UNITED STATES SECURITIES AND EXCHANGE COMMISSION
LIGIATION RELEASE NO. 16749 / October 3, 2000
CONSENT JUDGMENT ENTERED AGAINST BRIAN W. O'CONNOR FOR MISAPPROPRIATING FUNDS FROM INVESTMENT ADVISORY CLIENTS
SECURITIES AND EXCHANGE COMMISSION V. BRIAN W. O'CONNOR, 00-CIV-3971 (DB) (S.D.N.Y.)
The Securities and Exchange Commission announced that, on September 20, 2000, the United States District Court for the Southern District of New York entered a Final Judgment By Consent Against Defendant Brian W. O'Connor, the former principal of Brian W. O'Connor & Co., Inc. ("BWOC"), an investment adviser formerly registered with the Commission. The order permanently restrains and enjoins O'Connor from violating certain antifraud and books and records provisions of the securities laws.
The order arises from a Complaint filed August 11, 2000. The Complaint alleged as follows. From January 1997 through June 1998, O'Connor misappropriated at least $633,000 from the accounts of two investment advisory clients. O'Connor covered up the misappropriations with false account documents. He used the funds to pay BWOC and personal expenses, and used the second client's funds to repay the first client. O'Connor also made several misrepresentations in BWOC's Form ADV filed with the Commission, and caused some of BWOC's books and records to be false and misleading. O'Connor, who neither admitted nor denied the allegations in the Complaint, was enjoined from violating Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5, and Section 207 of the Investment Advisers Act of 1940, and from violating or aiding and abetting violations of Sections 204, 206(1), 206(2), and 206(4) of the Advisers Act and Rules 204-2(a)(12) and 206(4)-2. The Court waived the payment of disgorgement and prejudgment interest thereon, and did not impose a civil penalty, based on O'Connor's demonstrated inability to pay.
O'Connor pled guilty to and was convicted in September 1999 of one count of bank fraud and two counts of mail fraud in connection with his misconduct concerning one of the two clients. United States v. Brian W. O'Connor, 98-CR-856 (E.D.N.Y. Sept. 15, 1999). Based on O'Connor's criminal conviction, and pursuant to an offer of settlement submitted by O'Connor, the Commission on August 10, 2000 entered an order barring O'Connor from association with any investment adviser. (Rel. IA-1893, August 10, 2000).