UNITED STATES OF AMERICA
In the Matter of
GORDON K. ALLEN, JR.,
|ORDER INSTITUTING 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 Gordon K. Allen, Jr. ("Allen" or "Respondent").
In anticipation of the institution of these proceedings, Respondent has submitted an Offer of Settlement (the "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 to which the Commission is a party, and without admitting or denying the findings herein, except as to the Commission's jurisdiction over them and the subject matter of these proceedings, and the findings contained in Section III.2 and III.4 below, which are admitted, Respondent consents to the entry of this Order Instituting Administrative Proceedings Pursuant to Section 15(b)(6) of the Securities Exchange Act of 1934, Making Findings, and Imposing Remedial Sanctions ("Order"), as set forth below.
On the basis of this Order and Respondent's Offer, the Commission finds that:
1. At all relevant times, Allen was a registered representative with Conquest Capital, LLC, a broker-dealer registered with the Commission pursuant to Section 15 of the Exchange Act. Allen is a resident of Bowling Green, Kentucky.
2. On February 13, 2003, a Final Judgment was entered by consent against Allen in the United States District Court for the Southern District of New York in the action captioned Securities and Exchange Commission v. John Freeman, et al., 00 Civ. 1963 (VM) (S.D.N.Y.), permanently enjoining Allen from violating Sections 10(b) and 14(e) of the Exchange Act and Rules 10b-5 and 14e-3 thereunder. Allen was also ordered to pay disgorgement in the amount of $1,158,688 with prejudgment interest in the amount of $386,850, but payment of all but $32,169 of disgorgement and prejudgment interest was waived based upon his sworn Statement of Financial Condition, and a civil penalty was not imposed.
3. The Commission's Complaint alleges that John Freeman, a temporary word-processing employee at Goldman Sachs & Co., Inc. and later Credit Suisse First Boston, tipped James Cooper and other defendants about merger and acquisition transactions involving clients of those investment banking firms. James Cooper tipped several persons, including his broker, Chad Conner. Conner tipped Allen, who purchased securities in advance of 16 transactions and realized profits of $895,713. Allen also provided tips to several persons who traded and realized profits of $262,975 collectively.
4. On March 20, 2002, in United States v. Allen, 00 Crim. 731 (GBD)(S.D.N.Y.), based on the conduct at issue in the Commission's civil injunctive action, Allen was convicted in the United States District Court for the Southern District of New York of conspiracy to commit insider trading, insider trading, and conspiracy to violate the Travel Act. Allen was sentenced on October 18, 2002 to 40 months incarceration, 3 years supervised probation, and a $3,800 special assessment.
In view of the foregoing, the Commission deems it appropriate and in the public interest to impose the sanctions specified in Respondent Allen's Offer.
ACCORDINGLY, IT IS HEREBY ORDERED:
Pursuant to Section 15(b)(6) of the Exchange Act, that Respondent Allen be, and hereby is, barred from association with any broker or dealer.
By the Commission.
Jonathan G. Katz
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