UNITED STATES OF AMERICA
|In the Matter of||:|
|: ORDER INSTITUTING|
|THOMAS GAETON SCALZO, JR.||: ADMINISTRATIVE|
|: PROCEEDINGS, MAKING|
|Respondent.||: FINDINGS, AND IMPOSING|
|: REMEDIAL SANCTIONS|
The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest to institute a public administrative proceeding pursuant to Sections 15(b) and 19(h) of the Securities Exchange Act of 1934 (the "Exchange Act") against Thomas Gaeton Scalzo, Jr. ("Scalzo" or "Respondent").
In anticipation of the institution of these proceedings, Scalzo has submitted an Offer of Settlement ("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. Without admitting or denying the findings contained herein, except that Scalzo admits the jurisdiction of the Commission over him and over the subject matter of these proceedings, and further admits the entry of the injunction as set forth in Section II.B. below, Scalzo consents to the issuance of this Order Instituting Administrative Proceedings, Making Findings, and Imposing Remedial Sanctions ("Order").
Accordingly, IT IS ORDERED that a proceeding pursuant to Sections 15(b) and 19(h) of the Exchange Act be, and hereby is, instituted.
On the basis of this Order and the Offer, the Commission makes the following findings:1
A. Scalzo, age 50, is a resident of Loma Linda, California. Scalzo has been employed in the securities industry for approximately seventeen years and has obtained Series 7 and 24 securities licenses. Most recently, from at least January 1998 to April 1998, Scalzo was associated with two registered broker-dealers.
B. On October 25, 1999, a Final Judgment of Permanent Injunction And Other Relief was entered against Scalzo by the United States District Court for the Northern District of California in the case entitled Securities and Exchange Commission v. Edward A. Durante, et al., Civil Action No. C 99-3690 SBA (N.D. Cal.) ("Final Judgment"). The Final Judgment, which was entered pursuant to Scalzo's consent, permanently enjoins Scalzo from violations of Sections 15(a) and 10(b) of the Exchange Act and Rule 10b-5 thereunder.
C. The Commission's Complaint in the civil action alleged that, from approximately January 1998 through August 1998, Scalzo knowingly or recklessly allowed and assisted First New Haven Corporation ("FNH"), a corporation of which he was a sole owner, to be used by a group of stock promoters to sell unregistered shares of a microcap stock, PSA, Inc. ("PSA") to investors using false statements and material omissions. In so doing, Scalzo willfully aided and abetted violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder.
D. The Complaint further alleged that, from approximately January 1998 through August 1998, Scalzo allowed and assisted the stock promoters to use FNH to effect transactions in, or induce or attempt to induce the purchase and sale of, PSA securities without registering FNH with the Commission as a broker-dealer. In so doing, Scalzo willfully aided and abetted violations of Section 15(a) of the Exchange Act.
In view of the foregoing, the Commission deems it appropriate and in the public interest to impose the sanction specified by Scalzo in the Offer.
Accordingly, IT IS ORDERED, that:
Scalzo be, and hereby is, suspended from association with any broker or dealer for a period of twelve months from the date of the entry of this Order.
By the Commission.
Jonathan G. Katz
1 The findings herein are made pursuant to Respondent's Offer of Settlement and are not binding on any other person or entity in this or any other proceeding.
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