UNITED STATES OF AMERICA
In the Matter of
|ORDER INSTITUTING PUBLIC ADMINISTRATIVE 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 be, and hereby are, instituted pursuant to Section 15(b)(6) of the Securities Exchange Act of 1934 ("Exchange Act") against Respondent Michael Nicolaou ("Nicolaou" or "Respondent").
In anticipation of the institution of these public administrative 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 proceedings brought by or on behalf of the Commission or in which the Commission is a party, and without admitting or denying the findings, except as to the Commission's jurisdiction over him and over the subject matter of these proceedings and as to paragraphs III.A. and III.B. below, which Respondent admits, Respondent consents to the entry of this Order Instituting Public Administrative Proceedings Pursuant to Section 15(b)(6) of the Securities Exchange Act of 1934, Making Findings and Imposing Remedial Sanctions ("Order").
On the basis of this Order and the Respondent's Offer, the Commission makes the following findings:
A. Respondent, during all times relevant hereto, was a person associated with GBI Capital Partners Inc., a broker-dealer registered with the Commission.
B. On August 16, 2002, by Respondent's consent, in which he neither admitted nor denied any of the allegations of the Complaint, except as to jurisdiction which he admitted, the United States District Court for the Eastern District of New York, in an action styled S.E.C. v. Eric Patton, et al., C.A. No. CV 02-2564 (filed April 30, 2002), entered a Final Judgment that permanently enjoined Respondent from violating Section 10(b) of the Exchange Act, and Rule 10b-5 thereunder, ordered Respondent to pay disgorgement, along with prejudgment interest, in the total amount of $22,419, and, based upon Respondent's sworn representations in his Statement of Financial Condition dated March 29, 2002, which had been submitted to the Commission, waived payment of $21,859 in disgorgement and prejudgment interest, and did not order him to pay a civil penalty.
C. The Commission's Complaint alleged that on or about September 26, 2000, Nicolaou received material, nonpublic information concerning the upcoming acquisition of WLR Foods, Inc.; that he communicated this information to three individuals; that he knew, should have known or acted in reckless disregard of the fact that the information he received was nonpublic and was communicated to him in violation of a fiduciary or other duty of trust or confidence; and that he knew, or was reckless in not knowing, that his tippees would either effect transactions in the securities of WLR Foods, Inc. or disclose the information to others who were likely to effect such transactions.
Based on the foregoing, the Commission deems it appropriate and in the public interest to accept Respondent's Offer.
Accordingly, IT IS HEREBY ORDERED, that Respondent Michael Nicolaou be, and hereby is, barred from association with any broker or dealer.
By the Commission.
Jonathan G. Katz
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