SECURITIES AND EXCHANGE COMMISSION
In the Matter of
CLARENCE Z. WURTS
OPINION OF THE COMMISSION
Failure to Supervise
President and sole owner of registered broker-dealer failed reasonably to supervise registered representative who was known to have had extensive disciplinary problems in past; after having been hired by president, representative defrauded investors who had bought limited partnership units in series of entities that operated as Ponzi scheme. Held , it is in public interest to impose censure, and to suspend from acting in a supervisory capacity with any broker or dealer for six months.
Justin P. Klein , Thomas B. Roberts , and Mark I. Salvacion , for Clarence Z. Wurts.
David S. Horowitz and Merri Jo Gilette , for the Division of Enforcement.
Appeal filed: April 8, 1998
Last brief filed: August 28, 1998
Oral argument: December 8, 1999
The Division of Enforcement appeals from the decision of an administrative law judge imposing sanctions on Philadelphia Investors, Ltd., a registered broker-dealer ("PIL"), and Clarence Z. Wurts, president and sole owner of PIL. The law judge found that, from September 1992 through April 1995, PIL and Wurts
failed reasonably to supervise Michael G. Cohen, a registered representative, with a view to preventing violations of the federal securities laws. The parties stipulated, and the law judge found, that Cohen defrauded investors who bought limited partnership units in a series of entities he had formed for the purpose of trading,among other things, nationally-listed stock options.1 The law judge censured PIL and Wurts, assessed civil penalties of $15,000 against PIL and $5,000 against Wurts, and required PIL to hire an outside consultant to audit and review its supervisory procedures.
Neither Wurts nor PIL filed a petition for review. Both have already paid the civil penalties imposed, and PIL has hired an outside consultant as ordered by the law judge. The Division's petition for review asks us only to review the sanctions imposed on Wurts, which it contends are inadequate. The Division argues that the public interest requires that Wurts be suspended from association with any broker or dealer in a supervisory or proprietary capacity for nine months.2 Wurts does not dispute the facts. We base our findings on an independent review of the record, except with respect to those findings not challenged on appeal.
Wurts's career in the securities industry. Wurts has worked in the securities industry for thirty years. He has no previous disciplinary history. Wurts began his career in 1965 at Drexel & Company, working for that firm and a successor until 1969. He then became associated with Alex. Brown & Sons, first as a floor partner and then, for ten years, as the branch manager of the Philadelphia office. As branch manager, Wurts had supervisory responsibility for the six to fifteen registered representatives at the Philadelphia office. From 1983 to 1986, Wurts served as the president of Edward C. Rorer & Company, a registered investment adviser and broker-dealer, where he helped develop supervisory and compliance procedures. After leaving Edward C. Rorer, Wurts worked briefly at two other firms before forming PIL in 1988. Wurts is licensed as a general securities principal, financial principal, general securitiesrepresentative, and state securities agent. He was previously registered as an options principal.
Wurts has been actively involved in industry self-regulation. In the late 1960s, Wurts was a member of the New York Stock Exchange, Inc. ("NYSE") committee responsible for overseeing trading activity on the floor of the exchange and determining whether any such activity was irregular or improper. In the 1980s, Wurts was a governor of the Philadelphia Stock Exchange, Inc. ("PHLX"); among other responsibilities, he served on the PHLX's Business Conduct Committee for three years, including one year as head of the committee. Wurts was subsequently a member of the National Association of Securities Dealers, Inc. ("NASD") District Committee for District 11, serving as vice-chair of the committee from 1990 to 1991. Both the Business Conduct Committee and the District Committee play important roles in monitoring the activities of firms and individuals involved in the securities industry and in ensuring compliance with securities laws and regulations.
Wurts establishes PIL. In March 1989, PIL became registered with the Commission as a broker-dealer, involved primarily in trading for retail accounts. PIL clears its transactions through the Pershing Division of Donaldson, Lufkin & Jenrette Securities Corporation ("Pershing"). Wurts has been the president and sole owner of PIL since its inception. He has always had sole compliance responsibility for PIL and retained ultimate supervisory authority.
Wurts was primarily responsible for writing the supervisory procedures manuals for PIL. He required registered representatives to acknowledge in writing that they had read each revision of these manuals. Wurts led weekly meetings for PIL's registered representatives at which compliance issues were discussed. PIL also held a major compliance meeting every year.
Since 1992, PIL has maintained two offices, one in Philadelphia and one in Moorestown, New Jersey. At the time of the events in question, PIL had about 3,000 active accounts, about 400 of which were handled by the Philadelphia office. PIL was staffed by approximately twelve registered representatives, six of whom, including Wurts, worked in the Philadelphia office.
Wurts hires Cohen to work at PIL. In spring 1991, the operations manager of PIL introduced Cohen to Wurts. Cohen later asked Wurts about the possibility of working at PIL. Cohen told Wurts that he had created and had been using an options trading program, which he proposed to use at PIL.
Wurts knew that Cohen had previously worked in the securities industry and that he had "quite an extensive list of problems," including disciplinary action by the NYSE in 1984 for unauthorized options trading and repeated failures to repay personal loans.3 Wurts reviewed Cohen's disciplinary history as provided by the NASD's Central Registration Depository ("CRD"), discussed the details of the CRD record with Cohen, and contacted branch managers who had previously supervised Cohen. Wurts ultimately concluded that Cohen had "amended his ways" and that his problems were "in the past." Wurts regarded Cohen as "a very bright, capable man," and he thought that Cohen's options trading program would bring additional revenue to PIL. Wurts believed that there was a "strong possibility" that Cohen would not be relicensed, but he decided that, if Cohen successfully completed the relicensing process, he would hire Cohen to work at PIL. Cohen did become relicensed, and he became a registered representative with PIL in September 1992.4
Because of his concerns about Cohen's previous unauthorized trading, Wurts employed special supervisory procedures with respect to Cohen. Cohen was required to submit his options trades to Wurts for pre-approval. The other registered representatives at PIL obtained management approval for options transactions after execution, from PIL's registered options principal ("ROP"). Wurts also required Cohen to fill out a daily options blotter so that Wurts would be able to check the daily trading reports from Pershing against the blotter.5 Additionally, Wurts informed Pershing of Cohen's disciplinary history and sought Pershing's assistance in monitoring Cohen's activities.
Cohen becomes a principal. When Cohen started working at PIL, he quickly impressed Wurts, as well as his other colleagues, with his diligence, knowledge of the industry, and meticulous attention to detail. On October 1, 1992, less than one month after Cohen started work at PIL, Wurts made him the ROP in the Philadelphia office.6 Wurts made Cohen a principal of PIL in early February 1993.7 Wurts then began to assign Cohen supervisory responsibilities, always subject to Wurts's ultimate supervision. Even after he became a principal, Cohen remained subject to special supervision by Wurts with regard to options trading. However, he began making some trades without Wurts's pre-approval when Wurts was out of the office, informing Wurts of the trades when Wurts returned.
By late December 1993, Cohen was responsible for supervising the registered representatives in PIL's Philadelphia office and for ensuring compliance with securities laws and regulations, firm practices and procedures, and Pershing's practices and procedures. Among other duties, Cohen reviewed and approved new accounts opened by other registered representatives and reviewed outgoing and incoming mail. Cohen also conducted annual compliance inspections. However, Wurts continued to exercise senior responsibility for the operations of the Philadelphia office. Wurts was also responsible for approving the account opening form of any account for which Cohen was the registered representative, so that Cohen was not effectively supervising himself. Moreover, even as Cohen assumed increased responsibilities at PIL, the special supervisory procedures with respect to Cohen's options trading remained in place.
Cohen's involvement with limited partnerships. In the three-and-a-half years before Cohen started work at PIL, he had formed four limited partnerships and one "investment club," Nomad Investment Club ("Nomad").8 Cohen was the general partner for each partnership and the authorized agent for Nomad. He pooled investor money raised in a particular offering, then invested the funds in options, stocks, and other securities at his sole discretion. Cohen was entitled to a monthly fee amounting to twenty percent of the profits, if any, of each partnership or club.
Cohen used much of the money he raised from investors to engage in trading of nationally-listed stock options. He enjoyed some successes and used the profits from his trading to pay himself and to make distributions to investors in the first three partnerships. But his trading ultimately produced massive losses, which Cohen concealed by sending investors fictitious account statements showing that their ownership interests were growing in value. Cohen also used fraudulent historical returns for previously formed entities to attract new investors for each new entity.
Wurts knew before he hired Cohen that Cohen had formed limited partnerships and solicited investments for the stated purpose of trading in options. Cohen told Wurts that the limited partnershipswith which he had been involved were no longer active. Wurts told Cohen that Cohen must cease all outside business activities as a condition of employment. He also told Cohen not to be involved in options trading through limited partnerships at PIL and not to solicit investors for such partnerships. However, Wurts did nothing to confirm Cohen's representation that the partnerships were not active, such as asking for current documentation about the partnerships' trading activities. In fact, Cohen did not terminate his involvement with the partnerships.
Cohen's involvement with limited partnerships continues. Cohen had formed Nomad in October 1991, almost a year before he became a registered representative at PIL. After some initial successes, Nomad began suffering substantial trading losses, and Cohen began diverting funds from Nomad to himself and the limited partnerships he had previously formed.
In October 1992, the month after he became a registered representative at PIL, Cohen opened a brokerage account for Nomad at PIL. The new account form identified Cohen as both the registered representative and as the agent for Nomad.9 The form indicated that partnership papers had been submitted to PIL; it also indicated that investment club papers were required, but had not yet been provided to PIL. Wurts reviewed the new account form and approved the opening of the Nomad account. However, Wurts did not ask to see a copy of the partnership papers or the investment club papers, nor did he ask to see documentation showing that Cohen had discretionary authority to conduct transactions for Nomad. Thus, Wurts did not verify that Cohen would be following Wurts's express instructions not to do options trading for limited partnerships. Nor did Wurts find out whether Nomad was a new venture or a continuation of the outside business activity that Wurts had told Cohen to cease.
Cohen deposited $15,000 into the Nomad account at PIL, but by September 1994, the value of the account had dropped to approximately $50. About $13,500 of the losses were caused by Cohen's unsuccessful options trading in the account; Cohen transferred the other approximately $1500 to his own account. Wurts reviewed most of the monthly account statements for Nomad, but not the statement showing the transfer of approximately $1500 to Cohen's account.10
In late August 1994, Cohen approached Wurts and asked permission to do a limited partnership offering featuring his trading program. Wurts responded that Cohen could not do such a limitedpartnership at PIL, but suggested that Cohen might be able to use a different vehicle to satisfy his objectives.11 After more discussion, Wurts and Cohen agreed that Cohen would form an investment club that would be endorsed by PIL and would use Cohen's options trading program. With Wurts's approval, two registered representatives at PIL would help Cohen solicit participations in the club, seeking a total of $75,000 in increments of $5,000.
Despite this agreement, Cohen formed Daedalus Investments, Limited Partnership ("Daedalus"), in September 1994, and opened a bank account in the partnership's name at First Executive Bank ("First Executive"). In October 1994, Cohen submitted a new account form for Daedalus, with himself listed as both customer and registered representative, for Wurts's approval. The new account form gave the full name of Daedalus and indicated that the account was being opened for a corporation or partnership. Two other documents, a Pershing margin agreement and a co-partnership form, identified Cohen as the general partner of Daedalus. An options agreement that accompanied the new account form indicated that Daedalus had a net worth of $75,000, the same amount that was to be raised for Cohen's investment club.12 Despite these indications that the investment club (which Wurts had authorized) had become a limited partnership (which Wurts had forbidden), Wurts approved the account without asking Cohen whether Daedalus was operating as a limited partnership. Once the Daedalus account was opened, Pershing began issuing monthly statements for the account. These statements were mailed to Daedalus, care of Cohen, at the PIL address, and Wurts reviewed them on a monthly basis.
Cohen approached Maurice Sirkin and Evan Finkelstein, registered representatives at PIL, and told them he was forming a vehicle that would trade primarily in options. He gave them a package of documents pertaining to Daedalus, including a chart that purported to show the past performance of other partnerships managed by Cohen, and suggested that they recommend Daedalus to their customers. Ultimately, Sirkin and Finkelstein each sold two interests in Daedalus, at $5,000 per unit, to PIL customers.
Between October 1994 and March 1995, Cohen deposited $70,000 raised from investors into a Daedalus account at First Executive. Cohen took funds from the First Executive account and deposited them into the Daedalus account at PIL, then wired $13,753 from the Daedalus account at PIL back into the First Executive account.
By March 31, 1995, the Daedalus account balances at First Executive and PIL together totalled $10,172. Of the original $75,000 contributed by customers, Cohen (1) used more than $45,000 toliquidate three investors' interests in Nomad and two partnerships; (2) transferred $600 to another partnership; (3) paid himself approximately $15,000; and (4) lost $3,369 trading in the Daedalus account at PIL.
By April 1995, Cohen's trading losses and payment obligations to investors exceeded his ability to raise new capital. On April 21, 1995, Wurts learned that Cohen had abruptly gone away, leaving a letter suggesting that he "had been a failure." Wurts immediately contacted the NASD.
Disciplinary Action. After a hearing, the law judge found that PIL's supervisory procedures "were inadequate because they were ineffective in preventing and detecting Mr. Cohen's violations," that Wurts's supervision was unreasonable in various respects related to Cohen, and that Wurts had "exhibited serious lapses of judgment and reason" in his supervision over Cohen. He also found, however, that "[o]ther than the incident now at issue, . . . Wurts and [PIL] were exemplary supervisors," that Wurts's supervision over Cohen displayed an "uncharacteristic lack of care," and that "Mr. Wurts's worst fault in this case . . . was his misplaced trust in Mr. Cohen." The law judge found that imposing a six-month suspension and a supervisory bar on Wurts, as requested by the Division of Enforcement, would probably result in the closing of PIL, and that Wurts was not enough of a threat to the public interest to require the imposition of a suspension or bar. He did, however, impose civil penalties on Wurts and PIL, as well as censure them.
Sections 15(b)(4)(E) and 15(b)(6)(A) of the Securities Exchange Act of 193413 authorize us to censure, suspend, place limitations on the activities of, or bar from association with a broker-dealer any person associated with a broker-dealer if we find that the person "has failed reasonably to supervise, with a view to preventing [securities] violations . . . , another person who commits such a violation, if such other person is subject to his supervision," and that "such censure, placing of limitations, suspension, or bar is in the public interest." In this case, there is no dispute as to the violations committed.
Supervision of an associated person must be "reasonable . . . under the attendant circumstances."14 Supervisors who know of an employee's past disciplinary history must ensure not only that rules and procedures are in place to supervisethe employee properly, but also that those rules and procedures are enforced.15
Wurts does not dispute the law judge's finding that his supervision of Cohen failed to meet this standard. Thus, we need only determine what sanction should be imposed. In imposing sanctions against a respondent, we consider the egregiousness of the respondent's actions, the isolated or recurrent nature of the infraction, the degree of scienter involved, the sincerity of any assurances against future violations, the respondent's recognition of the wrongful nature of the conduct, and the likelihood that the respondent's occupation will present opportunities for future violations.16
Wurts's supervisory failure was serious. It was not an isolated incident, but rather a series of failings over a period of months. Wurts undertook to employ Cohen although he knew that Cohen had a disciplinary history. When he hired Cohen, although he made a superficial inquiry, he failed to inquire in detail about Cohen's involvement with the limited partnerships shown on his CRD report and did not demand proof that those partnerships were no longer active.
Wurts initially imposed special requirements on Cohen: he was to submit options trades for pre-approval and to maintain a daily options blotter. Wurts did not properly enforce these requirements, however, because Cohen later executed options trades without pre-approval if Wurts was out of the office. Moreover, Wurts allowed Cohen to assume supervisory responsibilities shortly after he arrived at PIL, making him an ROP within a month after he started work and a principal of PIL about four months thereafter. As time went on, Wurts gave Cohen more and more responsibility and provided less and less review of his work.
When Cohen opened accounts for Nomad and Daedalus at PIL, Wurts made only a cursory review of the new account forms. Wurts did not question whether Daedalus was in fact a limited partnership, even though (1) Cohen had told him he wanted to set up a limited partnership, and (2) the face of the new account papers indicated that Daedalus was a limited partnership. If Wurts had reviewed the Daedalus papers, he would have learned that Daedalus was a limited partnership and would have learned of the extent of Cohen's powers as general partner. Moreover, although Wurts's initials on the Nomadand Daedalus monthly account statements show that he reviewed most of those statements, he failed to inquire about the heavy trading losses in Nomad, and he did not notice the transfer of funds from the Nomad account to Cohen's own account.
Wurts argued below that his supervision of Cohen was reasonable under the circumstances17 because it was designed to prevent unauthorized trading violations, which were the only violations that Cohen had previously committed. We decline to take such a narrow view of the response expected of one who undertakes to supervise someone with a disciplinary history such as Cohen's. In conducting unauthorized trades, Cohen inappropriately took advantage of his power over customer accounts. Unauthorized trading is a violation of the agreement between a representative and a customer as to how trading in the account will be conducted; failure to repay loans is similarly a violation of an agreement. Although Cohen's purported discretionary authority over trading in Nomad and Daedalus made unauthorized trading technically not possible, the discretionary authority itself presented similar opportunities to take advantage of or violate the agreement with the customer. Reasonable supervision of Cohen, under the circumstances, had to take into account Cohen's prior unauthorized trading and failure to repay loans. Thus, reasonable supervision of Cohen's involvement with Nomad and Daedalus required, at a minimum, reviewing documents showing the scope of Cohen's authority over those accounts, reviewing investor information to determine whether the scope of the authority was appropriate, and scrupulous review of trading activity to ensure compliance with the authority granted. Moreover, the supervisory procedures manuals that Wurts wrote for PIL were deficient. There were no written procedures requiring disclosure of outside business activities, nor were there written procedures regarding the handling of discretionary accounts. Nor was there a procedure providing for Wurts or someone else to review Cohen's outgoing correspondence.
Our assessment of the egregiousness of Wurts's conduct is tempered by several factors. The only allegations of deficient supervision pertained to Wurts's supervision of Cohen, who worked his way into a position of trust and responsibility by demonstrating wide-ranging knowledge of the securities industry and meticulous attention to detail. As the law judge found, the lack of care shown in Wurts's supervision of Cohen was uncharacteristic.
We also consider the degree of scienter involved.18 While scienter is not an element of a failure-to-supervise charge, it relates to the reasonableness of supervision. Wurts's lapses of judgment were extraordinary, almost to the point of recklessness. However, the law judge, who had the opportunity to assess Wurts's demeanor at the hearing, found that these lapses were apparently dueto Wurts's "misplaced trust in Cohen," which the law judge characterized as "Mr. Wurts's worst fault in this case."19
Wurts appears to recognize the wrongful nature of his conduct and to accept responsibility for the lapses that occurred at PIL.20 When questioned at the hearing about his failure to notice and respond to various red flags, Wurts readily admitted that he should have noticed them. Moreover, as soon as he learned that Cohen might have been engaged in misconduct, Wurts contacted the NASD. Wurts and PIL have already paid the civil penalties imposed by the law judge, and PIL has hired an outside consultant. Wurts has also made changes in the PIL supervisory procedures with a view to preventing further securities violations.
The likelihood that Wurts will commit future securities violations appears to be low.21 Wurts has been working in the securities industry for more than thirty years, with no prior disciplinary history. He has played an active role in securities industry self-regulation over more than twenty years. His acceptance of his responsibility for the supervisory lapses at PIL, his willingness to make defrauded investors whole,22 and his attention to improving procedures at PIL all demonstrate a commitment to high standards of integrity.
Considering all these factors, we agree with the Division that supervisory lapses as serious as Wurts's call for a sanction moresevere than a censure.23 However, because Wurts is so closely involved with PIL, suspending Wurts or barring him from a supervisory or proprietary role for a lengthy period could cause the closing of PIL, with serious consequences for its employees and customers. We note that Wurts consented to, and has already served, a thirty-day supervisory suspension imposed by the Pennsylvania Securities Commission. This suggests that PIL can continue to operate for a limited period without Wurts's personal supervision and without harm to customers.
We find that it is in the public interest to impose a censure on Wurts, and to suspend Wurts from acting in a supervisory capacity with any broker or dealer for six months.24
An appropriate order will issue.25
By the Commission (Chairman LEVITT and Commissioners HUNT and CAREY); Commissioner UNGER dissenting as to the sanction.
Jonathan G. Katz
UNITED STATES OF AMERICA
SECURITIES AND EXCHANGE COMMISSION
SECURITIES EXCHANGE ACT OF 1934
Rel. No. 43842 / January 16, 2001
Admin. Proc. File No. 3-9114
In the Matter of
CLARENCE Z. WURTS
ORDER IMPOSING REMEDIAL SANCTIONS
On the basis of the Commission's opinion issued this day it is
ORDERED that Clarence Z. Wurts be, and hereby is, censured; and
IT IS FURTHER ORDERED that Wurts be, and hereby is, suspended from association in a supervisory capacity with any broker or dealer for a period of six months, effective on the second Monday following the issuance of this Order.
By the Commission.
Jonathan G. Katz
|1||Cohen subsequently pled guilty to one count of mail fraud, was sentenced to a 21-month prison term, and was ordered to pay restitution of approximately $471,000. United States v. Cohen , Crim. No. 95-421 (E.D. Pa. Jan. 18, 1996). In September 1996, we barred Cohen by consent from association with any broker, dealer, municipal securities dealer, investment advisor or investment company. Michael G. Cohen , Exchange Act Rel. No. 37742 (Sept. 27, 1996), 62 SEC Docket 2846.|
|2||The Division recommended that the law judge impose a six-month suspension from association and a bar from association in a supervisory or proprietary capacity. In its brief on appeal, the Division asked us to suspend Wurts from association with any broker or dealer and to bar Wurts from acting in a supervisory or proprietary capacity with any broker or dealer, without specifying a length for the suspension and bar. At oral argument, however, the Division asked for a supervisory and proprietary suspension for nine months.|
|3||Judgment was entered against Cohen in four civil actions, all in 1979, for failure to repay personal loans totalling $57,900. The record indicates that not all of the judgments had been satisfied at the time Wurts was considering hiring Cohen.|
|4||Cohen passed the NASD's Series 7 general securities representative examination on September 1, 1992, and the Series 63 uniform securities agent state law examination on September 5, 1992.|
|5||Wurts also reviewed the monthly activity statements from Pershing.|
|6||Cohen passed the NASD's Series 4 registered options principal qualification examination on September 24, 1992.|
|7||Cohen passed the Series 24 general securities principal examination on February 2, 1993.|
|8||Although Nomad was called an investment club, Cohen referred to the five entities collectively as limited partnerships, as does Wurts's brief on appeal.|
|9||Because Cohen was listed as the agent, Pershing mailed account statements only to Cohen, not to investors in Nomad. Moreover, Cohen had access to all the funds in the account.|
|10||Wurts reviewed 23 statements between November 1992 and May 1995, as shown by his initials on the statements. The statement showing the transfer to Cohen's account was initialled only by Cohen.|
|11||Wurts told Cohen that limited partnership offerings were too complicated and that PIL did not have the experience to do one.|
|12||Wurts knew that Cohen had not yet raised the entire $75,000, but he nonetheless approved the options agreement.|
|13||15 U.S.C. §§ 78o(b)(4)(E) and 78o(b)(6)(A).|
|14||Arthur James Huff , 50 S.E.C. 524, 528-29 (1991); see also Louis R. Trujillo , 49 S.E.C. 1106, 1110 (1989) (supervision must be reasonable "under all the circumstances").|
|15||James Harvey Thornton , Exchange Act Rel. No. 41007 (Feb. 1, 1999), 69 SEC Docket 49, 54-55, aff'd , 199 F.3d 440 (5th Cir. 1999).|
|16||Joseph J. Barbato , Exchange Act Rel. No. 41304 (Feb. 10, 1999), 69 SEC Docket 178, 200 n.31; Donald T. Sheldon , 51 S.E.C. 59, 86, aff'd , 45 F.3d 1515 (11th Cir. 1995); cf . Steadman v. SEC , 603 F.2d 1126, 1140 (5th Cir. 1979), aff'd on other grounds , 450 U.S. 91 (1981).|
|17||See supra note 14 and accompanying text.|
|18||Joseph J. Barbato , 69 SEC Docket at 200 n.31; Donald T. Sheldon , 51 S.E.C. at 86.|
|19||The law judge also found that Wurts "did not knowingly allow Mr. Cohen to operate his illegal scheme" and that "[t]here is no indication that Mr. Wurts acted intentionally to further Mr. Cohen's scheme." If Wurts had intentionally furthered Cohen's scheme, he could have been charged with aiding and abetting Cohen's fraud. Thus the law judge's finding does not address the failure-to-supervise charge.|
|20||Wurts defended his conduct before the law judge, arguing that his supervision of Cohen was reasonable under the circumstances. He now no longer contends that his supervision was reasonable, arguing instead only that the lapses were not sufficiently egregious to require the increased sanctions sought by the Division.|
|21||At oral argument, counsel for the Division conceded that the risk that Wurts would engage in future violations is "slim."|
|22||Wurts states, and the Division does not dispute, that "PIL has already reimbursed defrauded investors in the amount of $25,000 and has been ordered by the Pennsylvania State Securities Commission to pay an additional $10,000 plus interest to other investors, thereby reimbursing all PIL client losses and losses of certain non-clients."|
|23||We are also mindful of the other sanctions imposed, which have already been fulfilled by Wurts and PIL.|
|24||This six-month suspensionis independent from the thirty-day suspension imposed by Pennsylvania authorities, which, as noted, Wurts has already completed.|
|25||We have considered all of the parties' contentions. We have rejected or sustained them to the extent that they are inconsistent or in accord with the views expressed herein.|