UNITED STATES OF AMERICA
SECURITIES EXCHANGE ACT OF 1934
The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest that public administrative proceedings be instituted pursuant to Section 15(b) of the Securities Exchange Act of 1934 ("Exchange Act"), against John Romano ("Romano"). Accordingly, it is hereby ordered that proceedings pursuant to Section 15(b) of the Exchange Act be, and hereby are, instituted.
In anticipation of the institution of these public administrative proceedings, Romano has submitted an Offer of Settlement ("Offer"), which the Commission has determined to accept. Solely for the purposes of these proceedings, and any other proceeding brought by or on behalf of the Commission, or in which the Commission is a party, and without admitting or denying the findings contained herein1 except with respect to service and jurisdiction over Romano and over the subject matter of these proceedings and the entry of the injunction set forth in paragraph III.B. below, which are admitted, Romano consents to the entry of the findings and the imposition of the sanction set forth herein.
On the basis of this Order and the Offer submitted by Romano, the Commission finds that:
A. Romano, age 39, was employed from March 1989 until August 1992 as a trader and registered representative at Castle Securities Corp. ("Castle"), a broker-dealer registered with the Commission pursuant to Section 15(b) of the Exchange Act.
B. On April 12, 2001, the United States District Court for the Southern District of New York, in an action captioned SEC v. U.S. Environmental, Inc., et al., 94 Civ. 6608 (PKL) (AJP) ("Injunctive Action"), permanently enjoined Romano from violating Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 ("Securities Act"), and Section 10(b) of the Exchange Act and Rule 10b-5 and Section 101 of Regulation M and Rules 101 and 102 thereunder. The Court entered the injunction pursuant to Romano's offer of settlement to the Commission, in which Romano neither admitted or denied the allegations in the Commission's Amended Complaint, dated October 20, 1995 ("Amended Complaint"). In addition, pursuant to that settlement offer, the Court further ordered Romano to pay disgorgement of gains and prejudgment interest totaling $43,776.
C. The Commission's Amended Complaint in the Injunctive Action alleges, in relevant part, that Romano, as well as other defendants, manipulated the price of shares of common stock of U.S. Environmental, Inc. ("USE"), from $.05 to over $5.00 per share during the period from September through December 1989. The Amended Complaint alleges that, during that period, Castle was the principal market maker, and Romano was the principal trader, of USE securities. The Amended Complaint further alleges that as directed by defendant Mark D'Onofrio and other defendants ("the D'Onofrio Group"), Castle and Romano executed wash trades and matched orders while trading USE securities. The Amended Complaint further alleges that the D'Onofrio Group provided Castle and Romano with guaranteed trading profits.
D. By offering and selling USE securities, Romano participated in an offering of penny stock.
In view of the foregoing, it is in the public interest to impose the sanction specified in the Offer of Settlement. Accordingly, IT IS HEREBY ORDERED that Romano be, and hereby is, barred from participating in any offering of a penny stock, including: acting as a promoter,
finder, consultant, agent, or other person who engages in activities with a broker, dealer or issuer for purposes of the issuance or trading in any penny stock; or inducing or attempting to induce the purchase or sale of any penny stock.
By the Commission.
1 Any findings contained herein are solely for the purpose of these proceedings and are not binding on any other person or entity named as a respondent in any other proceeding.