UNITED STATES OF AMERICA
|Order Instituting a Proceeding,
Making Findings and Imposing
Remedial Sanctions Pursuant to
Sections 15(b)(6), 15B(c)(4) and
19(h)(3) of the Securities Exchange
Act of 1934
The Commission deems it appropriate and in the public interest to institute public administrative proceedings pursuant to Sections 15(b)(6), 15B(c)(4) and 19(h)(3) of the Securities Exchange Act of 1934 ("Exchange Act") [15 U.S.C. §§ 78o(b)(6), 78o-4(c)(4) and 78s(h)(3)] to determine what action, if any, is necessary in light of the entry of a permanent injunction against Paschal Gene Allen on November 30, 1999, by the United States District Court for the Northern District of Georgia.
In anticipation of the institution of these proceedings, Allen 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 to which the Commission is a party, and without admitting or denying the findings or conclusions contained herein, except for those contained in Sections III.A., B. and C., which are admitted, Allen consents to the issuance of this Order, the entry of the findings contained herein, and the imposition of the sanction set forth below.
The Commission finds that:
A. From September 1990 through early August 1997, Allen was associated with Stephens Inc. ("Stephens"), a broker-dealer and municipal securities dealer registered with the Commission pursuant to Sections 15 and 15B(a) of the Exchange Act.
B. Allen is permanently enjoined by judgment of the United States District Court for the Northern District of Georgia, in the action styled Securities and Exchange Commission v. P. Gene Allen ("SEC v. Allen"), Civil Action No. 1 99-CV-2987-MHS (N.D. Ga., judgment entered November 30, 1999), from violating Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, and Section 15B(c)(1) of the Exchange Act and Rule G-17 of the Municipal Securities Rulemaking Board ("MSRB").
C. With respect to Allen, the Commission's complaint in SEC v. Allen alleges as follows: While serving as a public finance banker in the Atlanta office of Stephens, Allen: (i) took undisclosed payments in connection with a securities transaction he recommended to his financial advisory client, Fulton County, Georgia; and (ii) took undisclosed compensation from underwriter's counsel in connection with five municipal securities offerings by various Georgia municipalities. The complaint further alleges that Allen's failure to disclose the payments he received violated Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5]. In addition, the complaint alleges that in the five municipal offerings, Allen's failure to disclose his compensation arrangement with underwriter's counsel, and his failure to include his compensation from underwriter's counsel in the offering documents, violated Section 15B(c)(1) of the Exchange Act [15 U.S.C. § 78o-4(c)(1)] and MSRB Rule G-17.
Based on the foregoing, the Commission deems it appropriate and in the public interest to impose the sanctions that are specified in Allen's Offer.
Accordingly, it is hereby ordered that, effective immediately, Allen be, and he hereby is, barred from association with any broker, dealer, or municipal securities dealer.
By the Commission.
Jonathan G. Katz
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