UNITED STATES OF AMERICA Before the SECURITIES AND EXCHANGE COMMISSION SECURITIES EXCHANGE ACT OF 1934 Release No. 37530 / August 6, 1996 ADMINISTRATIVE PROCEEDING File No. 3-9052 ___________________________________ : In the Matter of : ORDER INSTITUTING PUBLIC : ADMINISTRATIVE ROBERT J. DANTONE : PROCEEDING, MAKING : FINDINGS AND ISSUING Respondent. : CEASE-AND-DESIST ORDER : : : __________________________________: I. The Securities and Exchange Commission ("Commission") deems it appropriate that a public administrative proceeding pursuant to Section 21C of the Securities Exchange Act of 1934 ("Exchange Act") be instituted against Robert J. Dantone ("Dantone"). II. In anticipation of the institution of this proceeding, Dantone has submitted an Offer of Settlement ("Offer"), which the Commission has determined to accept. Solely for the purpose of this proceeding 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 that Dantone admits the jurisdiction of the Commission over him and over the subject matter of this proceeding, Dantone consents to the entry of this Order Instituting Public Administrative Proceeding, Making Findings and Issuing Cease-and- Desist Order ("Order") set forth below. Accordingly, IT IS ORDERED that a proceeding pursuant to Section 21C of the Exchange Act be, and hereby is, instituted. ==========================================START OF PAGE 2====== III. On the basis of this Order and the Offer submitted by Dantone, the Commission finds that:-[1]- A. Robert J. Dantone is 36 years old and resides in West Windsor, New Jersey. Between February 1987 and May 1994, Dantone was associated as a registered representative with Refco Securities, Inc. ("RSI"), a broker-dealer registered with the Commission (File No. 8-26718). During the relevant period, Dantone was the junior trader on RSI's government securities options trading desk. Dantone processed transactions in accordance with instructions he received from the senior trader on the government securities options trading desk. B. Between 1987 and 1991, Steven D. Wymer ("Wymer"), the owner of two former California-based registered investment advisory firms, perpetrated a series of schemes by which he defrauded his clients of more than $80 million.2 RSI was one of several broker-dealers at which Wymer maintained customer accounts in connection with his investment advisory business. C. Between August 1987 and May 1988, Wymer conducted a scheme that resulted in his misappropriation of approximately $2.9 million in premiums due his clients from government securities options trading at RSI. As part of and in furtherance of his scheme, Wymer instructed Dantone to cause RSI to pay directly to him between 20% and 90% of the premiums from certain options transactions executed on behalf of Wymer's clients. Wymer informed Dantone that these payments constituted the remittance of advisory fees owed to him by his clients and which his clients purportedly had authorized to be paid to him. In ---------FOOTNOTES---------- -[1]- The findings herein are made pursuant to Dantone's Offer and are not binding on any other person or entity named as a respondent in this or any other proceeding. 2 As a result of his conduct, on February 7, 1992, Wymer was permanently enjoined from future violations of the federal securities laws. SEC v. Institutional Treasury Management, Inc., Denman & Company and Steven D. Wymer, Civil Action No. 91-6715 MRP (Ex) (C.D. Cal.). Wymer was also barred from the securities industry on June 9, 1992. Steven D. Wymer, Advisers Act Rel. No. 1315 (June 9, 1992). On September 29, 1992, Wymer pleaded guilty to 9 felony counts and was ordered to disgorge all of his assets and pay restitution and prejudgment interest in the amount of $209 million. He was originally sentenced to a 14 year and 7 month prison term, which was subsequently reduced to 7 years and 3 months. ==========================================START OF PAGE 3====== reliance upon authorization forms provided by Wymer to RSI and purportedly signed by Wymer's clients, Dantone caused RSI to pay Wymer his claimed fees directly out of the premiums of specific options transactions.3 RSI then deposited the balance of the premiums into the clients' accounts. The trade confirmations for the transactions reported only the premium amount net of Wymer's purported fees and a price adjusted to reflect the net amount. D. In the course of executing certain options transactions, Dantone did not record on the trade tickets the full amount of the premium on the options transactions, but rather the premium less Wymer's purported fee. Consequently, the trade tickets for these transactions contained inaccurate prices. As a result of this practice, RSI violated Section 17(a) of the Exchange Act and Rules 17a-3 and 17a-4 thereunder by failing to make, keep current and preserve accurate trade tickets. E. Between August 1987 and May 1988, Dantone caused RSI to violate Section 17(a) of the Exchange Act and Rules 17a-3 and 17a-4 thereunder. As part of his conduct, Dantone wrote trade tickets that did not accurately reflect the price paid on certain options transactions. IV. Based on the foregoing, the Commission deems it appropriate to accept the Offer submitted by Dantone and impose the sanctions specified in the Offer. Accordingly, IT IS HEREBY ORDERED that: Pursuant to Section 21C of the Exchange Act that Dantone cease and desist from causing any violation and any future violation of Section 17(a) of the Exchange Act and Rules 17a-3 and 17a-4 thereunder. By the Commission. Jonathan G. Katz Secretary 3 The authorizations permitted RSI, "to withdraw and pay funds, at the direction of Steven D. Wymer (advisor) from the undersigned account . . . for the payment of certain management fees or incentive fees or both."