U.S. Securities and Exchange Commission
LITIGATION RELEASE NO. 18798 / July 27, 2004
Securities and Exchange Commission v. Joseph X. Crivelli, Civil Action No. 1:04CV01247(RMC)(D.D.C.)(July 27, 2004)
JOSEPH X. CRIVELLI, PRESIDENT OF JC MANAGEMENT, CONSENTS TO PAY A $25,000 CIVIL PENALTY RELATING TO SHORT SELLING IN CONNECTION WITH A PUBLIC OFFERING
The Securities and Exchange Commission announced the filing of a civil penalty action against Joseph X. Crivelli, the President and sole employee of JC Management, Inc., an investment manager of a private investment fund located in Pennsylvania. The Commission's Complaint alleges that Crivelli violated Rule 105 of Regulation M under the Securities Exchange Act of 1934, which prohibits covering a short sale with securities obtained in a public offering if the short sale occurred within five business days before the pricing of the offering.
According to the Commission's Complaint, in July 2002, at Crivelli's direction, JC Management sold short 10,000 shares of Monarch Casino & Resorts, Inc. ("MCRI") within five business days prior to the pricing of a secondary offering by MCRI. JC Management subsequently obtained an allocation of 10,000 shares of MCRI in the secondary offering and Crivelli used the allocated shares to cover JC Management's outstanding short position in the stock. The Complaint further alleges that JC Management realized profits of $25,788 from the transaction. Crivelli, without admitting or denying the allegations in the Commission's Complaint, has consented to pay a civil penalty of $25,000.
On July 27, 2004, the Commission also instituted and simultaneously settled an administrative cease-and-desist proceeding against Crivelli and JC Management based on the same conduct. (In the Matter of JC Management and Joseph X. Crivelli, Administrative Proceeding File No. 3-11561) ("Order"). Crivelli and JC Management agreed to settle the proceeding, without admitting or denying the findings in the Order. They consented jointly and severally to pay disgorgement of $25,788 in illegal trading profits and prejudgment interest and to cease and desist from committing or causing any violations, and any future violations, of Rule 105 of Regulation M.
The Commission thanks the NASD for its assistance in this matter.