INITIAL DECISION RELEASE NO. 124 ADMINISTRATIVE PROCEEDING FILE NO. 3-9403 UNITED STATES OF AMERICA Before the SECURITIES AND EXCHANGE COMMISSION Washington, D.C. _______________________________ In the Matter of : : INITIAL DECISION MARTIN KAIDEN : March 24, 1998 : _______________________________ APPEARANCES: Kevin Thomas Duffy, Jr., and Robert Knuts for the Division of Enforcement, Securities and Exchange Commission Martin Kaiden, pro se BEFORE: Robert G. Mahony, Administrative Law Judge I. INTRODUCTION The Securities and Exchange Commission (Commission) initiated this proceeding by an Order Instituting Proceedings (OIP) on September 11, 1997, pursuant Sections 15(b) and 19(h) of the Securities Exchange Act of 1934 (Exchange Act). The OIP alleged that Respondent Kaiden was permanently enjoined by the United States District Court for the Southern District of New York from further violations of Section 17(a) of the Securities Act of 1933 (Securities Act), and from further conduct giving rise to controlling person liability for violations of Section 15(c)(1)(A) of the Exchange Act and Rule 15c1-2 thereunder. Further, Respondent Kaiden was ordered to pay a $50,000 civil penalty pursuant to Section 20(d) of the Securities Act and Section 21(d)(3) of the Exchange Act. The OIP alleged that the injunction was based on Respondent s fraudulent offering of nonexistent prime bank securities to an insurance company, while chairman, president, and sole shareholder of Kaiden Company, a broker-dealer registered with the Commission from October 9, 1986, to May 29, 1994.<(1)> <(1)> Kaiden Company voluntarily withdrew its registration, effective as of May 29, 1994. Div. Ex. 11. ======END OF PAGE 1====== A hearing was held in New York, New York on December 18, 1997. The Division of Enforcement (Division) called Respondent as a witness. Forty-five Division exhibits were offered and forty-four were accepted into evidence. <(2)> Respondent Kaiden also testified on his own behalf, and offered fourteen exhibits which were admitted. The parties filed successive posthearing briefs, which were received on February 3, 1998, March 3, 1998, and March 11, 1998. <(3)> The Division seeks to bar Respondent from association with any broker, dealer, municipal securities dealer, investment adviser or investment company. Respondent denies that he engaged in any fraudulent activity, and contends that no sanction is warranted. The findings and conclusions are based on the record and my observation of the witnesses demeanor. Preponderance of the evidence has been applied as the applicable standard of proof. Pursuant to Rule 351(b) of the Commission's Rules of Practice, 17 C.F.R. Section 201.351(b), I hereby certify that the record includes the items set forth in the record index issued by the Secretary of the Commission on February 18, 1998. II. FINDINGS OF FACT AND CONCLUSIONS OF LAW A. Summary of the Evidence The Injunction The Final Consent Judgments of Permanent Injunction and Other Relief, entered on August 19, 1997, entered against Respondent Kaiden and Kaiden Company, permanently enjoined Respondent and Kaiden Company from violations of Section 17(a) of the Securities Act, enjoined Kaiden Company from violating Section 15(c)(1)(A) of the Exchange Act and Rule 15c1-2 thereunder, and enjoined Respondent from further conduct giving rise to controlling person liability within the meaning of Section 20(a) of the Exchange Act, also for violations of Section 15(c)(1)(A) of the Exchange Act and Rule 15c1-2 thereunder. Div. Exs. 9-11. Additionally, Respondent Kaiden was ordered to pay a $50,000 civil penalty pursuant to Section 20(d) of the Securities Act and Section 21(d)(3) of the Exchange Act. Respondent consented to the injunction on behalf of himself and Kaiden Company without admitting or denying the allegations in the Amended Complaint, except as to jurisdiction. Tr. 24; Div. Ex. 11. Respondent waived the entry of findings of fact and conclusions of law. Div. Exs. 9-10. Respondent Kaiden Respondent Kaiden is 69 years old, has a college degree, and received an M.B.A. from New York University in 1966. Tr. 23; Div. Ex. 42. He was first employed as a registered representative by a small securities firm in 1974, and started his own firm, Kaiden Company, in 1977. Tr. 66-67; Div. Ex. 30 at 29. Kaiden Company specialized in private placements and limited partnerships. Tr. 67; Div. Ex. 30 at 38-39. Respondent also has a professional insurance license. Tr. 23 During the period from 1986 until Kaiden Company voluntarily withdrew its registration on May 29, 1994, the Company was a registered broker-dealer pursuant to Section 15(b) of the Exchange Act and was located in New York, New York. Div. Ex. 11. Respondent Kaiden was the president and sole shareholder, and was registered with the National Association of Securities Dealers as a Registered Representative and Financial Principal. Id. <(2)> Citations to exhibits offered by the Division and the Respondent will be noted as "Div. Ex. __" and "Resp. Ex. __," respectively. Citations to the transcript of the hearing will be noted as "Tr. __." <(3)> The Respondent attempted to file a sur-rebuttal brief on March 12, 1998. The Respondent did not have leave to file such a brief, and to the extent that he intended the filing to be a motion for such filing, it is DENIED. ======END OF PAGE 2====== The Fraudulent Activity From May 18, 1993, to August 13, 1993, Respondent Kaiden sent by mail or by facsimile seven letters or memoranda to representatives at John Hancock Life Insurance Company (John Hancock) in Boston, Massachusetts, asking them to invest in Prime Bank Guarantees and Standby Letters of Credit. Div. Exs. 1-7, 11, 13, 16, 17. Respondent claimed in the correspondence that through these investment vehicles John Hancock would be guaranteed unusually high returns, by purchasing credit instruments issued by the worlds top 100 banks at a deep discount, and then reselling them in a secondary market at a profit. <(4)> Div. Exs. 1-7. He stated that [t]he instruments are zero-interest Standby Letters of Credit (SLCs) issued for one (1) year and a day, and Prime Bank Guarantees (PBGs) issued for ten (10) years and a day, and bearing interest at the rate of 7.5%, payable annually in arrears. Div. Exs. 1-2 at 1. He claimed that [b]ankers have been attracted to the use of these off-balance sheet instruments because of regulatory pressure to improve capital ratios, and because they offer a way to improve the rate of return earned on their assets. Div. Ex. 1 at 4. Further, he stated that while their issuance was unregulated, the instruments are standardized under rules of the International Chamber of Commerce. Id. at 1. Over the course of the offering letters, Respondent Kaiden offered investment packages, or roll programs , with various rates of return and minimum investment requirements of millions to hundreds of millions of dollars. In late June or early July, after the first three letters had been received, John Hancock staff began questioning the legitimacy of the instruments offered and asked for verification from Respondent Kaiden. Div. Exs. 1-4, 13, 14. Respondent explained in subsequent correspondence that the instruments are not well known because they are not required to be registered; transactions are private, almost entirely bank-to-bank; and there are strictures against solicitation. Div. Ex. 4 at 1. Respondent encouraged John Hancock representatives to learn about the instruments by requesting from their bank a letter confirming the company's availability of funds to engage in such investments. Div. Exs. 4, 5. In later correspondence Respondent Kaiden himself represented that he tried to contact banks used by John Hancock, but that [b]ecause of the extreme privacy of the transactions, and the great confidentiality with which all parties treat their relationships with all other parties . . . it has been slow and difficult going. Div. Ex. 7 at 1. With one memorandum, he purported to attach as proof of the existence of PBGs an agent s quote on $250 billion in PBGs issued by top 25 European banks. Div. Ex. 6. In July 1993, John Hancock representatives contacted Morgan, Lehman Brothers, Goldman Sachs, and the London office of IBCA, John Hancock's foreign bank rating agency, and received responses that confirmed that Respondents investment scheme was likely a scam. Div. Ex. 14, 15. They continued their investigation and received confirmation that the instruments were of a type found in an internationally recognized, fraudulent scheme. Div. Exs. 16-19. The Division offered documentary evidence as proof that the securities offered by Respondent Kaiden to John Hancock did not exist. The Division included letters and affidavits denying the existence of the instruments, from the following internationally recognized banks: Union Bank of Switzerland The Bank of New York Commerzbank National Westminster Bank USA <(4)> See also Div. Ex. 8, the Amended Complaint in the injunctive proceeding. The Commission considers the allegations contained in a complaint which resulted in the entry of a judgment on consent, without admitting or denying the allegations of the complaint, and in which the judgment was unaccompanied by findings of fact, when determining the appropriate sanction in the public interest under Section 15(b) of the Exchange Act. See, e.g., Charles Phillip Elliott, 50 S.E.C. 1273, 1274 n.5, 1276 n.12 (Sept. 17, 1992), aff'd sub nom. Elliott v. SEC, 36 F.3d 86 (11th Cir. 1994). ======END OF PAGE 3====== Credit Suisse Lloyds Bank PLC ABN AMRO Bank N.V. Bank Leu Div. Exs. 21-28. The Division also included published regulatory alerts warning investors not to fall prey to the fraud, from the Alberta Securities Commission, the U.S. Securities and Exchange Commission, and the FDIC. Div. Ex. 20. Finally, the Division cited cases finding that prime bank securities and their secondary markets do not exist, and finding the attempted sale of such instruments to be fraudulent.<(5)> The Amended Complaint for the injunctive action found that: (a) Respondent Kaiden and Kaiden Company were not actually able to obtain the SLCs or PBGs; (b) the securities and secondary markets described by Respondent and Kaiden Company did not exist; (c) the securities offered by Respondent and Kaiden Company could not be purchased at a discount and resold in a secondary market at a substantial profit; (d) neither of the two roll programs offered by Respondent and Kaiden Company existed; and (e) in light of (a) through (d), the securities offered by Respondent and Kaiden Company were risky and did not have a guaranteed return. Div. Ex. 8 at 5. See n.4, supra. Respondent Kaiden contends that he found out about prime bank instruments and guarantees in 1991 after speaking to 60-100 people around the world. Tr. 25, 67-68. He knew that he was obligated as a registered representative to verify the legitimacy of the securities. Tr. 45. At the hearing, however, he could not name any one person or top 100 banks with whom he spoke to verify the existence of the program,<(6)> and did not, in fact, ask credible banking, insurance or accounting firms whether prime bank securities existed.<(7)> Tr. 25-29, 36-56, 67-69, 80. His explanation that he does not remember any details of the events at issue because they occurred a long time ago is not believable and I do not credit any of his testimony on this issue. Respondent admits that he wrote and signed the seven letters and memoranda to John Hancock, Tr. 24-45; Div. Exs. 1-7, 11, but states that he believed that the securities were legitimate, and did not know that the Commission or another governmental body announced that the securities did not exist. He believed that he was to receive a commission after the successful sale of prime bank securities, from the issuer or seller of the securities rather than John Hancock. Tr. 29, 58-59. At the hearing, he explained his understanding of prime bank securities sales as follows: But several things became very apparent. The first is that there would be . . that this . . . all right, there would be no possibility of getting a confirmation from a bank. In the very first place there would be a very small handful, at best, of officers in any given bank and that would probably and almost certainly be at the main branch that would be in any way involved in the activity. That, of necessity, if this activity existed it would have to be on a very private and very secret basis. You say why secret? And I'll tell you why. The explanation was that it had been developed in the immediate <(5)> SEC v. Gallard, 1997 U.S. Dist. LEXIS 19677 (S.D.N.Y. 1997); SEC v. Bremont, 954 F. Supp. 726 (S.D.N.Y. 1997); SEC v. Lauer, 864 F. Supp. 784 (N.D. Ill. 1994), aff d 52 F.3d 667 (7th Cir. 1995); Mishkin v. Peat, Marwick, Mitchell & Co., 744 F. Supp. 531 (S.D.N.Y. 1990). <(6)> In Respondent s Post-Hearing Brief, received March 3, 1998, he named nineteen banks which he thought issued SLCs and PBGs, without further proof. <(7)> During the investigative stage of these proceedings, the Respondent asserted his Fifth Amendment privilege against self-incrimination when asked about prime bank securities. Div. Exs. 29, 30. ======END OF PAGE 4====== post-war period as a means of utilizing Euro-dollars that were beginning to flow overseas to fund off balance sheet projects in developing countries and rebuilding. That the returns offered were considerably higher than were available under normal market conditions and, therefore, if this activity could not be secret it could not exist, it could not be continued for the simple reason that it could make it very difficult for governments to fund treasury securities, for banks to offer conventional instruments, such as CDs or other deposit . . return deposits and the like. It would be . . . if it were widely known, why would people settle for very much lower returns? They would seek out this instrument. So the only way it could be conducted would be on a very private basis where people would make the application in highly structured ways and if allowed to participate they would get a direct contract and they would participate in that manner. That to call a bank and speak to somebody, you're not . . . there would be no reason why they would talk to me. And if they did, the tendency would be for them to deny because to do otherwise would make it available as information too widely. So that normal due diligence was impossible. I know what due diligence is. It doesn't always work. People can lie and so forth, but it would not be possible -- and also, anybody who did participate had to sign non-disclosure documents that were very strong and very binding and that, therefore, they would never discuss their participation. So I am simply saying that over a long period of time, by talking to many people, I did, in fact, become convinced, notwithstanding that while I would have liked to have seen documentary evidence and proof of the kind that [the Division] referred to, I understood why I would not be able to. Tr. 80-82. This testimony, combined with his inability to offer proof regarding persons with whom he spoke about the program, are strong evidence of his lack of due diligence. B. Discussion Section 15(b)(6) authorizes the Commission to censure, place limitations on the activities or functions of such person, or suspend for a period not exceeding 12 months, or bar such person from being associated with a broker or dealer, or from participating in an offering of penny stock, if it is found in the public interest to do so, and if Respondent: 1) is enjoined from any action, conduct, or practice specified in Exchange Act Section 15(b)(4)(C), including being permanently enjoined by a court of competent jurisdiction from engaging in or continuing any conduct or practice in connection with the purchase or sale of any security, or 2) has committed an act enumerated in Exchange Act Section 15(b)(4)(D), including a willful violation of the Securities Act or the Exchange Act. Respondent Kaiden was enjoined by the United States District Court for the Southern District of New York from violating activities prohibited in the Securities Act and the Exchange Act, specifically Securities Act Section 17(a), and Exchange Act Section 15(c)(1)(A) and Rule 15c1-2 thereunder. He signed Final Consent Judgments on behalf of himself and the Martin Kaiden Company, Inc., and stipulated to this fact.<(8)> Div. Exs. 9-11. Further, I conclude that Respondent <(8)> Although the Respondent disputes some of the facts that were found in the Final Consent Judgment, the doctrine of collateral estoppel as well as Commission case law preclude any attack in this proceeding on the validity of the Final Consent Judgment against him. Blinder, Robinson & Co., Inc., 48 S.E.C. 624, 628-30 (1986), vacated and remanded, 837 F.2d 1099 (D.C. Cir. 1988), cert. denied, 488 U.S. 869 (1988); Kimball Securities, Inc., 39 S.E.C. 921, 924 n.4 (1960); J.D. Creger & Co., 39 S.E.C. 165 (1959); Kaye, Real & Co., Inc., 36 S.E.C. 373, 375 (1955); and James F. Morrissey, 25 S.E.C. 372, 381 (1947). ======END OF PAGE 5====== Kaiden's violation of Section 17(a) of the Securities Act was done with scienter, and therefore willful within the meaning of Exchange Act Section 15(b)(4)(D).<(9)> Section 17(a) of the Securities Act makes it unlawful for any person in the offer or sale of securities by the use of the mails or any means or instrumentality of interstate commerce to: 1) employ any device, scheme, or artifice to defraud, or 2) obtain money or property by any untrue statement of or omission of a material fact necessary to make the statement made not misleading, or 3) engage in any transaction, practice, or business which is or would be a fraud on the purchaser. Scienter, meaning intent to deceive, manipulate, or defraud, or at least knowing misconduct, is required to prove a violation of Securities Act Section 17(a)(1), and may be satisfied by a finding of recklessness. David Disner, 63 SEC Docket 2246, 2254, 2254 n.20 (Feb. 4, 1997); SEC v. First Jersey Securities, Inc., 101 F.3d 1450, 1467 (2d Cir. 1996) (citations omitted); IIT v. Cornfeld, 619 F.2d 909, 923 (2d Cir. 1980). Negligence, rather than scienter, is required to find a violation of Securities Act Section 17(a)(2) or (3). Jay Houston Meadows, 61 SEC Docket 2444, 2453 n.16 (May 1, 1996) (citations omitted); SEC v. Steadman, 967 F.2d 636, 643 & n.5 (D.C. Cir. 1992) (citing Aaron v. SEC, 446 U.S. 680, 701-02 (1980); Newcome v. Esrey, 862 F.2d 1099, 1102 n.7 (4th Cir. 1988)). As to the elements of Securities Act Section 17(a), I find that Respondent Kaiden made statements and omissions of material facts in connection with the offer of securities, and that his conduct was reckless. SEC v. Gallard, 1997 U.S. Dist. LEXIS 19677 at *8-10; SEC v. First Jersey Securities, Inc., 101 F.3d at 1467. The Division has proven that the business of buying and trading prime bank instruments such as PBGs and SLCs for profit does not exist because there is no market for such instruments to be traded. SEC v. Lauer, 864 F. Supp. 784, 792 (N.D. Ill. 1994), aff d 52 F.3d 667 (7th Cir. 1995). The fact that the instruments and secondary market at issue did not exist are material facts which a reasonable investor would consider to be important. SEC v. Glantz, 1995 U.S. Dist. LEXIS 13701 at *9-10 (S.D.N.Y. 1995); Basic, Inc. v. Levinson, 485 U.S. 224, 231-32 (1988); TSC Industries, Inc. v. Northway, Inc., 426 U.S. 438, 449 (1976). Further, as alleged in the Amended Complaint, there was a significant risk of loss to investors such as John Hancock had they not discovered the fraudulent nature of Respondents scheme. Respondents claims that he did not know that the securities did not exist are not believable, and it is clear that he did not perform the due diligence required of a securities professional. Contrary to Respondents assertions, however, the instruments involved are subject to the antifraud provisions where, as here, the securities at issue do not exist.<(10)> SEC v. Gallard, 1997 U.S. Dist. LEXIS 19677 at *6-8 (S.D.N.Y. 1997); SEC v. Lauer, 52 F.3d at 669; Mishkin v. Peat, Marwick, Mitchell & Co., 744 F. Supp. 531, 553 n.10 (S.D.N.Y. 1990). See also, SEC v. Bremont, 954 F. Supp. 726, 730-32 (S.D.N.Y.1997). He acted with the requisite scienter when he repeatedly offered for sale to John Hancock PBGs and SLCs that he knew or should have known did not exist. Representations and opinions . . . given without basis and in reckless disregard of their truth or falsity establish scienter under [the antifraud provisions]. SEC v. Bremont, 954 F. Supp. at 730 (quoting Rolf v. Blyth, Eastman Dillon & Co., 570 F.2d 38, 48 (2d Cir. 1978); Sirota v. Solitron Devices, Inc., 673 F.2d 566, 575 (2d Cir.), cert. denied, 459 U.S. 838 (1982)). Thus Respondent willfully violated Securities Act Sections 17(a)(1) and 17(a)(3). Respondent raises several procedural claims. He argues that the Divisions complaint and amended complaint in the District Court proceeding lacked the required specificity, and that he did not receive fair notice of the Commission's claim <(9)> A willful violation of the securities acts is committed when a respondent intentionally commits the act which constitutes the violation. New Allied Development Corp., 63 SEC Docket 807, 821 n.31 (November 26, 1996) (citing Tager v. SEC, 344 F.2d 5, 8 (2d Cir. 1965); Arthur Lipper Corp. v. SEC, 547 F.2d 171, 180 (2d Cir. 1976), cert. denied, 434 U.S. 1009 (1978); Butcher & Singer, Inc., 48 S.E.C. 640, 643 (1987)). <(10)> It is well established that such instruments are securities under the securities laws. ======END OF PAGE 6====== in the investigative stage of the proceedings.<(11)> I decline to consider procedural claims that should have been raised in District Court. Additionally, Respondent claims that his rights were violated when two John Hancock letters and memoranda written by him were introduced into evidence by the Division at the administrative hearing, Tr. 74-78, 84-85; Div. Exs. 5, 6, because the Division used only five of the letters and memoranda, that is Division Exhibits 1 through 4 and 7, in the investigative and complaint stages of the District Court proceedings. Div. Ex. 8. Respondent further claims that Division Exhibits 5 and 6 were not in the investigative file shown to him in October 1997 in preparation for this administrative proceeding. Respondent stipulated that he prepared the two additional documents and transmitted them to John Hancock on July 14, 1993. Div. Ex. 11. These additional pieces of correspondence are relevant to the charges and admitting them as evidence did not violate Respondent's rights. III. PUBLIC INTEREST The imposition of administrative sanctions requires consideration of: the egregiousness of the defendant's actions, the isolated or recurrent nature of the infraction, the degree of scienter involved, the sincerity of the defendant's assurances against future violations, the defendant's recognition of the wrongful nature of his conduct, and the likelihood that the defendant's occupation will present opportunities for future violations. Steadman v. SEC, 603 F.2d 1126, 1140 (5th Cir. 1979), aff'd on other grounds, 450 U.S. 91 (1981). The amount of a sanction depends on the facts of each case and the value of the sanction in preventing a recurrence. Berko v. SEC, 316 F.2d 137, 141 (2d Cir. 1963); Richard C. Spangler, Inc., 46 S.E.C. 238, 254 n.67 (1976); Leo Glassman, 46 S.E.C. 209, 211-12 (1975). While Section 15(b)(6) authorizes the Commission to order sanctions ranging from a censure to a bar from association with a broker or dealer, the Commission recently found that the place limitations language of Section 15(b) may be found to include a collateral bar from association with any broker, dealer, municipal securities dealer, investment adviser, or investment company.<(12)> Meyer Blinder, 65 SEC Docket 1970, 1974-81 (Oct. 1, 1997). The Commission stated that [c]ollateral bars should be used in cases where it is contrary to the public interest to allow someone to serve in any capacity in the securities industry. Id. at 1981. Further, as criteria for imposing a collateral bar, the Commission considers: 1) whether the misconduct is of the type that, by its nature, flows across various securities professions and poses a risk of harm to the investing public in any such profession, and 2) whether the egregiousness of respondent's misconduct demonstrates the need for a comprehensive response in order to protect the public. Id. Respondent's arguments against any sanction are not persuasive. By his unlawful conduct, he has demonstrated that he lacks the honesty required of a securities professional, and a severe sanction is warranted to deter others from similar activities. Respondent's activities were egregious, his fraudulent offering activities were repetitive in spite of the fact that he should have known that PBGs and SLCs do not exist, and he has not acknowledged the wrongfulness of his conduct. His repeated solicitations and admitted lack of due diligence are evidence of a high degree of recklessness, and he has offered no satisfactory defense of his behavior. <(11)> The Respondent did not claim that the OIP in this proceeding did not provide fair notice. <(12)> The Commission has a long-standing practice of basing administrative proceedings on injunctions. Shuck v. SEC, 264 F.2d 358 (D.C. Cir. 1958). The Commission has held that "[u]nder the terms of the Exchange Act a consent injunction . . . may furnish the sole basis for remedial action under Section 15(b) of the Exchange Act if such action is in the public interest." Cortlandt Investing Corp., 44 S.E.C. 45, 53 (1969) (footnote omitted). ======END OF PAGE 7====== At present Respondent Kaiden is working as an insurance broker. Tr. 24. Although Kaiden Company voluntarily withdrew its registration as a broker-dealer on May 29, 1994, and in spite of Respondent s claims that he has expressed no interest in working in the securities industry since that time, I conclude that Respondent Kaiden s occupation presents opportunities for future violations. The Commission has noted that "Congress, in writing Section 15(b) of the Exchange Act, viewed past misconduct as the basis for an inference that the risk of probable future misconduct was sufficient to require exclusion from the securities business." Arthur Lipper Corp., 46 S.E.C. 78, 101 (1975). While I do not believe that a collateral bar is merited in this instance, I do conclude that it is in the public interest that Respondent Kaiden be barred from association with any broker or dealer, and from being associated with a member of a national securities exchange or registered securities association. IV. ORDER Based on the findings and conclusions set forth above, I ORDER, pursuant to Sections 15(b)(6) and 19(h) of the Exchange Act, that Martin Kaiden be and hereby is barred from association with any broker or dealer and from association with a member of a national securities exchange or registered securities association. This order shall become effective in accordance with and subject to the provisions of Rule 360 of the Commission's Rules of Practice, 17 C.F.R. 201.360. Pursuant to that rule, a petition for review of this initial decision may be filed within 21 days after service of the decision. It shall become the final decision of the Commission as to each party who has not filed a petition for review pursuant to Rule 360(d)(1) within 21 days after service of the initial decision upon him, unless the Commission, pursuant to Rule 360(b)(1), determines on its own initiative to review this initial decision as to any party. If a party timely files a petition for review, or the Commission acts to review as to a party, the initial decision shall not become final as to that party. Robert G. Mahony Administrative Law Judge ======END OF PAGE 8======