U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 16295 / September 27, 1999
SECURITIES AND EXCHANGE COMMISSION V. CHARLES F. PARISI, Civil Action No. 99CV 2079B (RBB) (S.D. Cal.)
The Securities and Exchange Commission today filed a Complaint in federal district court in San Diego against Charles F. Parisi ("Parisi") for violating an administrative order issued by the Commission in July 1992. At that time, the Commission barred Parisi from associating with any investment adviser or investment company with the right to reapply to the Commission for permission to be so associated after one year. He never reapplied.
The Complaint filed today alleges that for nearly five years following the 1992 bar Order, Parisi violated the Order by associating with Palladian Advisers, Inc. (the "Adviser"), an investment adviser, and the Palladian Trust (the "Trust"), an investment company. The Complaint alleges that Parisi associated with these entities by, among other things: financing them; using others to conceal his association with the entities; holding himself out as a representative of the entities; helping select Trust portfolio managers; participating in Trust board meetings; and receiving compensation based on sales of investments in the Trust. The Complaint seeks an injunction and civil penalties against Parisi for violating the bar Order and Section 203(f) of the Investment Advisers Act of 1940.
In a related action, the Commission today instituted and simultaneously settled an administrative proceeding against Harry Michael Schwartz ("Schwartz"), Parisi's long-time employee. In the Order, the Commission finds that Schwartz, while president of an investment adviser and investment company, allowed his employer to associate with these entities for nearly five years, even though during such time his employer was barred from associating with any investment adviser or investment company. The Order also alleges that Schwartz caused the entities to engage in disclosure and unlawful borrowing violations. While neither admitting nor denying the Commission's findings, Schwartz consented to the entry of an order requiring that he: (1) be suspended from associating with any investment adviser or investment company for 12 months; (2) cease and desist from committing and/or causing violations of Sections 203(f), 206(1), (2), and (4) of the Advisers Act and Rule 206(4)-4(a)(1) thereunder, and Section 34(b) of the Investment Company Act of 1940; and (3) pay a civil money penalty of $10,000. (In the Matter of Harry Michael Schwartz, Rel. No. IA-1833)