UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION
Securities Exchange Act of 1934
Release No. 38814 / July 3, 1997
Securities Investor Protection Act of 1970
Release No. 164 / July 3, 1997
ADMINISTRATIVE PROCEEDING
File No. 3-9224
In the Matter of BRIAN J. MCCAHERY
ORDER MAKING FINDINGS AND IMPOSING REMEDIAL SANCTIONS
I.
In connection with public administrative proceedings instituted
against Brian J. McCahery ("McCahery") pursuant to Sections 15(b) and 19(h)
of the Securities Exchange Act of 1934 ("Exchange Act") and Section 14(b)
of the Securities Investor Protection Act of 1970 ("SIPA"),<(1)>
McCahery has submitted an Offer of Settlement ("Offer") which the
Securities and Exchange Commission ("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, McCahery, by his Offer, consents to the entry of
this Order Making Findings and Imposing Remedial Sanctions ("Order").
II.
On the basis of this Offer, the Commission finds<(2)>that:
1. U.S. Equity Management Corp. ("U.S. Equity Management") was
registered with the Commission as a broker-dealer, pursuant to Section
15(b) of the Exchange Act, from September 14, 1993 to November 9, 1994;
2. From approximately August 1993 through May 1995, McCahery
possessed, indirectly or directly, the power to direct, and cause the
direction of, the management, policies and daily operations of U.S. Equity
<(1)> The Order Instituting Proceedings was issued on January
16, 1997. See Exch. Act. Rel. No. 38176.
<(2)> Any findings contained herein are made pursuant to
McCahery's Offer of Settlement and are not binding on
any other person or entity named as a respondent in
this or any other proceeding.
Management, which, prior to its cessation of operations, held special
rights to trade a proprietary account on the American Stock Exchange;
3. From approximately August 1993 through May 1995, McCahery
misappropriated approximately $3 million in U.S. Equity Management's
customers' funds and, as such, failed to act in a responsible manner to
avoid the financial collapse of U.S. Equity Management;
4. On September 22, 1995, the Honorable Shira A. Scheindlin,
United States District Court Judge, entered an Order<(3)>on consent
which, inter alia, appointed a trustee for the liquidation of the business
of U.S. Equity Management and removed the liquidation proceeding to the
Bankruptcy Court pursuant to SIPA; and
5. On December 21, 1995, McCahery pled guilty to a one count
Information charging him with wire fraud arising from his misappropriation
of customer funds through U.S. Equity Management<(4)>and, on May 3,
1996, McCahery was sentenced to three years in prison and ordered to pay
restitution.
III.
In view of the foregoing, the Commission finds that it is in the
public interest to impose the sanctions specified in the Offer of
Settlement.
Accordingly, IT IS ORDERED that McCahery be barred from association
with any broker, dealer, investment company, investment adviser or
municipal securities dealer, effective immediately.
For the Commission, by its Secretary, pursuant to delegated authority.
Jonathan G. Katz
Secretary
<(3)> Securities Investor Protection Corporation v. U.S.
Equity Management Corp., 95 CIV 8019 (SAS) (September
22, 1995).
<(4)> United States of America v. Brian J. McCahery, 95 CR.
1090 (JFK).
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