UNITED STATES OF AMERICA Before the SECURITIES AND EXCHANGE COMMISSION
SECURITIES EXCHANGE ACT OF 1934
INVESTMENT ADVISERS ACT OF 1940
The Securities and Exchange Commission ("Commission") deems it appropriate in the public interest and for the protection of investors that public administrative proceedings be instituted against Respondent Todd Hansen ("Respondent Hansen") pursuant to Sections 15(b) and 19(h) of the Securities Exchange Act of 1934 ("Exchange Act") and Section 203(f) of the Investment Advisers Act of 1940 ("Advisers Act").
In anticipation of the institution of these proceedings, Respondent Hansen has submitted an Offer of Settlement ("Hansen 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 Commission's findings contained herein, except as to jurisdiction and the facts set forth in Paragraphs III(B)-(D) below, which are admitted, Respondent Hansen consents to the entry of this Order Instituting Proceedings, Making Findings and Imposing Remedial Sanctions pursuant to Sections 15(b) and 19(h) of the Exchange Act and Section 203(f) of the Advisers Act ("Order") and the imposition of sanctions as set forth below.
Accordingly, IT IS HEREBY ORDERED THAT proceedings pursuant to Sections 15(b) and 19(h) of the Exchange Act and Section 203(f) of the Advisers Act be, and hereby are, instituted.
On the basis of this Order and the Offer submitted by Respondent Hansen, the Commission finds that:1
A. From approximately December 1996 through May 1997, Respondent Hansen was employed by Pavilion Securities Corporation ("Pavilion Securities") which: (1) was a broker-dealer registered with the Commission; and (2) as described below, acted as an investment adviser to Pavilion LP, a partnership they created.
B. On April 7, 1993, Respondent Hansen was convicted of felony theft and felony violation of the Illinois Securities Law of 1953 in People of the State of Illinois v. Todd Hansen (Case No. 92 CF 519) in the Circuit Court of the Eighteenth Judicial Circuit in the State of Illinois, County of DuPage and was sentenced to four years periodic imprisonment, payment of $2 million in restitution and 30 months of probation.
C. On December 22, 1994, Respondent Hansen pled guilty to felony mail fraud in United States v. Todd Hansen (Case No. 94 CR 306-2) in the United States District Court for the Northern District of Illinois and was sentenced to 2 years in prison and three years of supervised release upon release from imprisonment. On January 16, 1998, Respondent Hansen admitted to being guilty of violating the conditions of his supervised release and was committed to the United States Bureau of Prisons to be imprisoned for one year.
D. On September 22, 2000, in the case of SEC v. Hansen et al., (Case No. 99 C 6386), the Honorable Milton I. Shadur, Senior United States District Judge for the Northern District of Illinois, entered a Final Judgment and Order of Permanent Injunction and Other Equitable Relief against Respondent Hansen ("Hansen Final Judgment"), pursuant to his consent but without admitting or denying the allegations in the Commission's Complaint except as to jurisdiction. The Hansen Final Judgment enjoined Respondent Hansen from violating Section 17(a) of the Securities Act of 1933 ("Securities Act"), Section 10(b) of the Exchange Act and Rule 10b-5 thereunder and from aiding and abetting violations of Section 15(b)(7) of the Exchange Act and Rule 15b7-1 thereunder.
E. The Complaint alleged that between December 1996 and May 1997: (1) Respondent Hansen and another Pavilion Securities employee raised more than $660,000 through the sale of limited partnership interests in Pavilion LP, a partnership they created, to eight investors (the "Investors"); (2) Respondent Hansen told the Investors that their funds would be used to trade stocks, options and futures on various exchanges; (3) Pavilion Securities was the general partner of Pavilion LP and was responsible for determining how the Investors' money was utilized; (4) in connection with the offer, purchase and sale of the limited partnership interests, Respondent Hansen made material misrepresentations and omitted to state material facts to Investors regarding his criminal background, his employment status with Pavilion Securities, the use of Investor funds and the performance of the investments; (5) Respondent Hansen effected transactions in and induced the purchase and sale of securities while not registered with the Commission nor approved in accordance with the training, experience, competence and other qualification standards of the Commission or of a national securities exchange or association; and (6) Respondent Hansen aided and abetted Pavilion Securities' utilization of an unregistered person to effect transactions in and induce the purchase and sale of securities.
In light of the foregoing, the Commission finds that it is in the public interest and for the protection of investors to impose the sanctions specified in the Hansen Offer.
ACCORDINGLY, IT IS HEREBY ORDERED THAT Todd Hansen be, and hereby is, barred from association with any broker, dealer or investment adviser.
By the Commission.
Jonathan G. Katz
1 The findings herein are not binding on anyone other than Respondent Hansen.