IN THE UNITED STATES DISTRICT COURT
1. The plaintiff, Securities and Exchange Commission ("Commission"), for its Complaint alleges that:
2. Defendants James Vincent O'Brien ("O'Brien") and Traders Access Center, Inc. ("Traders Access Center" or the "Company"), have engaged in acts, practices and courses of business which constitute violations of Section 15(a) of the Securities Exchange Act of 1934 ("Exchange Act") [15 U.S.C. Section 78o(a)] through their operation of Traders Access Center as an unregistered securities broker.
3. Defendant O'Brien has associated with a securities broker, Traders Access Center, in violation of a 1977 Order from the Commission prohibiting him from being associated with a broker or dealer.
JURISDICTION AND VENUE
4. Plaintiff Commission brings this action pursuant to Sections 21(d) and 21(e) of the Exchange Act, as amended, [15 U.S.C. Sections 78u(d) and (e)], to enjoin O'Brien and Traders Access Center from engaging in the acts, practices and courses of business herein alleged and for other relief.
5. Plaintiff Commission also brings this action pursuant to Section 21(e) of the Exchange Act [15 U.S.C. § 78u(e)], to seek an Order of the Court directing Defendant O'Brien to comply with the Commission's Order barring him from association with any securities broker or dealer.
6. The Court has jurisdiction over this action and venue lies in this district pursuant to Sections 21(d) and (e), and 27 of the Exchange Act, as amended, [15 U.S.C. Sections 78u(d) and (e), and 78aa].
7. O'Brien and Traders Access Center, directly and indirectly, made use of the means and instrumentalities of transportation and communication in interstate commerce, and of the mails, in connection with the acts, practices, and courses of business alleged herein.
8. Certain of the acts, practices and courses of business alleged herein occurred within this district. The defendants reside in this district.
9. Unless restrained and enjoined by this Court, O'Brien and Traders Access Center will continue to engage in transactions, acts, practices and courses of business as set forth herein, and in transactions, acts, practices and courses of business of similar purport and object. Unless otherwise ordered by this Court, O'Brien will continue to violate the Commission's 1977 Order as to him.
10. Defendant O'Brien, age 61, lives in Marietta, Georgia. During the time of the violations alleged herein, O'Brien managed and controlled the actions of Traders Access Center.
11. Defendant Traders Access Center, a Georgia corporation, was formed by O'Brien in 1997.
FIRST CAUSE OF ACTION
Violations of Section 15(a) of the Exchange Act by O'Brien and Traders Access Center in Connection with the Operation of Traders Access Center
12. Paragraphs 1 through 11 are realleged and incorporated herein by reference.
13. Defendant O'Brien founded Traders Access Center in 1997. The Company has never been registered with the Commission as a broker or dealer.
14. From December 1998 through August 1999, Traders Access Center provided materials and instruction for a training course in techniques for the day trading of securities. In addition, the Company purchased securities market pricing and trading data from vendors and then resold this information to subscribers, most of whom had taken its training course.
15. During this same time, Defendant O'Brien's daughter, Kelli O'Brien ("K. O'Brien"), was a registered representative with a California-based firm registered with the Commission as a broker-dealer (the "California broker-dealer"). K. O'Brien was the sole representative in the California broker-dealer's Atlanta office, which was located inside the offices of Traders Access Center. K. O'Brien also received a salary from Traders Access Center.
16. Traders Access Center maintained a website that it used not only to solicit customers for its training course but also to solicit customers for the California broker-dealer.
17. The Traders Access Center website contained a notation that securities were being offered through the California broker-dealer. Furthermore, the website invited visitors to contact Traders Access Center to obtain the necessary documents to open a securities account at the California broker-dealer or, in the alternative, allowed them to print these documents from the website. The documents in this package included a new account application, a customer agreement, a margin agreement, and a retail day-trading agreement. The website then specified that the completed package was to be mailed to Traders Access Center. Traders Access Center personnel, including but not limited to K. O'Brien, reviewed these submitted documents before forwarding them to the headquarters of the California broker-dealer.
18. When Traders Access Center customers opened accounts at the California broker-dealer through Traders Access Center, K. O'Brien was listed as the registered representative on the accounts.
19. K. O'Brien received the registered representative's portion of the commissions the customers paid to the California broker-dealer.
20. K. O'Brien did not give investment advice to the customers.
21. K. O'Brien did provide customers with information concerning margin trading, she contacted customers when they were subject to margin calls, and she occasionally placed trades for customers.
22. From December 1998 through August 1999, K. O'Brien, while associated with the California broker-dealer, transferred the entire amount of commissions she earned from the securities trades of her customers, approximately $1.3 million, to Traders Access Center. These monies represented the main source of income for Traders Access Center during this time.
23. The organization of Traders Access Center's business provided incentives for persons who had taken Traders Access Center's training course and who had become customers of the California broker-dealer, virtually all of whom had K. O'Brien as their registered representative, to trade securities frequently. This directly benefited Traders Access Center because K. O'Brien gave Traders Access Center the commissions she earned from such trades. For example, Traders Access Center purchased market pricing and trading data and resold it to subscribers. The Company charged substantially lower fees for this information to subscribers who traded securities more often. Any increased trading activity resulted in higher commissions for O'Brien's daughter and, ultimately, for Traders Access Center.
24. Defendant O'Brien controlled, directed and was responsible for the organization and actions of Traders Access Center and its employees.
25. Defendant O'Brien engaged in this activity during a period of time when he was barred from association with a broker or dealer by a 1977 Commission Order.
26. By virtue of the foregoing, Traders Access Center operated as a securities broker while failing to register as such with the Commission in violation of Section 15(a) of the Exchange Act [15 U.S.C. Section 78o(a)]. Defendant O'Brien, controlled Traders Access Center during the period of the violations and induced and caused Traders Access Center to commit the acts in violation of Section 15(a) of the Exchange Act [15 U.S.C. Section 78o(a)], and is liable for such violations pursuant to Section 20 of the Exchange Act [15 U.S.C. 78t].
SECOND CAUSE OF ACTION
Violation by Defendant O'Brien of a Commission Order Barring Him from Association with any Broker or Dealer
27. Paragraphs 1 through 26 are realleged and incorporated herein by reference.
28. In 1977, the Commission issued an Order barring Defendant O'Brien from association with any broker or dealer. The Commission's Order is contained in In the Matter of Sylvia Austin Schwinger and James V. O'Brien, Securities Exchange Act Rel. No. 13228, 11 SEC Docket 1629, 1977 SEC LEXIS 2529(February 1, 1977).
29. By virtue of the foregoing, Defendant O'Brien violated the Commission's 1977 Order by associating with Defendant Traders Access Center while the Company acted as a securities broker while failing to register as such with the Commission in violation of Section 15(a) of the Exchange Act [15 U.S.C. Section 78o(a)].
PRAYER FOR RELIEF
WHEREFORE, the Securities and Exchange Commission respectfully requests that this Court:
Make Findings of Fact and Conclusions of Law that Defendants O'Brien and Traders Access Center committed the violations alleged in this Complaint and failed to comply with the 1977 Commission Order;
Grant a Final Judgment of Permanent Injunction restraining and enjoining Defendants O'Brien and Traders Access Center, and their agents, servants, employees and attorneys, and those persons in active concert or participation with them, and each of them, who receive actual notice of the order by personal service or otherwise, from violating Section 15(a) of the Exchange Act [15 U.S.C. Section 78o(a)];
Order Defendants O'Brien and Traders Access Center, pursuant to Section 21(d)(3) of the Exchange Act [15 U.S.C. § 78u(d)(3)], each to pay a civil penalty;
Order Defendants O'Brien and Traders Access Center, jointly and severally, to disgorge the $1.3 million in commissions they improperly received, through K. O'Brien, while Traders Access Center functioned as an unregistered broker, with prejudgment interest;
Order Defendant O'Brien, pursuant to Section 21(e) of the Exchange Act [15 U.S.C. § 78u(e)], to comply with the Order of the Commission which bars him from association with any broker or dealer; and
Grant such other relief as this Court may deem just and appropriate.
Dated: , 2002
CERTIFICATE OF SERVICE
This is to certify that the foregoing document and its attachments have been served upon the following by depositing a copy of same in the United States mail, first-class, postage prepaid, addressed as follows:
This ________ day of _______________, 2002.