for the purpose of inducing the purchase or sale. These manipulative practices also violate Section 10(b) and Rule 10b-5 of the Exchange Act. Section 10(b) and Rule 10b-5, however, do not require a showing of manipulative purpose. Instead "[i]t is sufficient for the person to engage in a course of business which operates as a fraud or deceit as to the nature of the market for the security." In re Michael Batterman, 46 ==========================================START OF PAGE 9====== S.E.C. 304, 305 (1976). Accord United States v. Charnay, 537 F.2d 341, 350-51 (9th Cir. 1976). Furthermore, the manipulative conduct at issue in this case violates Section 17(a) of the Securities Act to the extent that such acts were committed in connection with the sale of or offer to sell the manipulated stocks. Weissman violated Section 9(a)(2) of the Exchange Act by engaging in a series of transactions that raised the price of HPI stock -- Weissman's carefully timed purchases of HPI stock on the Amex placed to raise the price of HPI stock or to keep it from falling. During the 1991 manipulation, he placed purchases on the Amex to exhaust the offer size and drive up the price of HPI stock which was thinly traded on the Amex. During the 1992 manipulation, Weissman engineered a short squeeze that drove up the price of HPI stock. During the 1992 and 1993 manipulations, Weissman placed orders on the Amex that soaked up selling pressure and prevented the price of HPI stock from falling. Overall, Weissman's domination and control of the market for HPI securities enabled him to determine the price and volume of trading of HPI stock independent of a competitive, independent market. Conduct of a broker or dealer that is considered manipulative under Sections 9(a) and 10(b) also violates Section 15(c)(1) of the Exchange Act and Rule 15c1-2 promulgated thereunder with respect to securities not traded on an exchange. See e.g., In re Barrett & Co., 9 S.E.C. 319, 328 (1941). Weissman aided and abetted and caused Baron's violations of these provisions. By making false statements and omissions about HPI and by refusing to execute customer sale orders, Weissman violated Section 17(a) of the Securities Act and Sections 9(a)(4) and 10(b) of the Exchange Act and Rule 10b-5 thereunder. By assisting Weissman in his sales efforts, Martin Weissman was a cause of violations of Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. The Commission concludes that Martin Weissman improperly benefitted from such assistance by selling HPI stock when he knew or should have known that his son was manipulating the market. B. CREDIT VIOLATIONS Section 7(c) of the Exchange Act prohibits a broker-dealer from extending or maintaining credit or arranging for the extension or maintenance of credit to or for any customer in contravention of the regulations promulgated by the Federal Reserve Board. Federal Reserve Board Regulation T, 12 C.F.R.  220.1 et seq., imposes payment rules on securities transactions and requires a broker to obtain full cash payment for customer purchases in a cash account within one payment period; during the ==========================================START OF PAGE 10====== relevant time, this was seven business days. 12 C.F.R.  220.2(w) and 220.8(b)(1). If a customer has not paid for a stock purchase within the required time, then the broker must promptly cancel or otherwise liquidate the transaction or part of the transaction for which the customer has not made full cash payment. 12 C.F.R.  220.8(b)(4). Under certain circumstances, a broker may apply to its examining authority to extend the time for payment. Such extensions are legitimate for good-faith customer orders in which the customer has difficulty getting the payment to the broker on a timely basis, such as when a check is delayed in the mail. Weissman aided and abetted and caused Baron's violations of the credit provisions by making and causing others to make numerous extension requests in bad faith. Weissman placed extension requests on unauthorized transactions -- the customers had not timely paid because they had not authorized the purchase. Obtaining extensions of payment enabled Weissman to hold unauthorized purchases of HPI stock in customer accounts for an additional seven days until the stock could be moved to the account of another customer or the transaction liquidated. If a security is sold without having been previously paid for in full by the customer, the privilege of delaying payment beyond the trade date is withdrawn for 90 days following the date of sale of the security. 12 C.F.R.  220.8(c). Weissman, and others at his direction, circumvented this provision by opening "priority" accounts for customers whose accounts were put on 90- day restriction. Thus Weissman further aided and abetted and caused Baron's violations of the credit provisions. IV. FINDINGS Based on the above, the Commission finds that Jeffrey Weissman willfully violated Section 17(a) of the Securities Act and Sections 9(a)(2), 9(a)(4) and 10(b) of the Exchange Act and Rule 10b-5 thereunder and willfully aided and abetted and caused violations of Sections 7(c) and 15(c)(1) of the Exchange Act and Rule 15c1-2 thereunder and Regulation T promulgated by the Federal Reserve Board; and that within the meaning of Section 8A of the Securities Act and Section 21C of the Exchange Act, Martin Weissman was a cause of violations of Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. Jeffrey Weissman has submitted a sworn financial statement and other evidence and has asserted his financial inability to pay prejudgment interest on disgorgement or a civil penalty, unless he receives a certain payment. The Commission has reviewed the sworn financial statement and other evidence ==========================================START OF PAGE 11====== provided by Weissman and has determined that Weissman does not have the financial ability to pay prejudgment interest on disgorgement or a civil penalty unless he receives a certain account receivable from Baron referred to in Section VI.(1)(d) below. V. OFFERS OF SETTLEMENT The Respondents have submitted Offers of Settlement in which they, without admitting or denying the findings herein, consent to the Commission's issuance of this Order which makes findings, as set forth above, and orders that: (1) Jeffrey Weissman: (a) be barred from association with any broker, dealer, investment company, investment adviser or municipal securities dealer; (b) cease and desist from committing or causing any violations of Section 17(a) of the Securities Act and Sections 7(c), 9(a)(2), 9(a)(4), 10(b) and 15(c)(1) of the Exchange Act and Rules 10b-5 and 15c1-2 thereunder and Regulation T promulgated by the Federal Reserve Board; (c) disgorge $350,000; and (d) pay a civil penalty of $100,000, subject to the contingency described below; and (2) Martin Weissman: (a) cease and desist from committing or causing any violations of Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder; and (b) disgorge $161,250 plus prejudgment interest of $61,946. VI. ORDER Accordingly, IT IS HEREBY ORDERED that: (1) Jeffrey Weissman: (a) be, and hereby is, barred from association with any broker, dealer, investment company, investment adviser or municipal securities dealer; (b) cease and desist from committing or causing any violations of Section 17(a) of the Securities Act and Sections 7(c), 9(a)(2), 9(a)(4), 10(b) and 15(c)(1) of the Exchange Act and Rules 10b-5 and 15c1-2 thereunder and Regulation T promulgated by the Federal Reserve Board; (c) disgorge $350,000 to be paid as follows: (1) a payment of $115,000 within 30 days of the entry of the administrative order against him; (2) the remaining $235,000 to be paid in monthly installments of $7,000 each paid over the next 33 months, with a final payment of $4,000 in the 34th ==========================================START OF PAGE 12====== month; and (3) if Weissman receives any proceeds of the escrow account held by Morrison, Cohen, Singer & Weinstein in connection with his matrimonial action, he shall remit to the Commission, within 30 days of receipt of any part of it, 75% of those proceeds. This payment will prepay Weissman's installment obligation under paragraph (c)(2), above, beginning with the final payments; (d) pay a civil penalty of $100,000; payment of this penalty is contingent upon Weissman collecting payment on his account receivable from A.R. Baron & Co., Inc.; any payment that Weissman receives on this account receivable (but not any part of the receivable that a court may order to be paid to Weissman's wife pursuant to their matrimonial action) shall be paid to satisfy the penalty and disgorgement as follows: (1) of the first $200,000 that Weissman receives, Weissman shall pay, within 30 days of his receipt of the money, 50% to the Commission to satisfy the penalty imposed against him; (2) the next $50,000 that Weissman receives, Weissman may use to satisfy reasonable expenses incurred in collecting this receivable; however, if such expenses are less than $50,000, the difference between the $50,000 and the expenses shall be distributed according to paragraph (d)(3), below; and (3) 50% of all other payments that Weissman receives from the receivable shall be paid to the Commission, within 30 days of Weissman's receipt of the money, to prepay Weissman's installment obligation under paragraph (c)(2), above, beginning with the final payments, until his entire disgorgement obligation has been discharged. If, at any time, the Commission obtains information that the sworn financial statements submitted by Weissman to the Commission were misleading, inaccurate, or incomplete in any material respect as of the time such representations were made, the Commission may, in its sole discretion, move for an order imposing the maximum amount of prejudgment interest and penalties allowed by law. In the event that the Commission makes such a motion, Weissman shall not contest against the Commission the allegations in the Order issued by the Commission in this matter or otherwise claim that he is not liable for and should not pay prejudgment interest and penalties because he did not willfully violate or willfully aid and abet or cause violations of one or more provisions of the ==========================================START OF PAGE 13====== securities laws alleged by the Commission in its Order. In connection with such motion, the Commission may also request discovery and/or seek all available remedies, including, by not limited to, forfeiture of concealed assets; (e) pay postjudgment interest (calculated pursuant to 28 U.S.C. 1961) on any of the above payments that are not timely paid according to the schedule set out above; and (f) make all payments by U.S. postal money order, certified check, bank cashier's check, or bank money order, made payable to the Securities and Exchange Commission and shall be transmitted by certified mail to the Comptroller, U.S. Securities and Exchange Commission, Mail Stop 2-5, 450 Fifth Street, N.W., Washington, DC 20549, under cover of a letter that identifies the respondent and the name and file number of this proceeding. A copy of the cover letter and of the form of payment shall be simultaneously transmitted to counsel for the Commission; and (2) Martin Weissman: (a) cease and desist from committing or causing any violations of Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder; (b) disgorge $161,250 plus prejudgment interest of $61,946; and (c) make payment of disgorgement and interest within sixty (60) days of entry of this Order by U.S. postal money order, certified check, bank cashier's check, or bank money order, made payable to the Securities and Exchange Commission and transmitted by certified mail to the Comptroller, U.S. Securities and Exchange Commission, Mail Stop 2-5, 450 Fifth Street, N.W., Washington, DC 20549, under cover of a letter that identifies the respondent and the name and file number of this proceeding. A copy of the cover letter and of the form of payment shall be simultaneously transmitted to counsel for the Commission. The disgorgement may be distributed according to a plan established by the Commission. By the Commission. ==========================================START OF PAGE 14====== Jonathan G. Katz Secretary