UNITED STATES OF AMERICA
In the Matter of
THOMAS A. CAREY
ORDER ENTERING DEFAULT, MAKING FINDINGS, AND IMPOSING REMEDIAL SANCTION AGAINST RESPONDENT THOMAS A. CAREY
The Securities and Exchange Commission (Commission) issued its Order Instituting Proceedings (OIP) on September 28, 2001. On December 6, 2001, the Division of Enforcement (Division) filed a Motion for Default Judgment (Motion), requesting I conclude that the allegations set forth in the OIP are true and impose a bar from association with any broker or dealer against Respondents.
In its Motion, the Division notes that Respondents' counsel was served with the OIP on October 5, 2001, but no answers had been filed in accordance with Rule 220 of the Commission's Rules of Practice, 17 C.F.R. § 201.220. In a prehearing conference held on December 10, 2001, Respondents' counsel indicated that no answers had been filed because Respondents were negotiating settlements with the Division (Prehearing Conference of December 10, 2001, at Tr. 3). Respondents had all the necessary settlement paperwork in-hand by mid-October, and Respondents' counsel indicated that if Respondents had not executed and returned the settlement documents by December 14, 2001, she would not oppose a default (Prehearing Conference of December 10, 2001, at Tr. 6). On January 24, 2002, the Division filed a status report stating that it had received an executed offer of settlement from Marsella, and had forwarded that settlement offer to the Commission with a favorable recommendation.1 It also disclosed that it had received no executed offer of settlement from Carey.
As provided by Rules 155(a)(2) and 220(f) of the Commission's Rules of Practice, 17 C.F.R. §§ 201.155(a)(2), .220(f), Carey is in default because he has failed to answer the OIP and because he has failed to respond to a dispositive motion.
Accordingly, I find that the allegations in the OIP are true:
From August 1992 to August 1993, Carey was associated as a registered representative of Cohig & Associates (Cohig), a broker-dealer registered with the Commission. On September 14, 1999, Carey pled guilty to one count of an indictment charging him with conspiracy to commit securities fraud and wire fraud. See United States v. Carey, No. 99CR-1514-JM (S.D. Cal.).
In his plea agreement, Carey admitted that, while associated with Cohig, he received extraordinary compensation, above and beyond his normal commission, in return for retailing the stock of Eagle Holdings, Inc. (Eagle) to his customers. Carey admitted that he failed to disclose this extraordinary compensation to investors. Carey further admitted that trade confirmations sent to Cohig customers who purchased Eagle stock were misleading in that the confirmations did not disclose the total compensation Carey would receive for recommending Eagle stock to the customers.
On April 4, 2000, based upon his guilty plea, Carey was convicted of conspiracy to commit securities fraud and wire fraud.
In view of the foregoing, and pursuant to Sections 15(b) and 19(h) of the Securities Exchange Act of 1934, I find it in the public interest and for the protection of investors to order that Carey be barred from association with any broker or dealer.
Accordingly, I GRANT the Division's Motion for Default Judgment as to Respondent Thomas A. Carey and ORDER that Carey be, and hereby is, barred from association with any broker or dealer.
James T. Kelly
Administrative Law Judge
|1||The Commission approved Respondent Marsella's settlement offer, and entered an Order Making Findings and Imposing Remedial Sanctions Against Respondent Frank Marsella on January 29, 2002. See Exchange Act Rel. No. 45356 (Jan. 29, 2002).|
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