U.S. Securities & Exchange Commission
SEC Seal
Home | Previous Page
U.S. Securities and Exchange Commission

SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 16967 / April 17, 2001

SECURITIES AND EXCHANGE COMMISSION v. STEVEN T. SNYDER , Civil Action No. 01-CV-1870 (E. D. Pa.)

The Securities and Exchange Commission ("Commission") announced that, on April 17, 2001, it filed a complaint in federal district court in Philadelphia, Pennsylvania, charging that Steven T. Snyder, a former registered representative of Meridian Capital Markets, Inc. ("Meridian"), engaged in a fraudulent scheme to generate profits for Meridian by charging various school districts and other municipalities in Pennsylvania and West Virginia unfair prices for U.S. Treasury securities. The Commission's complaint charges that the securities were sold to the municipalities from March 1993 through December 1995, in connection with certain tax-exempt refinancings known as advance refundings. The Commission's complaint further alleges that, in connection with those transactions, Snyder engaged in a practice known as "yield burning" in which a broker or dealer purposely inflates the prices it charges customers on Treasury securities in order to reduce the yield on those securities and make it appear that the advance refunding transaction complies with federal tax laws. Furthermore, in order to secure Meridian's selection in certain advance refundings, Snyder arranged for Meridian to make payments to a financial consultant who provided services to certain municipal entities in West Virginia.

Without admitting or denying the Commission's allegations, Snyder consented to the entry of a judgment which permanently enjoins him from violating Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. In addition, the judgment directs Snyder to pay to the U. S. Treasury: (1) an aggregate of $279,987 in resolution of the Commission's claims, as well as potential claims by the Internal Revenue Service and the Department of Justice, and (2) a civil penalty of $20,000.

In a related administrative proceeding Snyder consented to an order, based on the entry of the civil injunction, barring him from association with any broker, dealer or municipal securities dealer, with a right to reapply for association after three years.

http://www.sec.gov/litigation/litreleases/lr16967.htm

Modified:04/18/2001