UNITED STATES OF AMERICA Before the SECURITIES AND EXCHANGE COMMISSION Securities Exchange Act of 1934 Release No. 38264 / February 11, 1997 Administrative Proceedings File No. 3-9245 ______________________________ : : ORDER INSTITUTING PUBLIC In the Matter of : ADMINISTRATIVE AND CEASE- : AND-DESIST PROCEEDINGS : PURSUANT TO SECTIONS 15(b), HOWARD F. RUBIN, : 19(h) AND 21C OF THE : SECURITIES EXCHANGE ACT OF Respondent. : 1934, MAKING FINDINGS, : AND ORDER OF THE COMMISSION ______________________________: I. The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest that a public administrative proceeding pursuant to Sections 15(b) and 19(h) of the Securities Exchange Act of 1934 ("Exchange Act"), and a cease-and-desist proceeding pursuant to Section 21C of the Exchange Act, be, and hereby are, instituted against respondent Howard F. Rubin ("Rubin"). II. In anticipation of the institution of these proceedings, Rubin has submitted an Offer of Settlement ("Offer"), which the Commission has determined is in the public interest to accept. Solely for the purpose of these proceedings, and any other proceeding brought by or on behalf of the Commission or in which the Commission is a party, and without admitting or denying the findings set forth below, except as to the jurisdiction of the Commission over him and over the subject matter of these proceedings which are admitted, Rubin consents to the entry of the findings, the imposition of remedial sanctions, and order of the Commission set forth herein. ==========================================START OF PAGE 2====== III. On the basis of this Order and the Offer, the Commission finds-[1]- that: RELEVANT ENTITY AND RESPONDENT 1. The Firm is a broker-dealer registered with the Commission pursuant to Section 15(b) of the Exchange Act and a member of the National Association of Securities Dealers, Inc. ("NASD"). 2. Rubin, 35, of New York, New York, was, on October 12, 1993, permanently enjoined by the United States District Court for the Southern District of New York, in SEC v. Rubin, 91 Civ. 6531 (MBM), from violating of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Exchange Act and Rule 10b-5. At that time, Rubin was a registered representative associated with a broker-dealer registered with the Commission (the "Broker- Dealer"). Rubin's registration with the Broker-Dealer terminated on February 3, 1994. From on or about March 2, through November 17, 1994, Rubin was employed by the Firm. On February 9, 1995, the Commission barred Rubin on consent from association with any broker, dealer, investment company, investment adviser or municipal securities dealer. In re Howard F. Rubin, Exchange Act Release No. 35349 (Feb. 9, 1995), 58 SEC Docket 1478 (Mar. 7, 1995). RUBIN AIDED AND ABETTED, AND WAS A CAUSE OF, THE FIRM'S VIOLATIONS OF SECTIONS 15(b)(7) AND 17(a)(1) OF THE EXCHANGE ACT AND RULES 15b7-1 AND 17a-3(a) 3. As a result of the permanent injunction entered against Rubin in SEC v. Rubin, he became subject to a statutory disqualification with respect to membership or participation in, or association with a member of any self-regulatory organization under Section 3(a)(39)(F) of the Exchange Act, and subject to a disqualification under Section 4(g) of Article II of the NASD By-Laws. 4. The Firm violated: (a) Section 15(b)(7) of the Exchange Act and Rule 15b7-1 thereunder, in that the Firm effected transactions in, or induced the purchase or sale of, securities when, among others, Rubin a natural person associated with the Firm who effected or was involved in effecting such transactions, was ---------FOOTNOTES---------- -[1]- The findings herein are made pursuant to the Offer and shall not be binding on any other person or entity in these or any other proceedings. ==========================================START OF PAGE 3====== not registered or approved in accordance with the standards of training, experience, competence, and other qualification 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 the Firm is a member; and (b) Section 17(a)(1) of the Exchange Act and Rule 17a-3(a) thereunder, in that the Firm failed to make and keep 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. For example, the Firm: (i) in violation of Exchange Act Rule 17a-3(a)(3), created and maintained records under the name "Broad Comm" by which the Firm recorded Rubin's trading profits and losses, expenses, commission income and compensation, and paid Rubin's creditors or transferred funds to Rubin's bank accounts, rather than place Rubin on the Firm's payroll, all of which concealed Rubin's unlawful association with the Firm; (ii) in violation of Exchange Act Rule 17a-3(a)(2), placed false identifying information concerning the registered representative on Rubin's customer account statements; and (iii) in violation of Exchange Act Rule 17a-3(a)(12), failed to make and keep current a questionnaire or employment application for Rubin or retain a full, correct and complete copy of any and all applications for the registration of Rubin with the NASD, or approval thereof. 5. Rubin, during the period from on or about March 2, through November 17, 1994, willfully aided and abetted, and was a cause of, the Firm's violations of Sections 15(b)(7) and 17(a)(1) of the Exchange Act and Rules 15b7-1 and 17a-3(a) thereunder, in that he: (a) associated with the Firm, effected or was involved in effecting securities transactions through the Firm, and held himself out as a registered representative of the Firm when he knew or should have known that he was disqualified from being associated with the Firm, and was not registered or approved in accordance with the standards of training, experience, competence, and other qualification standards (including but not limited to submitting and maintaining all required forms, paying all required fees, and passing any ==========================================START OF PAGE 4====== required examinations) established by the rules of the NASD, the national securities association of which the Firm is a member; (b) failed to execute a current questionnaire or employment application, or Uniform Application for Securities Industry Registration or Transfer for submission to the NASD, while he was associated with the Firm; and (c) entered into a compensation arrangement with the Firm that resulted in the books and records violations set forth herein. 6. Rubin, directly or indirectly, was unjustly enriched by $241,051 in income as a result of these violations. IV. In view of the foregoing, the Commission deems it appropriate and in the public interest to accept the Offer and to impose the sanctions specified in the Offer. Accordingly, IT IS HEREBY ORDERED that, pursuant to Section 21C of the Exchange Act, Rubin cease and desist from causing any violation and any future violation of Sections 15(b)(7) and 17(a)(1) of the Exchange Act and Rules 15b7-1 and 17a-3(a) thereunder. IT IS HEREBY FURTHER ORDERED that, pursuant to Section 21B of the Exchange Act, Rubin shall pay a civil penalty to the United States Treasury in the amount of $15,000. IT IS HEREBY FURTHER ORDERED that such penalty be paid as follows: 1. $3,750 by the close of business on the tenth business day following the date of this Order; 2. $3,750, plus postjudgment interest thereon at the rate specified by 28 U.S.C  1961 and calculated as provided therein on the fortieth day after the date of this Order; 3. $3,750, plus postjudgment interest thereon at the rate specified by 28 U.S.C  1961 and calculated as provided therein on the seventieth day after the date of this Order; and 4. $3,750, plus postjudgment interest thereon at the rate specified by 28 U.S.C  1961 and calculated as provided therein on the one-hundredth day after the date of this Order. ==========================================START OF PAGE 5====== All such payments shall be made in the following manner: (a) by United States postal money order, certified check, bank cashier's check or bank money order; (b) payable to the Securities and Exchange Commission; (c) delivered to the Office of the Secretary, Securities and Exchange Commission, 450 Fifth Street, N.W., Room 6184 Stop 6-9, Washington, D.C. 20549; and (d) submitted under cover of a letter which identifies Rubin as a Respondent in these proceedings, states the file number of these proceedings, and identifies the payment as a civil penalty pursuant to Section 21B of the Exchange Act. A copy of such cover letter and money order or check shall be sent to the Securities and Exchange Commission, Northeast Regional Office, Seven World Trade Center, 13th Floor, New York, New York 10048, Attn: Dann‚ L. Bullock, Esq. IT IS HEREBY FURTHER ORDERED that, pursuant to Sections 21B(e) and 21C(e) of the Exchange Act, Rubin shall pay disgorgement of $241,051 plus prejudgment interest thereon, but that payment of such amount by waived based on Rubin's inability to pay. Rubin has submitted sworn financial statements and other evidence and has asserted his financial inability to pay disgorgement plus prejudgment interest thereon. The Commission has reviewed sworn financial statements and other evidence provided by Rubin and has determined that Rubin does not have the financial ability to pay disgorgement of $241,051 plus prejudgment interest thereon. IT IS HEREBY FURTHER ORDERED that the Division of Enforcement may, at any time following the entry of this Order, petition the Commission to: (1) reopen this matter to consider whether Rubin provided accurate and complete financial information at the time such representations were made; (2) determine the amount of disgorgement and prejudgment interest to order; and (3) seek any additional remedies that the Commission would be authorized to impose in this proceeding if Rubin's Offer had not been accepted. No other issues shall be considered in connection with this petition other than whether the financial information provided by Rubin was fraudulent, misleading, inaccurate or incomplete in any material respect, the amount of disgorgement and prejudgment interest to order and whether any additional remedies should be imposed. Rubin may not, by way of defense to any such petition, contest the findings in this Order or the Commission's authority to impose any additional remedies that were available in the original proceeding. By the Commission. Jonathan G. Katz Secretary Service List Rule 141 of the Commission's Rules of Practice provides that the Secretary, or another duly authorized officer of the Commission, shall serve a copy of the Order Instituting Proceedings, Making Findings, and Order of the Commission on each person named as a party in the order and their legal agent. The attached Order Instituting Public Administrative and Cease-and-Desist Proceedings Pursuant to Sections 15(b), 19(h) and 21C of the Securities Exchange Act of 1934, Making Findings, and Order of the Commission has been sent to the following parties and other persons entitled to notice: Honorable Brenda P. Murray Chief Administrative Law Judge Securities and Exchange Commission 450 5th Street, N.W., Stop 11-6 Washington, D.C. 20549 Securities and Exchange Commission Northeast Regional Office Seven World Trade Center New York, New York 10048 Attn: Dann‚ L. Bullock, Esq. Howard F. Rubin 245 East 58th Street, Apt. 26C New York, New York 10022-1201