Jeffrey A. Citron
SECURITIES EXCHANGE ACT OF 1934
Release No. 47323 / February 6, 2003
ADMINISTRATIVE PROCEEDING
File No. 3-11031
In the Matter of Jeffrey A. Citron, Respondent. |
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ORDER INSTITUTING ADMINISTRATIVE PROCEEDING PURSUANT TO SECTION 15(b)(6) OF THE SECURITIES EXCHANGE ACT OF 1934, MAKING FINDINGS, AND IMPOSING SANCTIONS |
I.
The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest that a public administrative proceeding be instituted against Jeffrey A. Citron ("Respondent" or "Citron") pursuant to Section 15(b)(6) of the Securities Exchange Act of 1934 ("Exchange Act").
II.
In anticipation of these administrative proceedings, Respondent has submitted an Offer of Settlement ("Offer"), which the Commission has determined to accept. Solely for the purpose of this proceeding and any other proceedings brought by or on behalf of the Commission or to which the Commission is a party, and without admitting or denying the findings contained herein, except as to those findings contained in Section III.B below and as to jurisdiction of the Commission over Respondent and over the subject matter of this proceeding, which Respondent admits, Citron consents to the issuance of this Order Instituting Administrative Proceeding Pursuant to Section 15(b)(6) of the Securities Exchange Act of 1934, Making Findings, and Imposing Sanctions ("Order").
Accordingly, IT IS ORDERED that a proceeding pursuant to Section 15(b)(6) of the Exchange Act against Citron be, and hereby is, instituted.
III.
On the basis of this Order and Respondent's offer, the Commission makes the following findings:
A. From 1988 to March 1998, Citron was associated with Datek Securities Corporation ("Datek Securities," now iCapital Markets LLC), a broker-dealer registered with the Commission pursuant to Section 15(b) of the Exchange Act.
B. Pursuant to a Final Judgment of the U.S. District Court for the Southern District of New York entered on January 23, 2003, in an action styled Securities and Exchange Commission v. Sheldon Maschler, et al., 03 Civ. 0264 (S.D.N.Y.), Citron is permanently enjoined from violating Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder, and from aiding and abetting violations of Sections 15(b) and 17(a)(1) of the Exchange Act and Rules 15b3-1, 15b7-1, 17a-3(a)(1), 17a-3(a)(2), 17a-3(a)(3), 17a-3(a)(7), 17a-3(a)(9), and 17a-3(a)(12) promulgated thereunder.
C. The Commission's Complaint in Securities and Exchange Commission v. Sheldon Maschler, et al. alleged that from 1993 to March 1998, Citron and others, while in control of Datek Securities, violated the above provisions by participating in a widespread fraudulent scheme to execute proprietary trades illegally through the Nasdaq Stock Market's Small Order Execution System, resulting in tens of millions of dollars in illegal profits. The great majority of those profits were paid to Citron and another of the firm's undisclosed principals. The Complaint further alleged that the fraudulent scheme was carefully planned and orchestrated, and was concealed from regulators through the use of sophisticated software, allocation of trades to nominee accounts, creation of fictitious books and records, and filing of false reports with the Commission.
IV.
In view of the foregoing, the Commission deems it appropriate and in the public interest to impose the sanction specified in the Offer of Settlement submitted by Citron.
Accordingly, IT IS ORDERED that Citron be, and hereby is, barred from association with any broker or dealer.
By the Commission.
Jonathan G. Katz
Secretary