SECURITIES EXCHANGE ACT OF 1934
Release No. 50397 / September 16, 2004
INVESTMENT ADVISERS ACT OF 1940
Release No. 2298 / September 16, 2004
ADMINISTRATIVE PROCEEDING
File No. 3-11667
In the Matter of WILLIAM BARNEY THOMAS, Respondent. |
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ORDER INSTITUTING ADMINISTRATIVE PROCEEDINGS PURSUANT TO SECTION 15(b) OF THE SECURITIES EXCHANGE ACT OF 1934 AND SECTION 203(f) OF THE INVESTMENT ADVISERS ACT OF 1940, MAKING FINDINGS, AND IMPOSING REMEDIAL SANCTIONS |
I.
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") and Section 203(f) of the Investment Advisers Act of 1940 ("Advisers Act") against William Barney Thomas ("Thomas" or "Respondent").
II.
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 him 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) of the Securities Exchange Act of 1934 and Section 203(f) of the Investment Advisers Act of 1940, Making Findings, and Imposing Remedial Sanctions ("Order"), as set forth below.
III.
On the basis of this Order and Respondent's Offer, the Commission finds that:
1. Thomas, age 64, is a resident of Las Vegas, Nevada. Between October 1987 and August 1994, Thomas held himself out and acted as an investment adviser through Pension & Retirement Services Company ("Pension & Retirement"), a sole proprietorship that he owned and controlled. Pension & Retirement is not, and never has been, registered in any capacity with the Commission. Thomas is not, and never has been, registered with the Commission as an investment adviser. Between January 1987 and December 1991, Thomas was associated with a series of registered broker-dealers, but acted outside of those associations in connection with the sale of securities of Pension & Retirement. During that time, Thomas did not qualify for the safe harbor from broker-dealer registration for associated persons of an issuer provided by Rule 3a4-1 of the Exchange Act.
2. On August 26, 1997, an Order of Permanent Injunction (Reserving the Issues of Disgorgement and Civil Penalties) was entered against Thomas by the United States District Court for the Western District of Pennsylvania, in Securities and Exchange Commission v. William Barney Thomas, et al., Civil Action No. 96-1775. The Order of Permanent Injunction enjoins Thomas from future violations of Section 17(a) of the Securities Act of 1933, Sections 10(b) and 15(a)(1) of the Exchange Act and Rule 10b-5 thereunder, and Sections 204, 206(1), 206(2) and 206(4) of the Advisers Act and Rules 204-2(a), 204-2(b) and 206(4)-2 thereunder.
3. The Commission's complaint alleged that Thomas orchestrated a scheme wherein he solicited 23 individuals to become advisory clients of Pension & Retirement by falsely representing Pension & Retirement as a legitimate, registered investment adviser. The complaint further alleged that Thomas fraudulently induced the clients to invest over $418,000 in Pension & Retirement investment programs. The Complaint also alleged that Thomas ultimately liquidated over $300,000 of client assets which he misappropriated for his personal use. The complaint further alleged that, in connection with the aforementioned conduct, Thomas acted as an unregistered investment adviser, failed to keep appropriate books and records, and acted as an unregistered broker-dealer.
4. On December 3, 1996, Thomas pleaded guilty to thirteen counts of third degree felony theft filed against him by the Commonwealth of Pennsylvania in Commonwealth of Pennsylvania v. William B. Thomas, CR-62-95. Thomas was sentenced to house arrest for a period of six months, and was ordered to pay restitution in the amount of $50,000.
5. The criminal charges to which Thomas plead guilty were based, essentially, on the conduct described in paragraph III.3 above.
IV.
In view of the foregoing, the Commission deems it appropriate and in the public interest to impose the sanctions agreed to in Respondent's Offer.
Accordingly, it is hereby ORDERED:
Pursuant to Section 15(b)(6) of the Exchange Act and Section 203(f) of the Advisers Act, that Respondent Thomas be, and hereby is, barred from association with any broker, dealer, or investment adviser;
Any reapplication for association by the Respondent will be subject to the applicable laws and regulations governing the reentry process, and reentry may be conditioned upon a number of factors, including, but not limited to, the satisfaction of any or all of the following: (a) any disgorgement ordered against the Respondent, whether or not the Commission has fully or partially waived payment of such disgorgement; (b) any arbitration award related to the conduct that served as the basis for the Commission order; (c) any self-regulatory organization arbitration award to a customer, whether or not related to the conduct that served as the basis for the Commission order; and (d) any restitution order by a self-regulatory organization, whether or not related to the conduct that served as the basis for the Commission order.
For the Commission, by its Secretary, pursuant to delegated authority.
Secretary