SEC Charges Recidivists for Violations of a Previous Commission Order
Litigation Release No. 25514 / September 21, 2022
Securities and Exchange Commission v. Manhattan Transfer Registrar Company and John C. Ahearn, No. 9:22-cv-81457 (S.D. Fla. filed September 20, 2022)
On September 20, 2022, the Securities and Exchange Commission charged recidivists Manhattan Transfer Registrar Company ("Manhattan Transfer"), a registered transfer agent based in Port Jefferson, New York, and its former principal, John C. Ahearn, a resident of Erie, Colorado, for violations of a Commission order issued against them on May 17, 2018 ("Commission Order").
The SEC's complaint against Manhattan Transfer and Ahearn, filed in the U.S. District Court for the Southern District of Florida, alleges Ahearn and Manhattan Transfer violated the Commission Order and the transfer agent associational bar provisions of the Securities Exchange Act of 1934 ("Exchange Act") when Ahearn acted as inspector of elections on behalf of Manhattan Transfer and participated in the conduct of Manhattan Transfer's transfer agent business while he was subject to a bar from association with any transfer agent. The complaint further alleges Manhattan Transfer violated the Commission Order by not complying with its undertaking that it would retain an independent consultant and that, for a period of time, the independent consultant would not enter into any professional relationship with Manhattan Transfer other than its independent consultant work. Despite that undertaking, the complaint alleges that Manhattan Transfer retained the independent consultant to, among other things, revise Manhattan Transfer's written policies and procedures and participate in brokering the sale of Manhattan Transfer.
The complaint charges Ahearn and Manhattan Transfer with violating the Commission Order and the transfer agent associational bar provisions of Section 17A(c)(4)(C) of the Exchange Act. Ahearn consented, without admitting or denying the allegations of the complaint, to the entry of a civil court judgment permanently enjoining him from violating the charged provision and ordering him to pay a civil penalty of $25,000, and to issuance of a court order pursuant to Section 21(e) of the Exchange Act requiring him to comply with the Commission Order. Manhattan Transfer consented, without admitting or denying the allegations of the complaint, to the entry of a civil court judgment permanently enjoining it from violating the charged provision and ordering it to pay disgorgement of $1,075 and prejudgment interest thereon of $200.02, and a civil penalty of $75,000.
The SEC's investigation was conducted by Barbara Viniegra in the Miami Regional Office and supervised by Eric R. Busto and Glenn S. Gordon. The SEC's litigation is being led by Christine Nestor under the supervision of Teresa Verges. The SEC examination that led to the investigation was conducted by Carol Fava, Kenneth A. Liebl, and Steven C. Vitulano.