UNITED STATES OF AMERICA
In the Matter of
|ORDER INSTITUTING PROCEEDINGS
PURSUANT TO SECTION 15(b)(6) OF THE
SECURITIES EXCHANGE ACT OF 1934,
MAKING FINDINGS AND IMPOSING
The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest that public administrative proceedings be and hereby are instituted pursuant to Section 15(b)(6) of the Securities Exchange Act of 1934 ("Exchange Act"), against Shan Michael Hefley ("Hefley").
In anticipation of the institution of these proceedings, Hefley has submitted an Offer of Settlement to the Commission that 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, 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 the findings contained herein, except as to entry of the injunction described below and the jurisdiction of the Commission over him in this matter as set forth in paragraphs II.A and II.B, which are admitted, Hefley consents to the institution of public administrative proceedings, and the findings and remedial sanctions set forth below.
On the basis of this Order and the Offer of Settlement submitted by Hefley, the Commission finds that:
A. From November 1984 through February 1999, Hefley was associated as a registered representative with Edward D. Jones & Co., L.P. a broker-dealer registered with the Commission and a member of the National Association of Securities Dealers, Inc. During that period, Hefley managed the Edward Jones branch office in Bowie, Texas.
B. On March 23, 2000, Hefley was permanently enjoined from violations of Section 17(a) of the Securities Act of 1933 ("Securities Act") and Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder, by the United States District Court for the Northern District of Texas (Dallas Division) [SEC v. Shan Michael Hefley, Civil Action No. 7:00CV-048-R]. Hefley consented to the entry of the permanent injunction without admitting or denying any violation of the federal securities laws, as alleged in the Commission's Complaint.
C. The Commission's Complaint in SEC v. Hefley alleges that Hefley, engaged in a scheme to misappropriate customer funds. The Complaint alleges that Hefley requested disbursements from elderly customers' money market accounts at Edward Jones, mutual fund, or life insurance annuity accounts. The Complaint further alleges that Hefley authorized the checks from those disbursements be sent to the Edward Jones branch office in Bowie, Texas. The Complaint states that upon receiving the customers' checks, Hefley deposited the funds into his own Edward Jones money market account or a family members' money market account under his control. The Complaint alleges that Hefley then used the misappropriated customers' funds for his own personal expenses.
D. As a result of the conduct described in the Commission's Complaint referenced in paragraph II.C. above, Hefley willfully violated Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder.
In view of the foregoing, the Commission deems it appropriate and in the public interest to accept Hefley's Offer of Settlement.
Accordingly, IT IS ORDERED that Shan Michael Hefley be, and hereby is, barred from association with any broker or dealer.
By the Commission.
Jonathan G. Katz
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