UNITED STATES OF AMERICA
|In the Matter of
JERALD M. BANKS,
|ORDER INSTITUTING PUBLIC
PROCEEDINGS PURSUANT TO
RULE 102(e) OF THE COMMISSION'S
RULES OF PRACTICE, MAKING
FINDINGS AND IMPOSING
The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest that public administrative proceedings be, and they hereby are, instituted pursuant to Rule 102(e)(3)(i)(A) of the Commission's Rules of Practice, 17 C.F.R. 201.102(e)(3)(i)(A)1 against Jerald M. Banks, ("Banks").
In anticipation of the institution of these administrative proceedings, Banks has submitted an Offer of Settlement ("Offer") which the Commission has determined to accept. Solely for the purpose of these proceedings, and any other proceedings brought by or on behalf of the Commission, or in which the Commission is a party, and prior to a hearing pursuant to the Commission's Rules of Practice, 17 C.F.R. 201.100 et. seq., and without admitting or denying any findings set forth herein, except as to jurisdiction and facts set forth in paragraphs III. A. and B. below, which he admits, Banks consents to the entry of this Order Instituting Public Proceedings Pursuant to Rule 102(e) of the Commission's Rules of Practice, Making Findings and Imposing Remedial Sanctions ("Order") set forth below.
On the basis of this Order and Banks' Offer of Settlement, the Commission finds that:
A. At all times relevant hereto, Jerald M. Banks was an attorney licensed in Canada.
B. On August 19, 1999, Banks was enjoined, on consent, by the United States District Court for the Southern District of New York from violations of Section 17(a) of the Securities Act of 1933 (the "Securities Act") [15 U.S.C. § 77q(a)] and Sections 10(b) and 13(b)(5) of the Securities Exchange Act of 1934 (the "Exchange Act") [15 U.S.C. §§ 78j(b) and 78m(b)(5)] and Rules 10b-5, 13b2-1, and 13b2-2 thereunder [17 C.F.R. §§ 240.10b-5, 240.13b2-1 and 240.13b2-2] in the action entitled SEC v. Jerald M. Banks, 99 Civ. 8855 (S.D.N.Y. filed Aug. 12, 1999) (TPG).
C. The Commission's Complaint in the action described in paragraph III.B. above alleges that the former senior management of Livent Inc. ("Livent" or the "company"), a Canadian-based theater owner and producer of live theatrical entertainment, orchestrated and implemented a fraudulent scheme to, among other things, inflate revenues reported by the company in financial statements filed with the Commission and disseminated publicly. In furtherance of this scheme, from 1996 through 1997, Banks drafted and finalized a number of agreements and/or actively dealt with the legal representatives of the counter parties in the negotiation and finalization of these agreements and, along with other Livent officers, concealed the agreements from the company's auditors in order to improperly record revenue from the transactions and inflate the company's revenues.
Based on the foregoing, the Commission deems it appropriate and in the public interest to accept the Offer of Settlement submitted by Banks and impose the sanctions specified therein.
Accordingly, IT IS HEREBY ORDERED that, effective immediately, Banks is denied the privilege of appearing or practicing before the Commission as an attorney for a period of five years.
IT IS FURTHER ORDERED that Banks comply with his undertaking to: on reasonable notice, and without service of a subpoena, cooperate with the Commission and its staff and truthfully disclose all information with respect to his activities and the activities of others about which the Commission or its staff may inquire; accept service, appear and testify in all investigations, administrative and judicial proceedings at which the Commission or its staff makes requests for such testimony except to the extent that the U.S. Department of Justice objects to such testimony; make himself available as may be required by the Commission or its staff; produce any documents within his possession, custody or control, domestic or foreign, which are requested by the Commission or its staff; be accompanied at any time he so desires by counsel of his choice; give truthful and accurate information and testimony and not assert any evidentiary or other privilege, other than the attorney-client and work product privileges; and in the event of his failure to testify truthfully or to comply with the above requirements, be subject to contempt proceedings, charges of perjury and/or charges of obstruction of justice.
By the Commission.
Jonathan G. Katz
|1||Rule 102(e)(3) of the Commission's Rules of Practice, 17 C.F.R. 201.102(e)(3), provides, in pertinent part: The Commission, with due regard to the public interest ... may ... suspend from appearing or practicing before it any attorney ... who ... has been by name ... permanently enjoined by any court of competent jurisdiction, by reason of his or her misconduct in an action brought by the Commission, from violating or aiding and abetting the violation of any provision of the Federal securities laws or of the rules and regulations thereunder. ... A person who has consented to the entry of a permanent injunction ... without admitting the facts set forth in the complaint shall be presumed for all purposes under this paragraph (e)(3) to have been enjoined by reason of the misconduct alleged in the complaint.|
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