Finality Order of an Initial Decision of an SEC Administrative Law Judge
In the Matter of
In the Matter of
MGSI SECURITIES, INC.
ORDER MODIFYING SANCTIONS AND NOTICE THAT INITIAL DECISION, AS MODIFIED, IS FINAL
On January 12, 2000, the administrative law judge issued an initial decision in this proceeding.1 Among other things, the law judge found that MGSI Securities, Inc. was in default. The law judge revoked MGSI's registration as a broker and dealer and ordered MGSI to cease and desist from the conduct charged in the Order Instituting Proceedings.2 The Order Instituting Proceedings charged MGSI with failure reasonably to supervise, with a view to preventing violations of the securities laws.
The time for filing a petition for review of the initial decision has expired. No such petition has been filed. The Commission has determined to review the decision on its own initiative for the limited purpose described below.
Rule of Practice 155 grants the hearing officer the authority "to determine the proceeding against" a party that defaults "upon consideration of the record, including the order instituting proceedings."3 While the Order Instituting Proceedings in this matter was brought under both Section 8A of the Securities Act of 1933 and Section 21C of the Securities Exchange Act of 1934,4 the order did not seek a cease and desist order against MGSI pursuant to those sections. Rather,the order requested only an accounting and disgorgement, as well as revocation of MGSI's registration as a broker and dealer. The law judge therefore did not have the authority to impose a cease-and-desist order on MGSI.
Accordingly, IT IS ORDERED that the sanction imposed by the administrative law judge on MGSI Securities, Inc. requiring MGSI to cease and desist from violations of the securities laws be, and it hereby is, set aside.
Notice is hereby given, pursuant to Rule 360(e) of the Commissions's Rules of Practice5 that, as modified above, the initial decision of the administrative law judge has become the final decision of the Commission.
Accordingly, IT IS HEREBY ORDERED that the registration of MGSI Securities, Inc. as a broker and dealer be, and hereby is, revoked.
By the Commission.
Jonathan G. Katz
1 MGSI Securities, Inc., Initial Decision Rel. No. 156 (Jan. 12, 2000) __ SEC Docket __.
2 The law judge also denied the Division's motion to require MGSI to pay disgorgement. In the same decision, the law judge dismissed the proceeding as to other respondents.
3 17 C.F.R. § 201.155.
4 15 U.S.C.§§ 77h-1, 78u-3.
5 17 C.F.R. § 201.360(e).
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