UNITED STATES OF AMERICA
In the Matter of
RONALD K. MAHABIR,
ORDER INSTITUTING ADMINISTRATIVE PROCEEDINGS PURSUANT TO SECTIONS 15(b)(6) AND 15B(c)(4) OF THE SECURITIES EXCHANGE ACT OF 1934, MAKING FINDINGS AND IMPOSING SANCTIONS
The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest that administrative proceedings be instituted pursuant to Sections 15(b)(6) and 15B(c)(4) of the Securities Exchange Act of 1934 ("Exchange Act") against Ronald K. Mahabir ("Mahabir").
In anticipation of these proceedings, Mahabir has submitted an Offer of Settlement ("Offer") to the Commission, 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 in which the Commission is a party, and without admitting or denying the findings herein, except that Mahabir admits the jurisdiction of the Commission over him and over the subject matter of these proceedings and the entry of the Final Judgment of Permanent Injunction and Other Relief as to Defendant Ronald K. Mahabir, as set forth in Section III.D, Mahabir consents to the entry of this Order Instituting Administrative Proceedings Pursuant to Sections 15(b)(6) and 15B(c)(4) of the Securities Exchange Act of 1934, Making Findings and Imposing Sanctions ("Order") and to the entry of the findings and sanctions set forth below.
Accordingly, IT IS HEREBY ORDERED that the said administrative proceedings against Mahabir be, and hereby are, instituted.
The Commission makes the following findings:
A. Between July 8, 1996 and February 2, 1999, Mahabir was associated with Morgan Stanley & Company ("Morgan Stanley"), a broker-dealer and municipal securities dealer registered with the Commission.
B. On March 7, 2002, the Commission filed a complaint in the United States District Court for the Southern District of New York, in an action captioned Securities and Exchange Commission v. Ronald K. Mahabir, et al., 02 Civ. 1809 (BSJ) (S.D.N.Y.), alleging, among other things, that Mahabir engaged in insider trading in violation of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder in connection with transactions in the securities of PerSeptive Biosystems, Inc. ("PerSeptive"), Barnett Banks, Inc. ("Barnett"), and Beacon Properties Corporation ("Beacon").
C. The Commission's complaint specifically alleged that while he was an analyst at Morgan Stanley, Mahabir provided John and James Panagotacos ("the Panagotacoses") material nonpublic information concerning merger transactions involving PerSeptive, Barnett and Beacon. The complaint also alleged that Mahabir provided material nonpublic information concerning the Barnett transaction to a former Morgan Stanley analyst ("Former Analyst"). The complaint further alleged that the Former Analyst purchased securities of Barnett, the Panagotacoses purchased securities of Barnett and Beacon, and James Panagotacos also purchased securities of PerSeptive, while each was in possession of material nonpublic information that had been provided to them by Mahabir. Mahabir knew or was reckless in not knowing the information he disclosed was nonpublic and that his disclosure of the information was improper and in breach of duties he owed. As a result of the trades made while in possession of material nonpublic information obtained from Mahabir, the Panagotacoses realized illegal profits of $157,444 and the Former Analyst realized $19,197 in illegal profits.
D. On June 28, 2002, the Judgment of Permanent Injunction and Other Relief as to Defendant Ronald K. Mahabir ("Final Judgment") was entered by the United States District Court for the Southern District of New York. Among other things, the Final Judgment permanently enjoins Mahabir from violating Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. The Final Judgment also orders Mahabir to pay a civil monetary penalty in the amount of $264,961.50.
Based on the foregoing, the Commission deems it appropriate and in the public interest to impose the following sanction specified in Mahabir's Offer.
ACCORDINGLY, IT IS ORDERED that Mahabir be, and hereby is, barred from association with any broker, dealer or municipal securities dealer.
By the Commission.
Jonathan G. Katz
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