UNITED STATES OF AMERICA
SECURITIES AND EXCHANGE COMMISSION
SECURITIES EXCHANGE ACT OF 1934
Release No. 45776 / April 18, 2002
File No. 3-10758
In the Matter of
H. DALTON DAVLIN,
| ORDER INSTITUTING PUBLIC
PROCEEDINGS PURSUANT TO
SECTION 15(b)(6) OF THE
SECURITIES EXCHANGE ACT
OF 1934, MAKING FINDINGS AND
IMPOSING REMEDIAL SANCTIONS|
The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest that public administrative proceedings pursuant to Section 15(b)(6) of the Securities Exchange Act of 1934 ("Exchange Act") be, and hereby are, instituted against H. Dalton Davlin ("Davlin"or "Respondent").
In anticipation of the institution of these proceedings, the Respondent has submitted an Offer of Settlement, 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 to which the Commission is a party, the Respondent admits the findings set forth herein and admits to the jurisdiction of the Commission over the Respondent and over the subject matter of these proceedings, and consents to the entry of this Order Instituting Public Proceedings Pursuant to Section 15(b)(6) of the Securities Exchange Act of 1934, Making Findings and Imposing Remedial Sanctions ("Order").
Based on this Order and the Respondent's Offer, the Commission finds the following:
- Davlin was associated as a registered representative in the Charlotte, North Carolina office of Interstate Johnson/Lane, a registered broker-dealer, from in or about September 1993 to October 1995, and in the Washington, D.C. office of Capital Resources, Inc., a registered broker-dealer, from in or about December 1995 to April 1996.
- On November 1, 2001, an Order of Permanent Injunction And Other Relief was entered against Davlin by the United States District Court for the Western District of North Carolina in the case of Securities and Exchange Commission v. James A. Nies, Jeffrey Dene Leader and Harold Dalton Davlin, Civil Action No. 3:00-CV-465-MU (W.D.N.C.), permanently enjoining him from aiding and abetting violations of Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder. The Order of Permanent Injunction and Other Relief directed Davlin to pay disgorgement in the amount $17,072 plus prejudgment interest thereon, but waived prejudgment interest and did not impose a civil penalty, based upon Davlin's demonstrated inability to pay in excess of $17,072. Davlin consented to the entry of the Order of Permanent Injunction without admitting or denying the allegations contained in the Commission's complaint.
- The Commission's complaint alleged that during the period from in or about early 1995 to in or about early 1997, Davlin aided and abetted others in engaging in acts, practices and courses of business which operated as a fraud and deceit upon at least 17 mutual thrift banks and their account holders. Specifically, the complaint alleged that Davlin aided and abetted others in defrauding Catskill Financial Corporation ("Catskill"), and several other mutual thrift banks in various states, through a fraudulent scheme in which others, aided and abetted by Davlin, orchestrated the purchase of stock issued by the banks as part of the banks' conversion from mutually owned thrifts to publicly traded companies. The complaint further alleged that others, aided and abetted by Davlin, purchased the conversion stock by submitting Stock Order Forms to the converting thrifts in the names of eligible thrift depositors, which did not disclose the fact that Davlin, or other ineligible persons, were funding the stock purchase and would retain sole discretion to sell the stock, violating federal and state banking regulations. The complaint alleged that Davlin thereby aided and abetted violations of Section 10(b) of the Exchange Act and Rule 10b-5.
In view of the foregoing, it is in the public interest to impose the sanctions specified in the Offer. Accordingly IT IS HEREBY ORDERED that Davlin be, and hereby is, barred from association with any broker or dealer.
By the Commission.
Jonathan G. Katz