==========================================START OF PAGE 1====== UNITED STATES OF AMERICA Before the SECURITIES AND EXCHANGE COMMISSION Administrative Proceeding File No. 3-9048 Securities Exchange Act of 1934 Release No. 37483 / July 26, 1996 ------------------------------ : : ORDER INSTITUTING PUBLIC In the Matter of : PROCEEDINGS PURSUANT TO : SECTIONS 15(b), 19(h) AND 21C STEPHEN J. KANDEL : OF THE SECURITIES EXCHANGE ACT : OF 1934, MAKING FINDINGS AND : IMPOSING REMEDIAL SANCTIONS ------------------------------ I. The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest that public administrative proceedings be, and hereby are, instituted pursuant to Sections 15(b), 19(h), and 21C of the Securities Exchange Act of 1934 ("Exchange Act") against Stephen J. Kandel ("Respondent"). II. In anticipation of the institution of these proceedings, Respondent has submitted an Offer of Settlement, which the Commission has determined to accept. Solely for the purpose of these proceedings and any other proceedings brought by or on behalf of the Commission or in which the Commission is a party, Respondent admits the jurisdiction of the Commission and, without admitting or denying the findings contained below, except admitting his criminal plea and sentence described in Section III.D. and E., Respondent consents to the findings and the imposition of the remedial sanctions set forth below. III. On the basis of this Order Instituting Proceedings and the Offer of Settlement submitted by Kandel, the Commission finds ==========================================START OF PAGE 2====== that1: A. Respondent was born in 1944 and resides in La Jolla, California. B. From in or about January 1979 through at least 1991, Respondent was a principal owner and president of SK International Securities Corp. ("SK"), a broker-dealer registered with the Commission, with offices in California and New York. C. Between 1989 and 1991, in connection with the operation of SK, Respondent made cash payments to employees of SK's institutional customers, which were not disclosed to the institutional customers of SK. Such payments were made to employees who had directed business to SK in the past. D. On June 23, 1994, Respondent pleaded guilty in the United States District Court for the Southern District of New York to one criminal count of violating 31 U.S.C.  5324(a)(3), by structuring currency transactions for the purpose of evading the currency reporting requirements of 31 U.S.C.  5313(a) and the regulations promulgated thereunder, by making cash payments of not less than $509,850 to employees of SK's institutional customers. United States v. Kandel, Docket No. 94 Cr. 405 (S.D.N.Y.) E. On September 15, 1995, Respondent was sentenced to imprisonment for a term of eighteen months and ordered to pay $509,850 as a forfeiture, which he has already paid, and a fine of $30,685. F. From in or about January 1989 through at least 1991, Respondent willfully violated Exchange Act Section 10(b) and Rule 10b-5 thereunder, by failing to disclose the payments described above. IV. Based upon the foregoing, the Commission deems it appropriate to impose the sanctions specified by Respondent in his offer. Accordingly, IT IS HEREBY ORDERED that, effective immediately: A. Respondent be, and hereby is, barred from association with any broker, dealer, investment company, investment adviser or municipal securities dealer; and 1 These findings are solely for the purpose of these proceedings and are not binding on any other person named as a respondent in this or any other proceeding. ==========================================START OF PAGE 3====== B. Respondent shall cease and desist from committing or causing any violation, and any future violation, of Exchange Act Section 10(b) and Rule 10b-5 thereunder. By the Commission. Jonathan G. Katz Secretary