UNITED STATES SECURITIES AND EXCHANGE COMMISSION
SECURITIES ACT OF 1933
Release No. 8127 / September 3, 2002
SECURITIES EXCHANGE ACT OF 1934
Release No. 46450 / September 3, 2002
File No. 3-10884
SEC CHARGES REGISTERED REPRESENTATIVE WITH FRAUD IN CONNECTION WITH ADJUSTED TRADING IN INVESTMENT-GRADE CORPORATE BONDS
On September 3, 2002 the Commission instituted public administrative and cease-and-desist proceedings against Leslie Arouh, who is a registered representative associated with a registered broker-dealer. The Division of Enforcement alleges that in March and April 1998, Arouh and a portfolio manager associated with a registered investment adviser planned, negotiated, and transacted a series of adjusted trades in investment-grade bonds between Arouh's broker-dealer at the time and the portfolio manager's investment adviser. Adjusted trading is a fraudulent trading practice where a person sells a security at a price above the prevailing market price and purchases another security at a corresponding price above the prevailing market price to offset the overpayment in the first transaction. A hearing will be scheduled before an administrative law judge to determine whether Arouh committed the alleged violations, to accord Arouh with an opportunity to establish defenses to such allegations, to determine what sanctions, if any, are appropriate in the public interest, and to determine whether civil penalties should be imposed.