INVESTMENT ADVISERS ACT OF 1940
Release No. 1885 / July 10, 2000
ADMINISTRATIVE PROCEEDING
File No. 3-10249
| In the Matter of CHARLES F. PARISI, |
ORDER INSTITUTING PUBLIC |
I.
The Securities and Exchange Commission ("Commission") deems it appropriate in the public interest to institute a public administrative proceeding pursuant to Section 203(f) of the Investment Advisers Act of 1940 ("Advisers Act") against Charles F. Parisi ("Parisi").
Accordingly, IT IS HEREBY ORDERED that said proceeding be, and hereby is, instituted.
II.In anticipation of the institution of this proceeding, Parisi has submitted an Offer of Settlement ("Offer") which the Commission has determined to accept. Solely for the purpose of this proceeding and any other proceeding brought by or on behalf of the Commission or in which the Commission is a party, and without admitting or denying the findings contained in this Order, except that Respondent admits the jurisdiction of the Commission over him and over the subject matter of this proceeding and admits the entry of the judgment of permanent injunction set forth in paragraph III.C. Respondent consents to the entry of this Order Instituting Public Administrative Proceeding Pursuant To Section 203(f) Of The Investment Advisers Act Of 1940, Making Findings And Imposing Remedial Sanctions ("Order").
III.On the basis of this Order and Respondent's Offer, the Commission finds that:
A. Charles F. Parisi, age 37, resides in San Diego, California. On July 20, 1992, the Commission issued an Order Instituting Public Administrative Proceedings Pursuant to Sections 203(e), 203(f) and 203(k) of the Investment Advisers Act of 1940 and Sections 9(b) and 9(f) of the Investment Company Act of 1940, Making Findings and Imposing Remedial Sanctions (the "1992 Bar Order"). Among other things, the 1992 Bar Order barred Parisi from associating with any investment adviser or investment company with the right to reapply to the appropriate regulatory entity to become so associated after one year. Parisi never reapplied to become associated with an investment adviser or investment company.
B. On September 27, 1999, the Commission filed an action against Parisi in the United States District Court for the Southern District of California. The Complaint filed in that action alleges, among other things, that from approximately December 1992 through October 1997, Parisi, despite being subject to the 1992 Bar Order, associated with Palladian Advisers, Inc., a registered investment adviser ("Adviser"), and The Palladian Trust, a registered investment company ("Investment Company"). The Complaint alleges that Parisi associated with these entities by, among other things: providing financing for the Adviser and Investment Company; using others, such as a longtime employee (who acted as president, chief financial officer, and a shareholder of the Adviser and as president and a director of the Investment Company), to conceal his association with the Adviser and Investment Company; holding himself out to others as a representative of the Adviser and Investment Company; participating in preparing and reviewing prospectuses used by insurance companies to sell investments in the Investment Company; participating in selecting portfolio managers for the Investment Company; participating in Investment Company board meetings; and receiving compensation based on sales of investments in the Investment Company. The Complaint further alleges that Parisi's actions constituted a violation of the 1992 Bar Order and Section 203(f) of the Advisers Act.
C. On June 29, 2000, the United States District Court for the Southern District of California entered a Final Judgment of Permanent Injunction and Other Relief ("Judgment") against Parisi. The Judgment permanently enjoins Parisi from violating the 1992 Bar Order and Section 203(f) of the Advisers Act. SEC v. Charles F. Parisi, Civil Action No. 99-2079 B (NLS) (S.D. Cal.).
IV.Based on the foregoing, the Commission deems it appropriate and in the public interest to accept the Offer submitted by Parisi and to impose the remedial sanctions specified in Respondent's Offer.
Accordingly, IT IS HEREBY ORDERED, effective immediately, that Respondent Parisi be, and hereby is, barred from associating with any investment adviser.
By the Commission.
Jonathan G. KatzSecretary