\UNITED STATES OF AMERICA before the SECURITIES AND EXCHANGE COMMISSION SECURITIES EXCHANGE ACT OF 1934 Release No. 37804 / October 10, 1996 ADMINISTRATIVE PROCEEDING File No. 3-9014 ------------------------------- : In the Matter of : : Greenway Capital Corporation : ORDER MAKING FINDINGS AND and Joseph M. Guccione : IMPOSING REMEDIAL SANCTIONS : : ------------------------------- I. In these public administrative and cease-and-desist proceedings instituted on May 30, 1996, by the Securities and Exchange Commission ("Commission"), pursuant to Sections 15(b), 19(h) and 21C of the Securities Exchange Act of 1934 ("Exchange Act") against Greenway Capital Corporation ("GWAY") and pursuant to Section 21C of the Exchange Act against Joseph M. Guccione ("Guccione"), Respondents GWAY and Guccione have submitted an Offer of Settlement ("Offer") 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, prior to a hearing pursuant to the Commission's Rules of Practice, and without admitting or denying the findings contained herein, except as to the jurisdiction of the Commission over them and over the subject matter of this proceeding and as to the findings contained in Sections II.A. and B., below, which are admitted, GWAY and Guccione, by their Offer, consent to the entry of findings and remedial sanctions set forth below. II. On the basis of this Order Making Findings and Imposing Remedial Sanctions ("Order"), the Order Instituting Public Administrative and Cease-and-Desist Proceedings and the Offer, the Commission finds that: ==========================================START OF PAGE 2====== A. GWAY, headquartered in New York, New York, has been registered with the Commission as a broker-dealer pursuant to Section 15(b) of the Exchange Act since September 22, 1989. B. Guccione was the president of GWAY during the relevant time period. In November 1995, Guccione resigned as GWAY's president and is now associated with the firm as a registered representative. C. During the period from about May 1994 through January 1995, GWAY willfully violated Section 15(g) of the Exchange Act and Rules 15g-2 through 15g-6 and 15g-9 thereunder, and Guccione caused GWAY's violations of Section 15(g) of the Exchange Act and Rules 15g-2 through 15g-6 and 15g-9 thereunder, in that by the use of the means or instrumentalities of interstate commerce or by use of the mails, GWAY, without complying with the rules promulgated under, or with the requirements of, Section 15(g) of the Exchange Act and Rules 15g-2 through 15g-6 and 15g-9 thereunder, induced or attempted to induce customers to purchase or sell shares of common stock of IDC Holdings, Ltd. ("IDCH"), a penny stock as defined by Section 3(a)(51)(A) of the Exchange Act. D. As part of the violative conduct described in Section II.C. above, GWAY violated the aforementioned penny stock disclosure rules in connection with 122 solicited buy transactions in the stock of IDCH, in 92 customer accounts totalling approximately $387,551, effected through GWAY's Boca Raton, Florida branch office. GWAY, among other things, failed to: (1) furnish to its customers a Schedule 15G Risk Disclosure Document prior to effecting their transactions in IDCH stock, as required by Rule 15g-2; (2) comply with the requirements to disclose to customers within the required time such information as bid and offer quotations, the aggregate amount of the firm's compensation, and the aggregate amount of any associated person's compensation, as required by Rules 15g-3 through 15g-5; and (3) comply with the requirement to provide customers with monthly statements containing market value and other information, as required by Rule 15g-6. In addition, GWAY failed to approve customer accounts for transactions in penny stocks in accordance with the procedures set forth in Rule 15g-9. III. In view of the foregoing the Commission deems it appropriate and in the public interest to impose the sanctions specified in the Offer submitted by GWAY and Guccione. Accordingly, IT IS HEREBY ORDERED THAT: ==========================================START OF PAGE 3====== A. GWAY and Guccione, pursuant to Section 21C of the Exchange Act, shall cease and desist from committing or causing any violations and any future violations of Section 15(g) of the Exchange Act and Rules 15g-2 through 15g-6 and 15g-9 thereunder. B. GWAY be, and hereby is, censured. C. GWAY shall pay disgorgement of $115,258, and pre- judgment interest of $14,742, which amounts shall be paid in accordance with the terms specified in Sections III.E. and F., below. D. GWAY shall pay a civil money penalty in the amount of fifty thousand dollars ($50,000), which amount shall be paid in accordance with the terms specified in Sections III.E. and F., below. E. The disgorgement, pre-judgment interest and civil money penalty ordered in Sections III.C. and D., above, shall be paid in accordance with the following schedule: (a) a lump sum of thirty thousand dollars ($30,000) shall be paid within thirty (30) days from the entry of the Order; and (b) the remaining balance of one hundred and fifty thousand dollars ($150,000) shall be paid in eleven (11) equal monthly installments every thirty (30) days beginning sixty (60) days from the entry of the Order. F. All payments required by Sections III.C. and D. above shall be to the United States Treasury: (a) made by United States postal money order, certified check, bank cashier's check, or bank money order; (b) made payable to the "United States Securities and Exchange Commission," bearing on its face the caption "Greenway Capital Corporation" and the file number of these proceedings; (c) sent to the Securities and Exchange Commission, Office of the Comptroller, Room 2067, Stop 2-5, 450 Fifth Street, N.W., Washington, D.C. 20549; and (d) submitted under cover letter that specifies "Greenway Capital Corporation and Joseph M. Guccione" as the Respondents in these proceedings, a copy of which cover letter and money order or check shall be sent to Spencer C. Barasch, Assistant Regional Director, Securities and Exchange Commission, Southeast Regional Office, 1401 Brickell Avenue, Suite 200, Miami, Florida 33131. G. GWAY shall, within thirty (30) days from the entry of the Order, comply with its agreement and undertaking to review and where appropriate establish and implement effective, or improve existing, written internal procedures to ensure future compliance with Section 15(g) of the Exchange Act and Rules 15g-2 through 15g-6 and 15g-9 thereunder. H. Within sixty (60) days from the entry of the Order, GWAY shall engage an Independent Consultant who is not ==========================================START OF PAGE 4====== unacceptable to the Commission's staff. Such Independent Consultant shall have his or her compensation and expenses borne exclusively by GWAY. The Independent Consultant may retain such consultants as he or she shall deem necessary and appropriate for the task. I. The Independent Consultant shall review GWAY's existing policies and procedures to determine the adequacy of such policies and procedures to reasonably detect and prevent the violations of the federal securities laws that gave rise to this proceeding, and with respect to such policies and procedures the Independent Consultant shall: (1) recommend the adoption and implementation of any new and/or revised procedures deemed necessary or appropriate; and (2) recommend the adoption and implementation of any new and/or revised training programs deemed necessary or appropriate. J. The Independent Consultant's recommendations shall be made in the form of a draft report submitted to the Chief Executive Officer and Board of GWAY and the Commission's staff within sixty (60) days of the appointment of the Independent Consultant. (1) Within thirty (30) days of receipt of the draft report submitted by the Independent Consultant, the Chief Executive Officer and Board of GWAY shall, in writing, advise the Independent Consultant of those recommendations that GWAY has determined not to accept because they are unduly burdensome. Regarding any recommendation GWAY believes is unduly burdensome, GWAY shall undertake to propose an alternative policy or procedure designed to achieve the same result. GWAY and the Independent Consultant shall then attempt in good faith to reach agreement on any policy and procedure as to which there is a dispute. (2) If there is a dispute over a policy or procedure recommended by the Independent Consultant then the Independent Consultant shall evaluate GWAY's alternative policy or procedure. GWAY will, however, abide by the determination of the Independent Consultant with regard thereto and adopt those recommendations deemed appropriate by the Independent Consultant. (3) The Independent Consultant shall complete the aforementioned reviews and submit a written final report thereon to GWAY and the Commission's staff within sixty (60) days following the date of the draft report. ==========================================START OF PAGE 5====== K. GWAY shall cooperate fully with the Independent Consultant and shall provide such person with access to its files, books, records, and personnel as reasonably requested for the review by the Independent Consultant. L. GWAY shall take all necessary and appropriate steps to adopt and implement the recommendations contained in the report. M. Within thirty (30) days of receipt of the final report, GWAY shall file an affidavit with the Commission's staff stating that GWAY has put in place a system of policies and procedures reasonably designed to prevent and/or detect the violations of the securities laws which gave rise to this proceeding or is in the process of so doing, providing a reasonable estimate not to exceed thirty (30) additional days without approval of the Commission's staff, as to when implementation shall be completed. By the Commission. Jonathan G. Katz Secretary