Securities Exchange Act of 1934
Release No. 41749 / August 17, 1999
File No. 3-9974
|In the Matter of
RAYMOND R. KRIPAITIS,
|ORDER INSTITUTING ADMINISTRATIVE
PROCEEDINGS PURSUANT TO SECTION
15(b)(6) OF THE SECURITIES
EXCHANGE ACT OF 1934, MAKING
FINDINGS AND IMPOSING REMEDIAL
The Commission is instituting these administrative proceedings pursuant to Section 15(b)(6) of the Securities Exchange Act of 1934 (the "Exchange Act") against Raymond R. Kripaitis ("Kripaitis").
Kripaitis has submitted an Offer of Settlement (the "Offer") which the Commission has determined to accept. Solely for the purposes of these proceedings and any other proceedings brought by or on behalf of the Commission or in which the Commission is a party, and without admitting or denying the findings contained in this Order Instituting Administrative Proceedings Pursuant to Section 15(b)(6) of the Securities Exchange Act of 1934, Making Findings and Imposing Remedial Sanctions ("Order"), except as to jurisdiction which Kripaitis admits, Kripaitis consents to the entry of this Order by the Commission.
On the basis of this Order and Kripaitis' Offer, the Commission makes the following findings:
A. In 1993 and 1994, Kripaitis was employed as a registered representative at a branch office of Josephthal Lyon & Ross, Incorporated ("Josephthal") in northern New Jersey.
B. In 1993, Kripaitis and an associate at another brokerage firm negotiated a secret arrangement with the then president of Teletek, Inc.1 under which they were to receive one share of Teletek stock for each five shares sold to their unsuspecting customers. Kripaitis and his associate thereafter sold Teletek stock without disclosing the arrangement or the compensation received to their customers. The associate initiated the relationship with the president of Teletek while Kripaitis handled the tasks of receiving and selling the shares and splitting the proceeds. Shares were transferred to the account of a corporation, organized to conceal the participation of Kripaitis and his associate, at Josephthal.
C. Section 17(a) of the Securities Act of 1933 (the "Securities Act") and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder prohibit, in the offer and in connection with the purchase or sale of securities, by the use of means or instruments of transportation and communication in interstate commerce or by the use of the mails, directly and indirectly, employing devices, schemes or artifices to defraud; obtaining money and property by means of or making untrue statements of material facts or omitting to state material facts necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading; or engaging in acts, transactions, practices or courses of business which operate or would operate as a fraud or deceit. By engaging in the conduct specified in paragraph III.B. above, Kripaitis willfully violated Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder.2
D. Kripaitis has submitted a sworn financial statement and other evidence and has asserted his financial inability to pay disgorgement, prejudgment interest and a civil penalty. The Commission has reviewed the sworn financial statement and other evidence provided by Kripaitis and has determined that Kripaitis does not have the financial ability to pay disgorgement, prejudgment interest and a civil penalty.
In view of the foregoing, the Commission has determined that it is in the public interest to accept Kripaitis' Offer and to impose the sanctions specified therein.
Accordingly, IT IS ORDERED that:
A. Kripaitis be and he is hereby barred from association with any broker or dealer.
B. Kripaitis pay disgorgement in a sum equal to the fair value of all gains and income received by him directly or indirectly in connection with the matters referred to in Paragraphs III. B. and C. above plus prejudgment interest, but that payment of such amount be waived based upon Kripaitis' demonstrated financial inability to pay.
C. 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 Kripaitis provided accurate and complete financial information at the time such representations were made; (2) determine the amount of the disgorgement, prejudgment interest and civil penalty to be imposed; and (3) seek any additional remedies that the Commission would be authorized to impose in this proceeding if Kripaitis' Offer had not been accepted. No other issues shall be considered in connection with this petition other than whether the financial information provided by Kripaitis was fraudulent, misleading, inaccurate or incomplete in any material respect, the amount of disgorgement, prejudgment interest and civil penalty to be imposed and whether any additional remedies should be imposed. Kripaitis 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
|1||Teletek, with offices in Las Vegas, Nevada, marketed international telephone calling services.|
|2||Kripaitis was charged in a criminal information in October 1996 with structuring financial transactions to avoid currency reporting requirements in violation of 31 U.S.C. § 5324(3). He later pleaded guilty.|