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INITIAL DECISION RELEASE NO.89
ADMINISTRATIVE PROCEEDING
FILE NO. 3-8841
UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION
_______________________________
In the Matter of :
: INITIAL DECISION
ROBERT I. MOSES : MAY 28, 1996
:
_______________________________
APPEARANCES: James J. Tyne, Robert Knuts, and Linda Susswein
for the
Division of Enforcement, Securities and Exchange
Commission,
Northeast Regional Office
Robert I. Moses, pro se
BEFORE: Carol Fox Foelak, Administrative Law Judge
1. The Securities and Exchange Commission (Commission)
initiated this proceeding by an Order Initiating Proceedings
(OIP) on September 29, 1995, pursuant to Sections 15(b) and 19(h)
of the Securities Exchange Act of 1934 (Exchange Act). The OIP
alleged that a Final Judgment of Permanent Injunction and Other
Relief on Consent (Final Judgment) had been entered against
Respondent Moses enjoining him from violations of Sections 5 and
17(a) of the Securities Act of 1933 (Securities Act) and of
Section 10(b) of the Exchange Act and Rule 10b-5 thereunder in
SEC v. Microwave Cable T.V. Partners, et al., 94 Civ. 5666 (MGC)
(S.D.N.Y. Feb. 23, 1995) (SEC v. Microwave Cable T.V. Partners).
See Exs. 1 and 2.-[1]- I held a hearing in New York City on
December 13, 1995. The Division of Enforcement (Division) called
two, adverse, witnesses, including the Respondent. The
Respondent testified in his own behalf and called one additional
witness. A number of exhibits were received into evidence.
2. The Division filed its Proposed Findings of Fact and
Conclusions of Law and Post Hearing Memorandum of Law on January
26, 1996. Mr. Moses's "Answer to Proposed Findings" (Post
Hearing Answer) was dated March 15, 1996. The Division filed its
Reply May 1, 1996.
---------FOOTNOTES----------
-[1]- Citations to the transcript of the December 13, 1995,
hearing will be noted as "Tr. __" and to an exhibit as "Ex. __."
All exhibits were offered by the Division.
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3. My findings and conclusions are based on the record and
my observations of the witnesses' demeanor.-[2]- I applied
preponderance of the evidence as the applicable standard of
proof.
---------FOOTNOTES----------
-[2]- I have considered and rejected all the arguments and
proposed findings that are inconsistent with this decision.
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FINDINGS OF FACT AND CONCLUSIONS OF LAW
The Final Judgment
4. The Final Judgment, entered on February 23, 1995,
enjoined Moses: (a) "in the offer or sale of any security," from
violations of the antifraud provisions of Section 17(a) of the
Securities Act; (b) "in connection with the purchase or sale of
any security," from violations of Section 10(b) of the Exchange
Act and Rule 10b-5 promulgated thereunder; and (c) "to sell any
securities" in violation of the registration provisions of
Section 5 of the Securities Act. The court additionally ordered
Moses-[3]- to disgorge $251,398 in ill-gotten gains and
prejudgment interest and to pay a penalty of $206,703. SEC v.
Microwave Cable T.V. Partners. Exhibits 1 and 2 are certified
copies of the complaint-[4]- and the Final Judgment in that
action.
5. Moses engaged in his violations of the Securities Act
and the Exchange Act in connection with the sale of limited
partnership interests in Microwave Cable T.V. Partners I, L.P.
(Microwave I) and Microwave Cable T.V. Partners II, L.P.
(Microwave II). Ex. 1, 13-38. Moses was the president and
---------FOOTNOTES----------
-[3]- The disgorgement was ordered jointly and severally
against Moses and Microtech, wholly owned by Moses.
-[4]- The Commission considers the allegations contained in
a complaint which resulted in the entry of a judgment on consent,
without admitting or denying the allegations of the complaint
(and in which the judgment was unaccompanied by findings of fact)
when determining the appropriate sanction in the public interest
under Section 15(b) of the Exchange Act. See, e.g., Charles
Phillip Elliott, 52 SEC Docket 2011, 2013 n. 5, 2015 n. 12
(1992).
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controlling stockholder of the general partners-[5]- of
Microwave I and II. Ex. 1, pp. 3 and 4.
6. Moses's violations occurred during the periods from
July through December 1990 and from May 1992 through March 1993.
Ex. 1, 13, 28.
7. From February 18, 1992, through September 1, 1994,
Moses was associated with Westfield Financial Corporation
(Westfield), a broker-dealer registered with the Commission.
Exs. 3-5; Ex. 28, p. 19; Tr. 88. Moses's denial in his Post
Hearing Answer,
p. 8, that he was associated with Westfield as a broker-dealer is
inconsistent with his testimony as well as other evidence of
record and is rejected. Tr. 88; Exs. 3-5; Ex. 28, p. 19. Moses
was also associated with other broker-dealers during the period
of time leading up to the commencement of the Microwave I
offering. Exs. 6-9A.
8. Moses has not made any payments toward the satisfaction
of the Final Judgment, which required him to pay $251,536 in
disgorgement and prejudgment interest and $206,000 in penalties.
Ex. 2, V; Tr. 106. Indeed, he views the judgment, to which he
consented, as subject to further negotiation. Tr. 106-7.
Collateral Estoppel
9. Moses claims he would never have consented to the Final
Judgment had he known this proceeding would be brought against
---------FOOTNOTES----------
-[5]- M.T. Microtech, Inc. and G. P. Global Partners, Inc.
were the general partners of Microwave I and Microwave II,
respectively. Ex. 1, pp. 3 and 4.
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him. Tr. 113; Post Hearing Answer, pp. 8, 10. This claim is
rejected in light of the clear evidence of record to the
contrary. Moses executed a consent to the Final Judgment in
which he specifically acknowledged and agreed that his consent
was "for the purpose of resolving this civil proceeding only . .
. and [does] not resolve, affect or preclude any other proceeding
which may be brought against [him]." He specifically waived "any
right that [he] may have to assert that under the Double Jeopardy
Clause of the United States Constitution, the relief consented to
in this civil action bars any criminal action, or any criminal
action bars the relief consented to in this action." Ex. 2,
Consent, para. VI. Tr. 122-30.
10. Moses's attempt to dispute the terms of the Final
Judgment -- including his acknowledgement that it does not
preclude any other proceeding against him, his waiver of Double
Jeopardy and the quantification of his ill-gotten gains -- is
barred. The doctrine of collateral estoppel as well as
Commission case law preclude any attack in this proceeding on the
validity of the Final Judgment. Blinder, Robinson & Co., Inc.,
48 S.E.C. 624, 628-30 (1986), vacated and remanded, 837 F.2d 1099
(D.C. Cir. 1988), cert. denied, 488 U.S. 869 (1988); Kimball
Securities, Inc., 39 S.E.C. 921, 924 n. 4 (1960); J.D. Creger &
Co., 39 S.E.C. 165 (1959); Kaye, Real & Co., Inc., 36 S.E.C. 373,
375 (1955); and James F. Morrissey, 25 S.E.C. 372, 381 (1947).
Microwave I
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11. Moses formed Microwave I, drafted the Microwave I
Private Placement Memorandum (Microwave I PPM), Ex. 11, and
distributed it to prospective investors. Tr. 62-64; Ex. 1, 17.
He raised close to $1 million from the sale of Microwave I
limited partnership interests during the period July to December
1990. Tr. 68; Ex. 10, 1.
12. The Microwave I PPM stated that Microwave I would
"engage in the business of acquiring Wireless Microwave Cable
T.V. Licenses from the Federal Government" in order to "sell the
acquired licenses to existing Microwave Cable T.V. Operators, or
other parties at fair market value." Ex. 11, p. 9. Thus it
would receive "substantial profits . . . without the risks
inherent in starting a new business." Ex. 11, p. 16. The "Use
Of Proceeds" section was consistent with the proposed plan to
acquire licenses from the federal government and resell those
licenses without ever operating a cable television company.
Ex. 11, p. 14.
13. Microwave I never acquired any microwave cable
television licenses from the federal government. Tr. 65-66; Ex.
1, 18-19. Instead Moses used $500,000 of investor funds to
purchase a 13%-[6]- interest in Wireless Cable of Atlanta
---------FOOTNOTES----------
-[6]- Respondent Moses contended that it was a 51%
interest, but that the partnership decided not to make payments
due, so part of its stock was forfeited, leaving it with 13%. He
conceded that the full purchase price was $2.5 million and that
only $500,000 was paid. Tr. 66-69. Although Mr. Moses's
reasoning concerning this is strained, it is unnecessary for the
purpose of this proceeding to decide whether the partnership had
a 51% interest for any period of time.
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(WCA), a cable television company that was just starting its
wireless cable television operation. Ex. 1, 20-22. He
contended this was within the meaning of the representation in
Ex. 11 that Microwave I would acquire licenses from the federal
government. Tr. 65-70.-[7]- He conceded that, other than
the $500,000 investment in WCA, the partnership did not invest in
any other business that gave even an indirect interest in
wireless cable licenses. Tr. 69-70.
14. Moses also used Microwave I investor funds to make
loans totalling $400,000 to companies affiliated with Paul
Alessandrini, a business associate. Ex. 1, 23-27. Tr. 70-74.
He stated that a $150,000 loan was for a few days. A $250,000
transfer of funds, he said, was in the nature of an investment.
Tr. 71-73. The Microwave I PPM failed to disclose that any
investor money would be loaned or otherwise transferred to
Alessandrini's companies. Ex. 11; Tr. 74.
15. The Microwave I PPM contained misrepresentations and
omissions concerning Mr. Moses's educational achievements and
work experience, and his testimony concerning this was evasive
and lacked candor. Contrary to the Microwave I PPM, Moses did
not receive an M.B.A. from City University in New York. Tr. 74-
75; Ex. 11, p. 17. Although conceding that he did not have an
M.B.A., he argues (based on alleged facts not in evidence) that
---------FOOTNOTES----------
-[7]- He also contended that the $500,000 payment was
within the meaning of the representation in the use of proceeds
section, Ex. 11, pp. 13-14, that $500,000 would be spent on
engineering consultation fees. Tr. 68.
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he had actually taken more courses than most M.B.A.s, thus
suggesting that Ex. 11 did not misrepresent his educational
background. Post Hearing Answer, p. 3; Tr. 75. 16. Contrary
to the Microwave I PPM, there is no evidence to show that Moses
had worked for Avon Products and Stouffer Chemical. When shown
Ex. 9, Forms U-4 and U-5 which were signed by him and submitted
by PG Securities Corp., concerning his association with that
firm, and which do not mention these companies, he blamed the
omission on a typist. Tr. 76-77. He reiterates his claim
concerning work for Avon Products and Stouffer Chemicals in his
Post Hearing Answer, pp. 2-3, 10, inappropriately suggesting the
Division had a duty to unearth evidence to prove that he was in
fact employed by those companies.
17. Moses conceded that the Microwave I PPM, Ex. 11, did
not disclose that he had been incarcerated for several years
during the 1960s for his involvement in a crime of theft of
property. Tr. 78-79. He argued that this crime, committed in
his youth, had become irrelevant due to the passage of time and
that he was not required to disclose it. Tr. 100-101; Post
Hearing Answer, p. 3. I am not prepared to conclude that this
element of his background is not material to a prospective
investor. However, I have not considered the nondisclosure in
reaching my decision.
18. In August 1993, Moses sent a letter to all Microwave I
investors, urging them to exchange their limited partnership
interests in Microwave I for shares of common stock issued by
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American Broadcasting System, Inc. (ABS), a broadcast radio
station company. Tr. 79-80; Ex. 17. To induce the Microwave I
limited partners to give up their limited partnership interests,
Moses promised that ABS would engage in a public offering of its
stock, "which you can trade freely on the NASDAQ-[8]-
exchange." Ex. 17.
19. The original Microwave I limited partners exchanged
their limited partnership interests for ABS common stock, and ABS
became the sole limited partner in Microwave I. Moses, through
M.T. Microtech, Inc., remained Microwave I's general partner.
ABS and Moses then sold Microwave I's WCA stock back to WCA for a
total of $800,000, of which Moses received $80,000. ABS never
completed a public offering of its common stock. ABS filed for
bankruptcy protection in May 1995. Tr. 79-82, 90-91; Ex. 10,
8.
Microwave II
20. From May 1992 to March 1993, Moses raised close to $1
million through the sale of limited partnership interests in
Microwave II. Ex. 1, 28; Ex. 10, 2; Tr. 82-85.
21. Moses drafted the Microwave II Private Placement
Memorandum (Microwave II PPM) and "The First Amendment to the
---------FOOTNOTES----------
-[8]- NASDAQ is the acronym for National Association of
Securities Dealers Automated Quotations system. It is a
computerized system that provides brokers and dealers with price
quotations for securities traded over the counter as well as for
many New York Stock Exchange listed securities. NASDAQ quotes
are published in the financial pages of most newspapers.
Barron's Dictionary of Finance and Investment Terms (4th ed.
1995).
==========================================START OF PAGE 9======
Private Placement for Microwave II" (Microwave II Amendment), and
caused these documents to be distributed to prospective
investors. Ex. 1, 32, 37; Exs. 28, 30; Tr. 83-84. The
Microwave II PPM contained the same misrepresentations and
omitted the same facts concerning Moses's background as the
Microwave I PPM. Ex. 28, p. 19.
22. The Microwave II PPM stated: "Mr. Moses has
successfully acquired the entire microwave cable television
system in Atlanta, Georgia through an identical limited
partnership known as [Microwave I]." Ex. 28, p. 19. In fact,
Microwave I never acquired "the entire microwave cable television
system in Atlanta"; instead, it acquired an interest in WCA. Ex.
1, 33.
23. The Microwave II PPM, dated May 1, 1992, stated that
Microwave II would "engage in the business of acquiring wireless
microwave cable TV licenses from the federal government or a
microwave cable tv operating system" in order to "sell the
acquired licenses . . . at fair market value." Ex. 28, p. 10.
The undated Microwave II PPM Amendment stated the proceeds would
be used for a merger with ABS and that there was "an Initial
Public Offering of stock tentatively set for the end of October
1992." It listed several broadcast stations purportedly licensed
to ABS. Ex. 30.
24. Microwave II never intended to acquire microwave cable
television licenses from the federal government. Ex. 1; 34;
Tr. 85-86.
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25. The Microwave II Amendment stated that it was the
intent of ABS to have the shares of its common stock granted to
Microwave II "registered in a Public Stock offering ('S-1
Registration')." Ex. 30. In fact, ABS did not intend to
register the shares issued to Microwave II. Ex. 1, 38. Nor
was any public offering of ABS common stock ever completed. Tr.
90-91.
26. Moses received $206,703 in "ill-gotten gains" from the
Microwave I and II offerings as well as the $80,000 in proceeds
from the sale of WCA stock by Microwave I. Ex. 2, V; Tr. 79-
82, 91-93. When asked whether he had taken the ill-gotten gains,
quantified in the Final Judgment, to which he had consented, he
responded, "I don't think so." Tr. 92. This evasive answer does
not alter the finding that he received the $206,703 in ill-gotten
gains.
27. Moses was the subject of several state actions
concerning violations of state securities regulations in Kansas,
Wisconsin, and Virginia in connection with the Microwave II
offering. Exs. 37, 38, 39, 39A, 39B. Moses's claim, in his Post
Hearing Answer, pp. 5, 7-8, that he was not actually sanctioned
because the violations were committed by others or because he was
a mere consultant is belied by the referenced Exhibits, which
name him as a respondent or defendant in the various state
actions.
Moses has not complied with the Final Judgment.
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28. Moses has never shown any remorse for his misconduct in
connection with the Microwave I and II fraudulent offerings and
continues to deny that he engaged in any misconduct. See e.g.,
Tr. 112-14. He continues to portray himself as working
tirelessly for the interests of investors in his Post Hearing
Answer.
29. Moses never paid the court-ordered penalties or
disgorgement. In anticipation of legal action, he had stripped
himself of assets by transferring all of his ownership interests
in several businesses to an associate, Don Meyers, in exchange
for "a single dollar or a cup of coffee." Tr. 25. Meyers
acquired these companies from Moses expressly due to the legal
problems that Moses was experiencing with the Commission as a
result of the fraudulent Microwave I and II offerings. Tr. 19-
23; Ex. 47-14. Moses and Meyers did not conduct any negotiations
and did not execute any documents concerning these transfers.
Tr. 19.
30. Moses works as a "senior consultant" to Meyers. Tr.
10, 14. For example, the prospectus for the Windgate Fund,
currently soliciting investors, includes "Robert Moses, senior
consultant" on "the management team" and states that the loss of
his services "would likely have a material and adverse effect" on
the company. Ex. 47-5, p. 11. Yet Moses supposedly receives no
"salary" from Meyers that could be garnished to satisfy the Final
Judgment. Tr. 55-57. Instead, Moses supposedly receives "loans"
from Meyers's companies against some future possible
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compensation. Id. Moses maintains unlimited check writing
authority for all of Meyers's companies where Moses serves as
"senior consultant." Tr. 27-28. Moses and Meyers characterize
the payments made to Moses as "loans" to attempt to prevent the
Commission from collecting any portion of the Final Judgment by
garnishing Moses's wages.
31. Moses received more than $125,000 from Meyers's
companies during the first six months of 1995, none of which he
used to make any payments against the judgment. Tr. 106. Moses
claims these monies were used to run his business. Tr. 106; Post
Hearing Answer, p. 7. However, the record evidence includes
numerous checks payable to Moses or cash or for such personal
expenses as rent, utilities and car repairs. Exs. 47-2, 47-6.
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Moses continues to solicit investors after the Final Judgment.
32. Moses currently serves as president of CM Capital
Management Associates, Inc. (CM Capital), one of the companies
that he transferred to Meyers. Tr. 26. In his Post Hearing
Answer, p. 7, Moses denies any current connection to CM
Capital.-[9]- However, his February 26, 1996, request for
extension of time to file his post-hearing brief was on CM
Capital letterhead.
33. CM Capital actively solicits investors for The Windgate
Fund, LLC (Windgate). Tr. 36-40. Windgate is involved in
raising up to $20 million from the investing public to: (a)
develop certain licenses granted by the Federal Communications
Commission (FCC) to provide Interactive Video and Data Services
(IVDS); and (b) invest in "interactive television" and "virtual
reality" companies. Ex. 47-5; Tr. 57.
34. Meyers and Moses drafted an information brochure for CM
Capital that they distributed to prospective investors (CM
Capital brochure). Ex. 47-12; Tr. 47-48, 59-60. Ex. 10, 10.
This document states: "In the past four years alone, the firm and
its affiliates have successfully completed the following private
financings: Microwave Cable Television I, L.P; Microwave Cable
Television II, L.P. . . . American Broadcasting System, bridge .
---------FOOTNOTES----------
-[9]- He says, "CM Capital does not exist for me anymore .
. . . [I]t never solicited money for Mr. Meyers' Windgate Fund.
Any employees soliciting general partners to join Windgate worked
for Windgate. I originally used the company for consulting
purposes. . . . I now work as a consultant under my own name for
Windgate and other companies."
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. . ." Ex. 47-12, p. 2. The CM Capital brochure fails to
disclose the existence of the Final Judgment or any other
information concerning SEC v. Microwave Cable T.V. Partners. Nor
does the CM Capital brochure disclose that ABS filed for
bankruptcy protection in May 1995.
35. Moses claims in his Post Hearing Answer, p. 7, that the
CM Capital brochure was drafted by "an employee of Mr. Meyers[,]
. . . that it fails to disclose the information referred to . . .
because it was written prior to that time" and that it has not
been used since. This argument is based on Meyers's testimony
that "Jim Freo" drafted it. Tr. 57. However, Mr. Meyers
conceded that he had testified in his November 21, 1995,
deposition that he and Mr. Moses drafted it. Tr. 60.
Additionally, when pressed for identification of the new author
at the December 13 hearing, Meyers stated he did not know how to
spell his name. Tr. 59. The claim that Moses was not
responsible for the misleading contents and distribution of this
document is rejected.
36. Moses currently serves as the "senior consultant" to
Windgate. Tr. 10. In his Post Hearing Answer, pp. 7, 9, 10, he
argues that his current activities for the Windgate Fund are not
relevant to this proceeding because it is a general partnership
and because he is "only a consultant." As I ruled at the
hearing, however, testimony and evidence concerning Moses's
activities involving Windgate are relevant to the public interest
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issue, whether or not Windgate involves the sale of a "security."
Tr. 15, 99-100.
37. As part of his duties for Windgate, Moses is "in charge
of company selection and evaluation" concerning investments by
Windgate in other private companies. Ex. 47-5, p. 10. Meyers
and Moses together drafted a prospectus for Windgate (Windgate
prospectus) that is currently being used to solicit prospective
investors. Ex. 10, 13; Tr. 13, 46; Ex. 47-5.
38. The Windgate prospectus states that Windgate has
acquired the interactive television licenses issued by the FCC
for the following markets: Burlington, North Carolina; Lincoln,
Nebraska; Muncie, Indiana; and Youngstown-Warren, Ohio. Ex. 47-
5, p. 1. The Windgate prospectus identified existing "on-line"
services as Windgate's "initial competition" and cautioned that
"breakthroughs in new technologies" could result in additional
sources of competition. Ex. 47-5, p. 11. The Windgate
prospectus contains a projection for the resale value of the IVDS
licenses based on "depth of penetration" for providing IVDS
services to households in Windgate's four market areas. Ex. 47-
5, p. 7.
39. The Windgate prospectus fails to disclose that there is
a competing IVDS license holder in every market area for which
Windgate was awarded an IVDS license. Tr. 97-99.
40. The Windgate prospectus contains a lengthy description
concerning the logistics of supplying IVDS services, the
applications of IVDS service, and how Windgate will construct its
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IVDS operating systems. Ex. 47-5, pp. 2-5; Tr. 103-05. The
Windgate prospectus does not disclose that, according to Moses,
the IVDS equipment necessary to actually deliver IVDS to the home
is not yet available. Tr. 102-104. Moses stated that Ex. 47-5
is an old version of the prospectus, not in current use, noting
that it mentions the EON company as providing equipment. Tr. 97,
105. However, he testified that Ex. 47-5 might have been sent to
earlier clients and that it is close to the version currently in
use. Tr. 97.
41. Windgate solicited investors through a nationwide
distribution of postcards to, among others, subscribers to INC.
magazine. Tr. 50-51. Moses participated in the decision to
solicit investors through postcard mass mailings. Tr. 46.
42. In August 1995, Moses was sanctioned by the State of
Wisconsin for illicit solicitation activities on behalf of
Windgate in Wisconsin. Ex. 40. Moses's claim, in his Post
Hearing Answer, pp. 7-8, that he was not, is belied by Ex. 40.
Credibility
43. Neither Mr. Meyers nor Respondent Moses was a
particularly credible witness.
As noted above, Moses gave evasive answers on several topics.
44. Mr. Meyers's testimony was characterized by non
responsive, evasive or inconsistent answers. His inconsistent
testimony concerning Ex. 47-12, the CM Capital brochure, is
discussed above. Another example is his testimony concerning the
ongoing activities of the Windgate Fund. He had been deposed in
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November 1995, about three weeks before the hearing. Tr. 12, 60.
When deposed, he testified that both he and Mr. Moses "speak to
investors . . . describe the funds . . . and . . . solicit
investors," and that Mr. Moses was paid "commissions" for raising
capital. Tr. 39-40. At the hearing he testified Mr. Moses "has
never been paid a commission for raising capital because he
hasn't raised any." Tr. 39-40. Mr. Meyers described
"commissions" as "an incorrect choice of words." The correct
term for the payments Mr. Moses was receiving from the Windgate
Fund is "consulting fees," he testified. Tr. 40-41. He also
described the payments (e.g., as shown on Ex. 47-6) as "draws . .
. lent to" Moses, that are on the books as "receivables," or,
alternatively, as "token payments" on a "substantial consulting
fee" that Mr. Moses will earn on a "$20 million project." Tr.
55-57.
45. At his deposition Meyers described Windgate as having
two general partners, himself and Laura Lem, Respondent Moses's
wife, and "limited partners . . . maybe 75." Tr. 16. At the
hearing he described Windgate as a general partnership, Tr. 54,
himself and Ms. Lem as "managing partners" and the others as
"partners . . . actively involved in all pertinent decisions,"
Tr. 15-16, who, incredibly, "are contacted with great frequency
to make important decisions." Tr. 54. His prior testimony that
the others are limited partners was a "poor choice of words," he
testified. Tr. 16.
PUBLIC INTEREST
==========================================START OF PAGE 18======
46. Imposition of administrative sanctions requires
consideration of:
the egregiousness of the defendant's actions, the
isolated or recurrent nature of the infraction, the
degree of scienter involved, the sincerity of the
defendant's assurances against future violations, the
defendant's recognition of the wrongful nature of his
conduct, and the likelihood that the defendant's
occupation will present opportunities for future
violations.
Steadman v. SEC, 603 F.2d 1126, 1140 (5th Cir. 1979), aff'd on
other grounds, 450 U.S. 91 (1981). The amount of a sanction
depends on the facts of each case and the value of the sanction
in preventing a recurrence. Berko v. SEC, 316 F.2d 137, 141 (2d
Cir. 1963); Leo Glassman, 46 S.E.C. 209, 211 (1975); Richard C.
Spangler, Inc., 46 S.E.C. 238, 254 n. 67 (1976).
47. The activities for which Mr. Moses was enjoined were
egregious and long running and have persisted despite the Final
Judgment to which he consented. His occupation presents
opportunities for future violations.
48. There is no evidence of any mitigating circumstance.
He has not acknowledged the wrongfulness of his conduct and has
given no assurances against future violations. To the contrary,
in his Post Hearing Answer, he continues to deny that he engaged
in misconduct and states that he only signed the consent decree
because he thought it would end the matter. The violations were
not isolated. In fact, he acknowledged in his testimony, and the
exhibits show, that he continued to engage in misconduct
following the Final Judgment in SEC v. Microwave Cable T.V.
Partners through his roles as president of CM Capital and "senior
==========================================START OF PAGE 19======
consultant" to Windgate. He expresses the viewpoint in his Post
Hearing Answer that his current activities are legitimate because
conducted under the guise of "consultant" to a "general
partnership."
49. A severe sanction is also warranted to deter others
from similar activities. There is no support for the
Respondent's argument that a sanction is barred as Double
Jeopardy.
50. For the above reasons, a severe sanction is warranted
in this case. It is in the public interest to bar Respondent
Moses from association with any broker or dealer-[10]- and
from participating in any capacity in the offer, purchase or sale
of telecommunications licenses or franchises as regulated by the
FCC or local franchising authority or businesses conducted or
property managed pursuant to such regulation or franchises.
CERTIFICATION OF RECORD
51. Pursuant to Rule 351(b) of the Commission's Rules of
Practice, 17 C.F.R. Section 201.351(b) (1996), I hereby certify
that the record consists of the items set forth in the record
index issued by the Secretary of the Commission on May 8, 1996.
Specifically the record includes transcribed testimony from three
witnesses and approximately 38 exhibits offered by the Division.
It also includes the Division's January 26, 1996, Proposed
-[10]- The Division asked that Mr. Moses also be barred
from association with a municipal securities dealer, investment
company or investment adviser. Those sanctions, however, are
provided for in statutory sections other than Sections 15(b) and
19(h) of the Exchange Act, the sole authority cited for this
proceeding. The issue of whether a collateral bar can be imposed
is currently before the Commission.
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Findings of Fact and Conclusions of Law and Post Hearing
Memorandum of Law, Respondent Moses's "Answer to Proposed
Findings," dated March 15, 1996, and the Division's May 1, 1996,
Reply.
ORDER
52. Based on the findings and conclusions set forth above,
I ORDER, pursuant to Sections 15(b) and 19(h) of the Exchange
Act, that Robert I. Moses be and hereby is barred from
association with any broker or dealer and from participating in
any capacity in the purchase or sale of telecommunications
licenses or franchises as regulated by the FCC or local
franchising authority or businesses conducted or property managed
pursuant to such regulation or franchises.
54. 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. Section 201.360. Pursuant to that
rule, a petition for review of this initial decision may be filed
within 21 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 21
days after service of the initial decision upon him, 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.
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______________________________
Carol Fox Foelak
Administrative Law Judge
Washington, D.C.
May 28, 1996
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