UNITED STATES OF AMERICA
| ORDER MAKING FINDINGS AND IMPOSING REMEDIAL SANCTIONS AS TO ROBERT J. GUYER|
In these proceedings instituted pursuant to Section 15(b) of the Securities Exchange Act of 1934 ("Exchange Act"),1 Respondent Robert J. Guyer ("Guyer" or "Respondent") has submitted an Offer of Settlement ("Offer") which the Securities and Exchange Commission ("Commission") has determined to accept.
Solely for the purpose of settling 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 the Respondent and the subject matter of these proceedings, and the findings contained in Sections III.2 and III.4 below, which are admitted, Respondent consents to the entry of this Order Making Findings and Imposing Remedial Sanctions as to Robert J. Guyer ("Order") pursuant to Section 15(b) of the Exchange Act, as set forth below.
On the basis of this Order and Respondent's Offer, the Commission finds that:
1. Guyer, age 64, resides in Dundee, Michigan. From April 1993 until April 1999, Guyer served as President of Liberty National Securities, Inc. ("LNS"), a registered broker-dealer located in Dundee, Michigan. Guyer was a registered representative holding Series 7, 24, 27 and 63 licenses.
2. On March 12, 2002, the United States District Court for the District of Connecticut entered a judgment that permanently enjoined Guyer from violating Section 17(a) of the Securities Act of 1933, Sections 10(b), 15(b) and 17(a)(1) of the Exchange Act, and Rules 10b-5, 15b3-1 and 17a-3(a)(12) thereunder. SEC v. Martin R. Frankel, et al., 3:00-CV-1778 (EBB) (D. Conn. Mar. 12, 2002) ("Civil Action").
3. On March 9, 2001, in its Second Amended Complaint in the Civil Action, the Commission alleged that from at least November 1991 through May 1999, Martin Frankel ("Frankel") knowingly orchestrated a scheme to defraud Franklin America Corporation ("FAC"), International Financial Corporation ("IFC") and their insurance company subsidiaries of more than $215 million. As part of this scheme, Frankel falsely represented to FAC, IFC and their insurance company subsidiaries that he was investing their funds in safe government securities through accounts at LNS and provided them with LNS confirmations and account statements that purportedly reflected the purchase and sale of government securities. These material representations were false. Frankel was not investing FAC's, IFC's and the insurance company subsidiaries' funds in government securities. Rather, Frankel was using their funds to support his lavish lifestyle. The Commission also alleged that Guyer provided substantial assistance to Frankel in furtherance of his fraudulent conduct. In 1992, the Commission barred Frankel from the securities industry, including being associated with a broker or dealer. Despite this bar, Frankel secretly controlled LNS. Frankel installed Guyer as LNS's president to hide Frankel's control over the broker-dealer. Among other things, Guyer prepared and filed false broker-dealer registration statements and amendments, and other forms with the Commission that failed to disclose Frankel's ownership and control of LNS, and failed to disclose that the Commission had barred Frankel from the securities industry. Guyer knew, or was reckless in not knowing, that Frankel was engaged in fraudulent conduct.
4. On September 18, 2000, Guyer pled guilty to one count of conspiracy to commit securities fraud in violation of 18 U.S.C. § 371 and one count of willfully subscribing a false tax return in violation of 26 U.S.C. § 7206(1) in United States v. Robert J. Guyer, 3:00CR193 (EBB) in the United States District Court for the District of Connecticut, and he is currently awaiting sentencing.
5. The counts to which Guyer pled guilty alleged, inter alia, that Guyer filed false broker-dealer registration statements and amendments, and other forms with the Commission that failed to disclose Frankel's ownership and control of LNS.
In view of the foregoing, the Commission deems it appropriate and in the public interest to impose the sanctions specified in Respondent's Offer.
ACCORDINGLY, IT IS HEREBY ORDERED:
Pursuant to Section 15(b)(6) of the Exchange Act, that Respondent be, and hereby is, barred from association with any broker or dealer.
By the Commission.
Jonathan G. Katz
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