UNITED STATES OF AMERICA
|In the Matter of||:|
|: ORDER MAKING FINDINGS AND|
|BRAD HADDY,||: IMPOSING SANCTIONS BY DEFAULT|
|and RONALD D. SPENCER||: AGAINST RONALD D. SPENCER|
The Securities and Exchange Commission (Commission) instituted this proceeding, pursuant to Sections 15(b) and 19(h) of the Securities Exchange Act of 1934 (Exchange Act), on December 27, 1999, with an Order Instituting Proceedings (OIP). Respondent Spencer was served with the OIP on January 26, 2000. By the terms of the OIP and Rule 220(b) of the Commission's Rules of Practice, 17 C.F.R. § 201.220(b), Spencer's Answer was due in twenty days, that is, February 15. The Commission did not receive an Answer or any other correspondence from him. Nor did he appear at the March 22 prehearing conference, of which he had been notified by my February 8 Order Postponing Hearing and Scheduling Prehearing Conference.
On March 15 the Division of Enforcement (Division) filed, pursuant to Rule 155(a), a Motion for Entry of a Default Order as to Spencer. The Division requests that Spencer be barred from association with any broker or dealer, or member of any national securities exchange or registered securities association. Spencer did not respond to the Division's Motion.
Pursuant to Rules 155(a)(1) and (2) and 220(f), a respondent who fails to file an Answer to the OIP, to appear at a prehearing conference of which he has been notified, to respond to a dispositive motion, or otherwise to defend the proceeding may be deemed to be in default. The administrative law judge may determine the proceeding against him upon consideration of the record, including the OIP, the allegations of which may be deemed to be true. On March 22 I ordered Spencer to show cause, by March 29, why he should not be held in default and why I should not impose the sanction requested by the Division on him. No Answer, correspondence, or any other pleading was received from Spencer.
Respondent Spencer is in default within the meaning of Rule 155(a). He failed to answer the OIP, appear at the prehearing conference, respond to a dispositive motion, or otherwise defend the proceeding. See Rules 155(a)(1) and (2) and 220(f). Accordingly I find that the allegations in the OIP are true.
FINDINGS OF FACT
Spencer was associated as a trader with Sheffield Securities, Inc. (Sheffield Securities) from September 1986 to March 1989. Sheffield Securities, a now defunct broker-dealer, which was located in Fort Lauderdale, Florida, was registered with the Commission from June 1985 through June 1989.
On April 20, 1990, in the United States District Court for the District of New Jersey, Spencer pleaded guilty to one felony count under 18 U.S.C. § 371 for conspiracy to commit securities fraud. On December 23, 1996, the court entered a judgment of conviction and sentenced him to two years probation, four months in a community corrections center, and 240 hours of community service, and ordered him to pay a special assessment of $50. United States v. Spencer, Cr. 90-177(01) (D.N.J. 1996) (JWB).
The Criminal Information to which Spencer pleaded guilty charged, among other things, that from approximately January 1988 to March 1989, while he was associated with Sheffield Securities, Spencer participated in a manipulation scheme and engaged in fraudulent trading practices in furtherance of that scheme. The scheme was designed to artificially raise the prices of various securities, including three penny stocks: Vista Capital Corp. (Vista), Bellatrix Corp. (Bellatrix), and Castleton Investors Corp. (Castleton). Through the use of various manipulative devices, Spencer and his co-conspirators generated demand for these securities and then sold the securities at profits determined, at least in part, by the manipulation. In furtherance of the conspiracy, Spencer, at the direction of his co-conspirators: (1) conspired to trade the securities of Vista, Bellatrix, and Castleton in a manner designed to conceal the illegal manipulation of these securities; and (2) conspired to engage, through Sheffield Securities, in various fraudulent trading practices, including matched orders, parking stock, and using nominee accounts.
CONCLUSIONS OF LAW
Spencer has been convicted, within ten years of the commencement of this proceeding, of a felony that "involves the purchase or sale of any security" within the meaning of Sections 15(b)(4)(B) and (6)(A)(ii) of the Exchange Act. His unlawful conduct was recurring and egregious. There are no mitigating circumstances. The sanction requested by the Division, a bar from association with any broker or dealer, or member of any national securities exchange or registered securities association, will serve the public interest and the protection of investors, pursuant to Sections 15(b)(6) and 19(h) of the Exchange Act.
IT IS ORDERED that Ronald D. Spencer IS BARRED from association with any broker or dealer, or member of any national securities exchange or registered securities association.
Carol Fox Foelak
Administrative Law Judge
|Home | Previous Page||