UNITED STATES OF AMERICA
In the Matter of
Joseph C. Kane, Jr.,
ORDER INSTITUTING ADMINISTRATIVE
PROCEEDINGS, MAKING FINDINGS
AND IMPOSING REMEDIAL SANCTIONS
PURSUANT TO SECTION 15(b) OF THE
SECURITIES EXCHANGE ACT OF 1934
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) of the Securities Exchange Act of 1934 ("Exchange Act") against Joseph C. Kane, Jr. ("Respondent" or "Kane").
In anticipation of the institution of these administrative proceedings, Kane 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 proceeding brought by or on behalf of the Commission or in which the Commission is a party, and without admitting or denying the findings contained herein, except as to the Commission's jurisdiction over him and over the subject matter of these proceedings, and the findings contained in Section III.6 below, which are admitted, Kane consents to the issuance of this Order Instituting Administrative Proceedings, Making Findings and Imposing Remedial Sanctions Pursuant to Section 15(b) of the Securities Exchange Act of 1934 ("Order"), as set forth below.
On the basis of this Order and Respondent's Offer, the Commission finds that:
1. From May 1983 to April 1996, Kane was a registered representative in New York. Kane resides in Greenwich, Connecticut.
2. From January 1989 to April 1996, Kane, while a registered representative associated with two broker-dealers, misappropriated approximately $595,000 of funds given to him by four customers to purchase securities.
3. In order to carry out his scheme, Kane made materially false and misleading statements to induce these customers to invest, executed an unauthorized transaction, forged the signatures of certain customers, fabricated confirmation statements and made misrepresentations to conceal his fraudulent conduct.
4. When the customers questioned Kane about discrepancies on their account statements, he gave them false assurances.
5. When Kane's fraudulent conduct ultimately was discovered, Kane repaid one defrauded customer with funds he fraudulently obtained from another customer. Subsequently, Kane repaid all the customers their original investments plus interest.
6. On April 11, 2002, a partial final judgment was entered by consent against Kane, permanently enjoining him from future violations of Sections 17(a) of the Securities Act of 1933 ("Securities Act"), Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, in the civil action entitled Securities and Exchange Commission v. Joseph C. Kane, Jr., Civil Action Number 97-Civ-2931, in the United States District Court for the Southern District of New York.
7. By reason of the foregoing, Kane willfully violated, and was permanently enjoined from violating, Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, which prohibit fraudulent conduct in the offer or sale of securities and in connection with the purchase or sale of securities.
In view of the foregoing, the Commission deems it appropriate and in the public interest to impose the sanctions specified in Kane's Offer.
ACCORDINGLY, IT IS HEREBY ORDERED, pursuant to Section 15(b)(6) of the Exchange Act, that Respondent Kane be, and hereby is, barred from association with any broker or dealer.
By the Commission.
Jonathan G. Katz
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