Initial Decision of an SEC Administrative Law Judge
In the Matter of
In the Matter of
HAMILTON BANCORP, INC.
February 24, 2003
|APPEARANCES:||Kerry A. Zinn for the Division of Enforcement, Securities and Exchange Commission.
Bernardo Burstein for Respondent.
|BEFORE:||Robert G. Mahony, Administrative Law Judge|
The Securities and Exchange Commission (Commission) instituted this proceeding by an Order Instituting Proceeding (OIP) on December 16, 2002, pursuant to Section 12(j) of the Securities Exchange Act of 1934 (Exchange Act) to determine whether Respondent Hamilton Bancorp, Inc. (Bancorp) failed to comply with Section 13(a) of the Exchange Act and Rules 13a-1 and 13a-13 thereunder. Bancorp filed its Answer on January 10, 2003. A prehearing conference was held on January 27, 2003, during which the Division of Enforcement (Division) was granted leave to file a motion for summary disposition, pursuant to Rule 250 of the Commission's Rules of Practice, 17 C.F.R. § 201.250. On January 28, 2003, the Division filed a Motion and Memo of Law in Support of Rule 250 Summary Disposition Against Bancorp. Bancorp filed its Response on January 30, 2003.
The OIP alleges that Bancorp failed to file an annual report on Form 10-K for the year ended December 31, 2001. The OIP further alleges that Bancorp failed to file quarterly reports on Form 10-Q for the quarters ended March 31, 2002, and June 30, 2002. Based on the above, the OIP alleges that Bancorp failed to comply with Section 13(a) of the Exchange Act and Rules 13a-1 and 13a-13 thereunder. The Division seeks the revocation of Bancorp's securities registration pursuant to Section 12(j) of the Exchange Act.
Bancorp maintains that it was unable to file an annual report on Form 10-K for the year ended December 31, 2001, due to a takeover of Hamilton Bank N.A. (Hamilton Bank), a wholly owned subsidiary of Bancorp, as well as the appointment of the Federal Deposit Insurance Corporation (FDIC) as receiver for the bank. Bancorp further contends that the reasons cited above also prevented it from filing quarterly reports on Form 10-Q for the quarters ended March 31, 2002, and June 30, 2002. Bancorp states that it does not have the staff or funds to perform the necessary financial audit or comply with the periodic reporting requirements of Section 13 of the Exchange Act and the Rules thereunder because Hamilton Bank is under FDIC receivership and is being liquidated. Bancorp further argues that the Office of the Comptroller of the Currency and the FDIC have maintained an adversarial relationship and attitude toward Bancorp, which have prevented it from preparing the required periodic reports. Lastly, Bancorp contends that its failure to make the aforementioned filings has not caused harm to the public or threatened to cause harm to the public because the takeover of Hamilton Bank and its financial impact on Bancorp has been a matter of public coverage in the press and a matter of public information.
Rule 250(a) of the Commission's Rules of Practice, 17 C.F.R. § 201.250(a), provides that after a respondent's answer has been filed and documents have been made available to that respondent for inspection and copying, a party may make a motion for summary disposition of any or all allegations of the OIP with respect to that respondent. The facts of the pleadings of the party against whom the motion is made shall be taken as true, except as modified by stipulations or admissions made by that party, by contested affidavits, or by facts officially noted pursuant to Rule 323 of the Commission's Rules of Practice, 17 C.F.R. § 201.323.
Rule 250(b) of the Commission's Rules of Practice, 17 C.F.R. § 201.250(b), requires the hearing officer to promptly grant or deny a motion for summary disposition or shall defer decision on the motion. The hearing officer may grant the motion for summary disposition if there is no genuine issue with regard to any material fact and the party making the motion is entitled to a summary disposition as a matter of law.
Bancorp is registered with the Commission pursuant to Section 12(g) of the Exchange Act and has been registered since March 5, 1997. Bancorp is the holding company for Hamilton Bank, a wholly-owned subsidiary of Bancorp, and is based in Miami, Florida. On January 11, 2002, the Office of the Comptroller of the Currency closed down Hamilton Bank and appointed the FDIC as receiver for the bank. Bancorp has not engaged in any business activities since January 11, 2002, and has no other continuing business operations. Bancorp admits that it failed to file an annual report on Form 10-K for the year ended December 31, 2001, and also failed to file quarterly reports on Form 10-Q for the quarters ended March 31, 2002, and June 30, 2002. Bancorp does not contest that its securities registration should be revoked.
Section 12(j) of the Exchange Act authorizes the Commission to revoke the registration of a security if the Commission finds that the issuer of such security has failed to comply with any provision of the Exchange Act or the Rules thereunder. Section 13(a) of the Exchange Act and Rules 13a-1 and 13a-13 required Bancorp to file annual and quarterly reports. Bancorp's answer to the OIP acknowledges that it did not file an annual report on Form 10-K for the year ended December 31, 2001, or quarterly reports on Form 10-Q for the quarters ended March 31, 2002, and June 30, 2002. Therefore, Bancorp has failed to comply with the provisions of the Exchange Act.1 Accordingly, Bancorp's securities registration will be revoked.
IT IS ORDERED that the Division of Enforcement's Motion for Summary Disposition is GRANTED.
IT IS FURTHER ORDERED that based on the findings and the conclusions set forth above, and pursuant to Section 12(j) of the Securities Exchange Act of 1934, that the registration of Hamilton Bancorp, Inc.'s securities be, and hereby is, REVOKED.
This Order shall become effective in accordance with and subject to the provisions of Rule 360 of the Commission's Rules of Practice, 17 C.F.R. § 201.360. Pursuant to that rule, a petition for review of this Initial Decision may be filed within twenty-one days after service of the decision. It shall become the final decision of the Commission as to each party who has not filed a petition for review pursuant to Rule 360(d)(1) within twenty-one days after service of the Initial Decision upon it, unless the Commission, pursuant to Rule 360(b)(1), determines on its own initiative to review this Initial Decision as to any party. If a party timely files a petition for review, or the Commission acts to review as to a party, the Initial Decision shall not become final as to that party.
Robert G. Mahony
Administrative Law Judge
1 The Division requests that the factors listed in Steadman v. SEC, 603 F.2d 1126, 1140 (5th Cir. 1979), be used to decide whether Bancorp's securities registration should be revoked. While Bancorp has consented to a revocation of its registered securities, it argues against applying the Steadman factors. Any discussion of the Steadman factors is unnecessary in light of the parties' agreement that Bancorp's securities registration should be revoked.
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