==========================================START OF PAGE 1====== UNITED STATES OF AMERICA Before the SECURITIES AND EXCHANGE COMMISSION SECURITIES ACT OF 1933 Release No. 7317 / July 30, 1996 SECURITIES EXCHANGE ACT OF 1934 Release No. 37493 / July 30, 1996 ADMINISTRATIVE PROCEEDING File No. 3-9001 --------------------------------- : In the Matter of : : : : ORDER MAKING FINDINGS AND JOHN SILSETH, : IMPOSING REMEDIAL SANCTIONS : Respondent. : : : ---------------------------------- I. On May 13, 1996, the Commission deemed it appropriate and in the public interest to institute proceedings pursuant to Section 8A of the Securities Act of 1933 ("Securities Act") and Sections 15(b), 19(h) and 21C of the Securities Exchange Act of 1934 ("Exchange Act") against John Silseth ("Silseth")("Order Instituting Proceedings"). -[1]- In response to the institution of these administrative proceedings, Silseth has submitted an Offer of Settlement which the Commission has determined to accept. Solely for the purpose of these proceedings and any other proceeding brought by or on behalf of the Commission or to which the Commission is a party, and without admitting or denying the findings herein, except for those set forth in Section II.A. below, which Silseth admits, he ---------FOOTNOTES---------- -[1]- See In the Matter of John Silseth, Order Instituting Administrative Proceedings Pursuant to Section 8A of the Securities Act of 1933 and Sections 15(b), 19(h) and 21C of the Securities Exchange Act of 1934, Admin. Proc. File No. 3- 9001, May 13, 1996. ==========================================START OF PAGE 2====== consents to the entry of this Order Making Findings and Imposing Remedial Sanctions ("Order"). II. On the basis of this Order and the Respondent's Offer of Settlement, the Commission makes the following findings: -[2]- A. From in or about May 1986 to in or about January 1993, Silseth was a registered representative with several broker- dealers registered with the Commission pursuant to Section 15(b) of the Exchange Act. B. From in and around 1989 until June 1991, several individuals engaged in an elaborate fraudulent scheme involving the common stock of Angeion Corporation ("Angeion"). The purpose of the scheme was to create the appearance of activity in the stock of Angeion and thus create the impression on the investing public of a demand for the stock. This was done by engaging in manipulative devices including matched trades, wash trades and stock parking, in violation of Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. -[3]- C. Specifically, between March 1991 and June 1991, Silseth caused and willfully aided and abetted violations of Section 17(a) of the Securities Act, Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, in that he knew or was reckless in not knowing that four customer accounts engaged in matched trades and that one customer account engaged in wash trades. Silseth provided knowing and substantial assistance with respect to the customers' violations by acting as the registered representative for these accounts and executing five matched trades involving 178,000 shares of Angeion valued at approximately $1.4 million ---------FOOTNOTES---------- -[2]- The findings herein are made pursuant to Respondent Silseth's Offer of Settlement and are not binding on any other person or entity named as a respondent in this or any other proceeding. -[3]- A matched trade is the entering of a sell (or buy) order knowing that a corresponding buy (or sell) order of substantially the same size, at substantially the same time and at substantially the same price, either has been or will be entered. A wash trade is a securities transaction which involves no change in the beneficial ownership of the security. Parking is the sale of securities subject to an agreement or understanding that the securities will be repurchased by the seller at a later time and at a price which leaves the economic risk on the seller. ==========================================START OF PAGE 3====== and at least two wash trades involving 125,000 shares of Angeion valued at approximately $1.1 million. ==========================================START OF PAGE 4====== III. Accordingly, IT IS HEREBY ORDERED, effective immediately: A. That Silseth be barred from associating with any broker, dealer, investment company, investment adviser, or municipal securities dealer. B. That pursuant to Section 8A of the Securities Act and Section 21C of the Exchange Act, Silseth cease and desist from committing or causing any violation, and committing or causing any future violations, of Section 17 (a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. C. That disgorgement is set against Silseth in the amount of $18,937.50 representing his gains in connection with the conduct alleged in Section II.B., plus interest thereon; provided, however, that such disgorgement and interest is waived based upon Silseth's sworn representations in his Statement of Financial Condition dated May 23, 1996, and submitted to the Commission. D. That based upon Silseth's sworn representations in his Statement of Financial Condition dated May 23, 1996, and submitted to the Commission, the Commission is not ordering Silseth to pay a civil penalty pursuant to Section 21B of the Exchange Act or requiring payment of disgorgement and interest. The determination not to impose a civil penalty and to waive the payment of disgorgement and interest thereon is contingent upon the accuracy and completeness of Silseth's sworn Statement of Financial Condition provided to the Commission. If at any time following the entry of this Order the Commission obtains information indicating that Silseth's representations to the Commission concerning his assets, income, liabilities or net worth were fraudulent, misleading, inaccurate or incomplete in any material respect as of the time such representations were made, the Commission may, at its sole discretion and without prior notice to Silseth, institute administrative proceedings concerning the entry of an order requiring Silseth to pay disgorgement, interest at the legal rate, dating from the date of the violative conduct to the date of this Order, and imposing a civil penalty. In connection with any such proceedings, the only issue shall be whether the financial information provided by Silseth was fraudulent, misleading, inaccurate or incomplete in any material respect as of the time such representations were made, and the amount of a civil penalty to be imposed. Silseth may not, by way of defense to such proceedings, challenge the ==========================================START OF PAGE 5====== validity of this Order or Silseth's Offer of Settlement, contest the allegations in the Order Instituting Proceedings, the amount of disgorgement and interest, or assert that disgorgement, interest or the payment of a civil penalty should not be ordered. By the Commission. Jonathan G. Katz Secretary