Release No. 7708 / August 2, 1999
Securities Exchange Act of 1934
Release No. 41679 / August 2, 1999
File No. 3-9944
|In the Matter of
|ORDER INSTITUTING 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,
MAKING FINDINGS AND IMPOSING
The Commission deems it appropriate and in the public interest that administrative and cease-and-desist proceedings be instituted 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"), with respect to Steven J. Cook ("Cook"). II. In anticipation of these proceedings, Cook has submitted an Offer of Settlement ("Offer") which the Commission has determined to accept. In determining to accept the Offer, the Commission considered cooperation afforded the Commission staff by Cook. Solely for the purpose of these proceedings and any other proceedings brought by or on behalf of the Commission or to which the Commission is a party, and without admitting or denying the findings contained herein, except that Cook admits the matters described in paragraphs III.A. and III.B. of this Order Instituting 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, Making Findings and Imposing Remedial Sanctions ("Order"), Cook has consented to the findings and sanctions set forth below.
Accordingly, IT IS ORDERED that proceedings pursuant to Section 8A of the Securities Act and Sections 15(b), 19(h) and 21C of the Exchange Act be, and they hereby are, instituted.
On the basis of this Order and the Offer submitted by Cook, the Commission finds that:
A. Cook has been licensed as a registered representative since February 1991.
B. From August 1995 through July 1996, Cook was employed by A.G. Edwards & Sons, Inc., ("A.G. Edwards") as a registered representative.
C. While employed by A.G. Edwards, Cook recklessly made false statements to his customers in connection with the offer, purchase and sale of the securities of Citadel Computer Systems, Inc. ("Citadel"). Among other things, Cook made false statements to his customers concerning: (1) projected price increases in Citadel stock over the two months following such sales; (2) the likelihood of Citadel stock being listed on NASDAQ or an exchange withing two weeks of such sales; (3) that the securities being offered were part of an initial public offering by Citadel; and (4) the profitability of Citadel.
D. While employed by A.G. Edwards, Cook recommended to certain customers the purchase of the common stock of Citadel and certain other microcap securities quoted on the OTC Bulletin Board without regard to the suitability of such securities to those customers' financial needs and circumstances and their investment objectives.
E. While employed by A.G. Edwards, Cook engaged in unauthorized transactions in the accounts of his customers.
F. By reason of the conduct described in paragraphs III.C. through III.E. above, Cook willfully violated Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder.
In view of the foregoing, it is in the public interest to impose the sanctions specified in the Offer submitted by Cook. Accordingly,
IT IS ORDERED that the Respondent, Steven J. Cook, be and hereby is, suspended from association in any capacity with any broker or dealer for a period of twelve months, effective on the second Monday following the entry of this Order.
IT IS FURTHER ORDERED, pursuant to Section 8A of the Securities Act and Section 21C of the Exchange Act that the Respondent, Steven J. Cook, cease and desist from committing or causing any violation and any future violation of Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder.
By the Commission.
Jonathan G. Katz