UNITED STATES OF AMERICA
In the Matter of
MICHAEL L. SMIRLOCK,
|ORDER INSTITUTING PROCEEDINGS, MAKING FINDINGS AND IMPOSING REMEDIAL SANCTIONS|
The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest that proceedings be, and hereby are, instituted pursuant to Section 203(f) of the Investment Advisers Act of 1940 ("Advisers Act") against Michael L. Smirlock ("Respondent")
In anticipation of these proceedings, the Respondent 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, without admitting or denying the findings contained herein, expect the Commission's findings set forth in Paragraphs III. A., III.B. and III.D., and the Commission's jurisdiction over him and over the subject of this proceeding, which are admitted, Respondent has consented to the issuance of this Order Instituting Proceedings, Making Findings and Imposing Remedial Sanctions ("Order"), and to the entry of the findings and the imposition of the remedial sanctions set forth below.
On the basis of this Order and the Respondent's Offer, the Commission finds that:
A. Defendant Michael L. Smirlock, age 45, resides in Wellington, Florida. At all relevant times, Smirlock was Chairman, President and CEO, a director and majority shareholder of LASER Advisers, Inc., which was registered with the Commission as an investment adviser. At Laser Advisers, Inc., Smirlock, among other things, managed an investment portfolio for three hedge funds.
B. On July 25, 2002 Smirlock was permanently restrained and enjoined by the United States District Court for the Southern District of New York (Securities and Exchange Commission v. Michael L. Smirlock, et al., 00Civ.9680(RO)) from directly or indirectly violating Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder, from causing, aiding or abetting violations of Sections 206(1) and 206(2) of the Investment Advisers Act of 1940 ("Advisers Act"), from causing, aiding or abetting violations of Section 204 of the Advisers Act and Rules 204-2(a)16 and 204-2(e)(3) thereunder and from violating the Commission's Order in In the Matter of Michael L. Smirlock, Advisers Act Release No. 1393 (November 29, 1993).
C. The Commission's complaint in Securities and Exchange Commission v. Michael L. Smirlock, et al. alleged, inter alia, that from December 1997 to June 1998, Smirlock engaged in an unlawful scheme to falsely inflate the value of an investment portfolio that he managed for the three hedge funds and that while Smirlock's scheme was ongoing, additional interests in the hedge funds were sold to investors. The Commission's complaint also alleged that Smirlock violated a prior Commission Order issued against him in In the Matter of Michael L. Smirlock, Advisers Act Release No. 1393 (November 29, 1993).
D. On November 2, 2001, in United States v. Michael L., Smirlock, Crim. No.00CR1292(GEL), based on the same conduct at issue in the Commission's civil injunctive action, Smirlock was convicted in the United States District Court for the Southern District of New York of one count of securities fraud in violation of 15 U.S.C. §§ 78j(b) and 78ff, 17 C.F.R. § 240.10b-5 and 18 U.S.C.§ 2 and one count of fraud under the Advisers Act in violation of 15 U.S.C. §§ 80b-6(1), 80b-6(2) and 80b-17 and 18 U.S.C. § 2.
In view of the foregoing, the Commission deems it appropriate and in the public interest to impose the sanction set forth in the Offer submitted by the Respondent.
Accordingly, IT IS ORDERED that Respondent be, and hereby is, barred from association with any investment adviser.
By the Commission.
Jonathan G. Katz
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