Securities Exchange Act of 1934
Release No. 44805 / September 17, 2001
Investment Advisers Act of 1940
Release No. 1975 / September 17, 2001
Administrative Proceeding
File No. 3-10575
In the Matter of Charles F. Morgan, Respondent. |
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ORDER INSTITUTING PUBLIC ADMINISTRATIVE PROCEEDINGS PURSUANT TO SECTIONS 15(b) AND 19(h) OF THE SECURITIES EXCHANGE ACT OF 1934 AND SECTION 203(f) OF THE INVESTMENT ADVISERS ACT OF 1940, MAKING FINDINGS AND IMPOSING REMEDIAL SANCTIONS |
I.
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 Charles F. Morgan ("Respondent") 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 has submitted an Offer of Settlement ("Offer") which the Commission has determined to accept. Solely for the purpose 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 any of the findings contained herein, except as to the jurisdiction of the Commission over him and over the subject matter of these proceedings, and as to the findings contained in Section II.1., below, and the entry of the injunction set forth in Section II.4., below, which are admitted, Respondent consents to the entry by the Commission of this Order Instituting Public Administrative Proceedings Pursuant to Sections 15(b) and 19(h) of the Securities Exchange Act of 1934 and Section 203(f) of the Investment Advisers Act of 1940, Making Findings and Imposing Remedial Sanctions ("Order").
Accordingly, IT IS HEREBY ORDERED that proceedings against Respondent be and hereby are instituted.
II.
On the basis of this Order and the Offer, the Commission finds that:
- From September 1985 to August 2000, Respondent was associated with broker-dealers and investment advisers registered as such with the Commission.
- On September 4, 2001, the Commission filed a complaint in the United States District Court for the Middle District of Florida, SEC v. Morgan Financial Services, Inc. and Charles F. Morgan, Civil Action No. 01-CV-1667 (the "Complaint") naming Respondent as a defendant in addition to Respondent's company, Morgan Financial Services, Inc. ("MFS"). The Complaint charged Respondent with violations of the registration and antifraud provisions of the federal securities laws.
- The Commission alleged in its Complaint, among other things, that MFS was incorporated pursuant to Florida law on April 1, 1986, and that Respondent was the sole owner and president of MFS from its inception to the present. The Commission further alleged that, from 1991 through 2000, Respondent raised approximately $2.4 million from 17 investors both within and outside of Florida by making material misrepresentations concerning, among other things, the safety of and guaranteed return on the investment. Contrary to his representations, Respondent misappropriated some of the investor funds, used some of the funds to make interest or principal payments to earlier investors, and used the funds for other purposes inconsistent with his representations. The Commission's Complaint also alleged that to conceal his misuse of the funds, Respondent provided the investors with monthly MFS account statements falsely reflecting the value of each investor's MFS investment. The Commission also alleged that there was no registration statement pursuant to the Securities Act of 1933 ("Securities Act") filed or in effect with the Commission regarding the MFS investments or the offer and sale of the MFS investments.
- On June 25, 2001, without admitting or denying any of the allegations in the Commission's Complaint, except as to jurisdiction and venue, Respondent consented to the entry of a final judgment of permanent injunction and other relief. On September 12, 2001, the Court permanently enjoined Respondent from future violations of Sections 5(a), 5(c) and 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder.
III.
Based on the foregoing, the Commission deems it appropriate, in the public interest, and for the protection of investors to accept the Offer submitted by Respondent, and accordingly,
IT IS HEREBY ORDERED that:
Respondent Charles F. Morgan be, and hereby is barred from association with any broker, dealer or investment adviser.
By the Commission.
Jonathan G. Katz
Secretary
Service List
Rule 141 of the Commission's Rules of Practice provides that the Secretary, or another duly authorized officer of the Commission, shall give a copy of the Order Instituting Public Administrative Proceedings Pursuant to Sections 15(b) and 19(h) of the Securities Exchange Act of 1934 and Section 203(f) of the Investment Advisers Act of 1940, Making Findings and Imposing Remedial Sanctions to each person named as a party in the order and their legal agent.
The attached Order Instituting Public Administrative Proceedings Pursuant to Sections 15(b) and 19(h) of the Securities Exchange Act of 1934 and Section 203(f) of the Investment Advisers Act of 1940, Making Findings and Imposing Remedial Sanctions, has been sent to the following parties and other persons entitled to notice:
Chief Administrative Law Judge Brenda Murray
Office of Administrative Law Judges
Securities and Exchange Commission
450 5th Street, N.W.
Washington, D.C. 20549-1106
Nancy E. Allin, Esq.
Office of Chief Counsel
Division of Enforcement
Securities and Exchange Commission
450 5th Street, N.W.
Washington, D.C. 20549-0809
Miriam Lefkowitz, Esq.
Securities and Exchange Commission
Southeast Regional Office
1401 Brickell Avenue, Suite 200
Miami, Florida 33131
Edwin B. Kagan, Esq.
Edwin B. Kagan, P.A.
2709 Rocky Point Drive
Suite 102
Tampa, FL 33607
Counsel for Respondent Charles F. Morgan
Charles F. Morgan
C/o Frances Raspe
9032 Nautilus Drive
Tampa, FL 33635
Edwin B. Kagan, Esq.
Edwin B. Kagan, P.A.
2709 Rocky Point Drive
Suite 102
Tampa, FL 33607
Re: Charles F. Morgan
Dear Mr. Kagan:
Enclosed please find an Order Instituting Public Administrative Proceedings Pursuant to Sections 15(b) and 19(h) of the Securities Exchange Act of 1934 and Section 203(f) of the Investment Advisers Act of 1940, Making Findings And Imposing Remedial Sanctions ("Order"). The findings and remedial sanctions are in accordance with the Offer of Settlement dated, __________, 2001, which your client Charles F. Morgan submitted to the Commission and which the Commission determined to accept. The sanctions imposed by the enclosed Order shall become effective immediately.
If you have any questions or wish to discuss any aspect of the proceedings, you may contact Miriam Lefkowitz of the Commission's Southeast Regional Office, 1401 Brickell Avenue, Suite 200, Miami, Florida 33131, at (305) 982-6369.
Sincerely,
Jonathan G. Katz
Secretary
Enclosure
Charles F. Morgan
C/o Frances Raspe
9032 Nautilus Drive
Tampa, FL 33635
Re: Charles F. Morgan
Dear Mr. Morgan:
Enclosed please find an Order Instituting Public Administrative Proceedings Pursuant to Sections 15(b) and 19(h) of the Securities Exchange Act of 1934 and Section 203(f) of the Investment Advisers Act of 1940, Making Findings And Imposing Remedial Sanctions ("Order"). The findings and remedial sanctions are in accordance with the Offer of Settlement dated, __________, 2001, which you submitted to the Commission and which the Commission determined to accept. The sanctions imposed by the enclosed Order shall become effective immediately.
If you have any questions or wish to discuss any aspect of the proceedings, you may contact Miriam Lefkowitz of the Commission's Southeast Regional Office, 1401 Brickell Avenue, Suite 200, Miami, Florida 33131, at (305) 982-6369.
Sincerely,
Jonathan G. Katz
Secretary
Enclosure