UNITED STATES OF AMERICA Before the SECURITIES AND EXCHANGE COMMISSION SECURITIES ACT OF 1933 Release No. 7272 / March 7, 1996 SECURITIES EXCHANGE ACT OF 1934 Release No. 36941 / March 7, 1996 ADMINISTRATIVE PROCEEDING File No. 3-8772 ------------------------------- : In the Matter of : : M. RIMSON & CO., INC., : MOSHE RIMSON, : JONATHAN MENDE & : ORDER MAKING FINDINGS, ASSOCIATES, INC., : IMPOSING REMEDIAL SANCTIONS JONATHAN AURIELIO MENDE, : AND ISSUING A CEASE AND DESIST TODD LEVAUGHN HICKMAN, : ORDER BY DEFAULT AGAINST CHRISTIAN JEAN-MARIE GIRODET, : RESPONDENT CLAUDIO PETER MITCHELL AGUIRRE, : IODICE, III CLAUDIO PETER IODICE, III, : ALEX DAVID SHINDMAN, : YEVGENY G. SHKILKO, : DAVID FEYJIN, AND : ROGER DANTONI, III. : ------------------------------: Claudio Peter Iodice, III, is in Default under the Commission's Rules of Practice, Rules 155 and 200,-[1]- because he has not answered the Order Instituting Public Administrative and Cease and Desist Proceedings (Order), which the Commission issued on August 3, 1995, or the Show Cause order which I issued on February 2, 1996. In addition, Respondent Iodice failed to participate in a prehearing conference on November 28, 1995, and failed to appear at the hearing in this matter on December 4 through December 20, 1995, after being duly served with the Order and being duly notified of the time and place of the prehearing conference and the hearing. ---------FOOTNOTES---------- -[1]- 60 Fed. Reg. 32801, 32806 (1995) (to be codified at 17 C.F.R.  201.155 and 201.220). ==========================================START OF PAGE 2====== Accordingly, I find that the following allegations set out in the Order are true:-[2]- A. Respondent Iodice, 26, of New York, New York, Suffern, New York, and Boca Raton, Florida, was employed by M. Rimson & Co., Inc., a registered broker-dealer, from August to November 1993, but was never approved by the National Association of Securities Dealers, Inc. (NASD) as a registered representative at the firm. B. World Entertainment Concepts, Inc. (WECI) is a New York corporation organized on June 12, 1990. WECI securities are quoted on the NASD's Over-the-Counter Bulletin Board. At all relevant times, WECI was a penny stock within the meaning of Section 3(a)(51) of the Securities Exchange Act of 1934 (Exchange Act) and Rule 3a51-1 thereunder. C. During the period from about August 1993 through November 1993, Iodice willfully aided and abetted and caused Rimson & Co.'s violations of Section 17(a) of the Exchange Act and Rule 17a-3 thereunder, in that Rimson & Co. failed to make and keep for prescribed periods such records as the Commission, by rule, prescribes as necessary and appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Exchange Act. As part of that conduct, Iodice aided and abetted and caused Rimson & Co.'s creation and maintenance of forged or falsified books and records, or books and records containing otherwise inaccurate or untrue information. For example: 1. Rimson & Co. maintained a system (Type 1 account system) of recording false customer addresses on account documents, including new account forms, in order to conceal from regulators the existence of transactions with customers who resided in states where Rimson & Co. was not registered as a broker- dealer or where the securities being sold were not registered or approved for sale in the customer's state of residence; 2. Iodice participated in the creation of new account forms and order tickets which contained false information including, for example, forged registered representative or customer signatures, false names and false registered representative ---------FOOTNOTES---------- -[2]- The findings herein are binding solely upon Respondent Iodice, and not on any other respondent in this proceeding. ==========================================START OF PAGE 3====== numbers of registered representatives who did not solicit the customer, and false customer addresses pursuant to the Type 1 account system. D. During the period from about August through November 1993, Iodice willfully aided and abetted and caused Rimson & Co.'s violations of Section 15(b) of the Exchange Act and Rule 15b7-1 thereunder, in that Rimson & Co., a registered broker-dealer, effected transactions in, or induced the purchase or sale of, securities where natural persons associated with Rimson & Co. who effected or were involved in effecting such transactions were not registered or approved in accordance with the standards of training, experience, competence, and other standards (including but not limited to submitting and maintaining all required forms, paying all required fees, and passing any required examinations) established by the rules of the NASD, the national securities association of which Rimson & Co. is a member. In particular, from about August through November 1993, Iodice worked at Rimson & Co., held himself out as a Rimson & Co. broker, effected transactions in securities, and was otherwise involved in effecting transactions in securities, while he was not registered or approved in accordance with NASD rules. E. Iodice willfully violated Section 17(a) of the Securities Act of 1933 (Securities Act) in that, in the offer or sale of securities, by the use of the means or instruments of transportation or communication in interstate commerce or by the use of the mails, directly or indirectly, he employed devices, schemes or artifices to defraud; obtained money or property by means of untrue statements of material facts or omitted to state material facts necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading; or engaged in transactions, practices or courses of business which operated or would operate as a fraud or deceit upon the purchaser. In particular, during the period from about August through November 1993, Iodice made material misrepresentations and omissions in the offer or sale of securities, including, but not limited to, WECI securities, by: 1. making baseless price predictions; 2. making false statements that WECI shares would be listed on Nasdaq ==========================================START OF PAGE 4====== 3. effecting unauthorized trades in customer accounts and making material misrepresentations and omissions in an attempt to get customers to ratify the unauthorized trades and falsely representing that unauthorized trades would be cancelled; 4. failing to disclose the risks of investing in WECI securities, including failing to disclose that WECI is a speculative penny stock; and 5. failing to disclose that he was receiving compensation for his sales of WECI securities from a promoter of WECI securities in the form of cash kickbacks, transfers of WECI stock, or other means. F. Iodice willfully violated Section 10(b) of the Exchange Act and Rule 10b-5 thereunder in that, directly or indirectly, by use of the means or instrumentalities of interstate commerce, or of the mails, in connection with the purchase or sale of securities, he employed devices, schemes or artifices to defraud; made untrue statements of material facts or omitted to state material facts necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading; or engaged in acts, practices or courses of business which operated or would operate as a fraud or deceit. In particular, Iodice engaged in the conduct described in paragraph E, above. In view of the foregoing, I find it in the public interest to sanction Respondent Iodice pursuant to Sections 8A of the Securities Act and Sections 15(b), 19(h), 21B and 21C of the Exchange Act. I ORDER that: A. Iodice cease and desist from committing or causing any violation and any future violation of Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder; B. Iodice cease and desist from causing any violation and any future violation of Sections 15(b) and 17(a) of the Exchange Act and Rules 15b7-1 and 17a-3 promulgated thereunder; ==========================================START OF PAGE 5====== C. Effective immediately, Iodice be, and hereby is, barred from association with any broker or dealer; D. Effective immediately, Iodice be, and hereby is, barred from participating in the offering of any penny stock, including (i) acting as a promoter, finder, consultant, or other person who engages in actions with a broker, dealer or issuer for purposes of the issuance or trading in any penny stock, or (ii) inducing or attempting to induce the purchase or sale of any penny stock; E. Iodice pay a civil money penalty in the amount of $100,000; and F. Iodice pay disgorgement in the amount of $40,001.25, plus prejudgment interest from September 30, 1993, which at the date of this order amounts to $8,887.51, for a total of $48,878.76. Interest shall continue to accrue until funds owed are paid, pursuant to Rule 600 of the Commission's Rules of Practice.-[3]- All funds due according to this order must be paid, pursuant to Rule 601 of the Commission's Rule of Practice,-[4]- no later than 21 days after service of this order on Respondent Iodice and shall be: (a) made by United States postal money order, certified check, bank cashier's check or bank money order; (b) made payable to the U.S. Securities and Exchange Commission; (c) hand-delivered to the Comptroller, Securities and Exchange Commission, 450 Fifth Street, N.W., Washington, D.C. 20549; and (d) submitted under cover letter which identifies Iodice as the Respondent in this proceeding and the file number of this proceeding, a copy of which cover letter shall be sent served on the undersigned and counsel for the Division of Enforcement. Pursuant to Rule 610 of the Commission's Rules of Practice,-[5]- the Division of Enforcement shall submit a ---------FOOTNOTES---------- -[3]- 60 Fed. Reg. 32819 (1995) (to be codified at 17  201.600). -[4]- 60 Fed. Reg. 32819 (1995) (to be codified at 17 C.F.R.  201.601). -[5]- 60 Fed. Reg. 32819 (1995) (to be codified at 17 C.F.R.  201.610). ==========================================START OF PAGE 6====== proposed plan of disgorgement no later than 60 days after funds or other assets have been turned over by Respondent Iodice. ____________________________ Lillian A. McEwen Administrative Law Judge