SECURITIES AND EXCHANGE COMMISSION
In the Matter of the Application of
For Review of Disciplinary Action Taken by the
AMERICAN STOCK EXCHANGE LLC
OPINION OF THE COMMISSION
NATIONAL SECURITIES EXCHANGE - REVIEW OF DISCIPLINARY PROCEEDINGS
Violations of Exchange Constitution, Exchange Rules, and Federal Securities Laws
Fraud -- Placing Unprofitable Trades In Member's Account; Engaging In Fictitious Trading; Misleading Member As To Value Of Trading Position; and Converting Members' Funds
Conduct Inconsistent With Just And Equitable Principles Of Trade
Association With Member Without Exchange Approval
Engaging In Outside Business Without Exchange Approval
Trading For Member Organization Without Exchange Or Employer Approval
Improper Execution of Discretionary Trades
Making Material Misstatements To Exchange Representatives
Former managing director and specialist of national securities exchange member organization engaged in fraudulent conduct by placing unprofitable trades in a member's account, creating fictitious trades, misleading a member, and converting members' funds; traded for member organization without the Exchange's or his employer's approval, allowed others to trade for member organization, and intentionally concealed this trading from the Exchange and his employer; and made material misstatements to Exchange representatives. Held, Exchange's findings of violations are sustained in part, and the sanctions it imposed are sustained.
Pasquale Schettino, pro se.
Philip J. Axelrod and David E. Rosenstein, for the American Stock Exchange LLC.
Appeal filed: June 24, 1999
Last brief filed: October 12, 1999
Pasquale Schettino, a former managing director and specialist with Spear Leeds & Kellogg ("SLK"), an American Stock Exchange LLC ("AMEX" or "Exchange") member firm, appeals from AMEX disciplinary action. The AMEX found that Schettino committed multiple violations of the Exchange's Constitution, its rules, and the federal securities laws in connection with his activities on behalf of Bullseye Securities, Inc. ("Bullseye"), a former Exchange member firm and clearing customer of SLK. 1 Specifically, the AMEX found that Schettino engaged in fraud when he placed unprofitable trades in an Exchange member's SLK account, created fictitious trades to enhance Bullseye's equity, and converted two members' funds for Bullseye's use. It also found that Schettino traded for Bullseye without the requisite approval of the Exchange and SLK, permitted individuals whowere not affiliated with Bullseye to trade for its accounts, and deliberately concealed this trading from the Exchange and SLK. The AMEX further found that Schettino made material misstatements to Exchange staff during its investigation. The AMEX censured Schettino and permanently barred him from regular, options principal, associate or allied membership, from approved person or limited trading permit holder status, and from employment or association in any capacity with an Exchange member or member organization. It fined Schettino $100,000. 2 We base our findings on an independent review of the record.
From 1990 to December 1995, Schettino was a managing director of SLK and in charge of its clearance operations on the Exchange floor. 3 Schettino also acted as a specialist for stocks registered with SLK. While at the firm, Schettino became acquainted with Joseph Roffler, who supervised the Professional Margin Department. He and Roffler developed a close personal friendship. Roffler left SLK in 1993 and formed Bullseye. Bullseye engaged in on-floor and off-floor stock and options trading and cleared its trading through SLK. SLK required Bullseye to maintain minimum equity of $400,000.
Bullseye lost money from its inception. Roffler asked Schettino to trade for Bullseye, and Schettino agreed. From January 1994 through mid-July 1995, without SLK's or the Exchange's approval, Schettino traded for Bullseye, through accounts denominated "Bullseye 43AC" and "Bullseye 43CD/Nash." Schettino also engaged in fraudulent activity on Bullseye's behalf. In July 1995, Bullseye fell below SLK's minimum equity requirement and was liquidated. Around this same time, SLK learned of Schettino's involvement with Bullseye. It removed Schettino as a managing director effective December 31, 1995.
A. Schettino's Fraudulent Conduct
The AMEX charged Schettino with violating Article V, Sections 4(b) and 4(i) of the AMEX Constitution, which prohibit "fraud and fraudulent acts" and with willful violations of the Securities Exchange Act of 1934, in connection with his activities on Bullseye's behalf.
1. In July 1995, Schettino submitted to SLK for clearance several trades for Bullseye. 4 Schettino allocated the profitable trades to the Bullseye 43AC account and the unprofitable trades to Exchange member Ronald Russo's SLK account. Schettino identified "APEX" as the contra party to the unprofitable trades because he did not have actual contra parties to the trades. The record shows that the trades were fabricated by Schettino, did not occur in the open market, and were not reported for public dissemination on the tape.
When Russo discovered the unprofitable trades in his account, he confronted Schettino. Schettino responded that he had a "problem" with the trades, and that Russo had to keep them in his account. Schettino promised Russo that he "would make good the money, the loss," which amounted to approximately $50,000. Russo testified that Schettino subsequently reimbursed him for the losses.
Although Schettino maintained that Russo was a party to these fabricated trades, the AMEX gave "considerable weight" to Russo's testimony that he did not initiate the trades and did not know of, authorize, or consent to their placement in his account. The AMEX determined that, at the hearing, Schettino was "evasive" and his explanations were "inconsistent" with his prior deposition testimony and the pertinent documentary evidence. 5 Schettino's trading for Bullseye using Russo's account was fraudulent and violated Article V, Section 4(b) of the Exchange Constitution. In addition, Schettinowillfully violated Exchange Act Section 10(b) 6 and Rule 10b-5, 7which prohibit fraudulent conduct in connection with the purchase and sale of securities.
2. In April and May 1995, Schettino engaged in a series of fictitious and purportedly profitable trades for the Bullseye 43AC account. 8 Schettino submitted each trade to SLK for clearance at a favorable price relative to the last sale in each stock, and then canceled the trade on the next trading day. As with the fraudulent trades involving Russo's account, Schettino identified "APEX" as the contra party to these trades even though there were no actual trades. Schettino admitted in deposition testimony that he created fictitious trades. He also gave an example of a fictitious trade, and stated that his fictitious trading was designed to maintain compliance with Bullseye's minimum equity requirement. At the disciplinary hearing, Schettino contradicted this deposition testimony and denied entering fictitious trades in Bullseye accounts. The AMEX refused to credit Schettino's hearing testimony over his prior deposition testimony. We agree with this determination. 9 Schettino's entry of fictitious trades was fraudulent and violated Article V, Section 4(b) of the AMEX Constitution.
3. In May 1995, Exchange member Robert Peters asked Schettino (in his capacity as an SLK employee) about opening an error account with SLK. Peters wanted to conduct an independent brokerage business on the AMEX floor, and was informed that to do so he needed an error account with a clearing firm. 10 Schettino told Peters that he must deposit $50,000 to open an error account with SLK. Peters agreed andgave Schettino a check for $50,000 made payable to SLK. However, Schettino did not give Peters new account forms to complete, nor did he require Peters to provide new account information. Schettino deposited Peters' check into a Bullseye account. The AMEX credited Peters' testimony that he did not know of or consent to his money being deposited into a Bullseye account. When Peters discovered that his $50,000 was not deposited into an SLK error account, Peters complained to SLK. SLK opened an error account in Peters' name and credited $50,000, plus interest, to the account. Schettino's conversion of Peters' funds for Bullseye's use violated the AMEX's antifraud provision, Article V, Section 4(b) of the Exchange Constitution.
4. In June 1995, Exchange member Jeffrey Barthel advised Schettino that he wanted to effect an options trade, but he did not have an SLK account. Barthel asked Schettino to open an SLK account in Barthel's name and to purchase Intuit, Inc. options in that account. Barthel gave Schettino a check for $11,319.50 made payable to SLK for the cost of the Intuit options. Schettino purchased the Intuit options, as Barthel requested. However, Schettino placed the trade in Bullseye's 43AC account. Barthel testified at his Exchange deposition and at the hearing that he was unaware that Schettino effected the purchase in a Bullseye account.
Schettino thereafter engaged in unauthorized trades using Barthel's funds. Barthel testified at his Exchange deposition that he did not know Schettino had sold his Intuit options position. Nor did he know that Schettino used the proceeds from that sale to effect another trade. Barthel further testified in that deposition that Schettino did not return any portion of his funds, and that he was "not happy about it." 11 Schettino violated Article V, Section 4(b) of the Exchange Constitution and willfully violated Exchange Act Section 10(b) and Rule 10b-5 by intentionally misleading Barthel into believing that his Intuit options position had expired worthless when it had not, and by converting the proceeds from his unauthorized sale of Barthel's Intuit options for Bullseye's use.
B. Conduct Inconsistent with Just and Equitable Principles of Trade
The AMEX charged Schettino with violating Article V, Section 4(h) of the Exchange Constitution, which prohibits actions inconsistent with just and equitable principles of trade, because he allowed two Exchange members, Robert Lewis and Robert Proto, neither of whom were affiliated with Bullseye, to conduct their own trading in Bullseye accounts, and intentionally concealed this activity from SLK and the Exchange. We conclude, in connection with these charges, that Schettino violated Article V, Section 4(h).
1. In late January and early February 1995, Schettino asked Lewis, an independent floor broker 12 and principal of Lawrence Securities, if he was interested in investing in and, along with Schettino, trading for Bullseye. Schettino offered to open a Bullseye account so Lewis could conduct his own trading from the Exchange floor, contrary to AMEX rules. 13 Schettino and Lewis agreed that Lawrence Securities would transfer funds from its SLK account to a new Bullseye account. They also agreed to split the profits and losses from their combined trading, with 80% to Lawrence Securities and 20% to Bullseye.
In his answer to the Exchange's charges, Schettino admitted to a profit and loss sharing arrangement in which Lawrence Securities would transfer funds to a Bullseye account, with the profits and losses to be split between Lawrence Securities and Bullseye. Because Schettino and Lewis knew that trading by Lewis other than on an agency basis would violate Exchange rules, 14 they agreed to establish the account in the name of a fictitious individual, "Nash," to avoid SLK's and the Exchange's scrutiny. 15
In February 1995, Schettino transferred $7,500 and securities positions worth about $1,900 from Lawrence Securities' SLK account to an account denominated "Bullseye 43CD/Nash." From February through July 1995, Schettino and Lewis effected hundreds of securities trades through the Bullseye 43CD/Nash account, including trades in SLK specialty stocks. Lawrence Securities received a total of $34,000 pursuant to Schettino's and Lewis' profit and loss sharing agreement.
2. In February 1995, Exchange member Proto, then SLK's head equity specialist, spoke to Schettino about an Exchange-listed stock, Grupo Simec S.A. de C.V. (SIM), and Proto's desire to purchase that stock. Proto told Schettino that he did not have a personal account in which to place an SIM purchase. Based on his conversation with Proto, Schettino purchased 10,000 SIM shares for the Bullseye 43CD/Nash account for $51,398.91. The next day, Schettino sold the 10,000 SIM shares for $65,222.11, yielding a profit of $13,823.20.
Schettino and Proto agreed that Proto's portion of the profit would be $6,000. Both admitted at the hearing that they decided to have a check in that amount made payable to Proto's mother to avoid SLK's detection of Proto's participation in the SIM trade. 16 In accordance with Schettino's instructions, SLK issued a $6,000 check made payable to Proto's mother and containing the notation "Grupo Simec S.A. de C.V."
C. Schettino's Trading For Bullseye
The AMEX charged Schettino with violating Article IV, Section 2(b) of the AMEX Constitution 17 and AMEX Rules 342(b) 18 and 415 19 relating to his trading for Bullseye without SLK's and the Exchange's prior approval. The AMEX also charged Schettino with using his discretion in trading for Bullseye, in violation of AMEX Rule 103(c). 20
Schettino admitted in his answer that he traded for Bullseye. Schettino's trading for Bullseye began in January 1994 and continued until Bullseye's liquidation in July 1995. Schettino effected the trades through the Bullseye 43AC and Bullseye 43CD/Nash accounts.
During 1995, Schettino's trading for Bullseye often exceeded 500,000 shares per month, with more than one million shares trading in Bullseye accounts in June 1995. In his answer, Schettino admitted that he used discretion in trading for Bullseye. He also admitted that he participated in the management of Bullseye's operations.
Neither the Exchange nor SLK knew of Schettino's involvement in Bullseye. Schettino conceded in deposition testimony that SLK was unaware of his trading for Bullseye. Schettino's conduct violated Article IV, Section 2(b) of the AMEX Constitution and AMEX Rules 342(b), 415(b), and 103(c). 21
D. Material Misstatements To Exchange Representatives
We sustain the AMEX's findings that Schettino violated Article V, Section 4(e) of the AMEX Constitution, which prohibits a member from making material misstatements to Exchange representatives during an Exchange investigation.
1. At a July 1995 meeting attended by SLK's General Counsel and Exchange staff members, Schettino stated that he "loaned" $48,000 to Bullseye in May 1995. The record supports this statement and demonstrates that Schettino used a check from Ronald Russo and his wife to make the loan. Schettino admitted that he used the Russos' check so that SLK would not detect the loan. Schettino thereafter made a material misstatement to Exchange staff members when, at his January 1996 Exchange deposition, he testified that the $48,000 was not a loan but a "gift" to Bullseye.
2. At his February 1996 Exchange deposition, Schettino falsely denied having any role in opening the Bullseye 43CD/Nash account or speaking to his SLK colleague Conte about the account. Schettino's use of the fictitious name "Nash" for the new Bullseye account was an attempt to conceal Lewis' and Lawrence Securities' investment in Bullseye, as well as his own role in establishing the account.
Schettino also falsely testified that Lewis' transfer of funds from his firm's SLK account to the Bullseye 43CD/Nash account constituted "collateral" for future commission business from Bullseye. These funds represented Lawrence Securities' investment in Bullseye. Schettino admitted that he approached Lewis about investing in Bullseye, and that he did so because Bullseye's equity was low. Moreover, Lewis consistently denied in deposition and hearing testimony that his firm's deposit of cash and securities was "collateral" for future commission business from Bullseye.
Schettino further falsely testified that he had no discussions with Lewis about Bullseye during the period between Schettino's January and February 1996 deposition sessions. The evidence,including Lewis' and Schettino's hearing testimony, shows that, between deposition sessions, Lewis and Schettino spoke on several occasions to coordinate their respective testimony regarding Lewis' involvement in Bullseye and the nature of the trading in the Bullseye 43CD/Nash account.
Schettino raises several claims of misconduct on the part of Exchange staff members. Schettino first contends that an Exchange investigator "lied" before the Exchange's Disciplinary Panel. At the hearing, the investigator gave conflicting testimony concerning his attendance at various meetings between the staff and Exchange member Peters. On cross-examination, the investigator voluntarily corrected the record and stated that he was not present at a certain meeting. Following Schettino's motion, the Panel struck the investigator's testimony from the record due to "inconsistencies" concerning his attendance at staff meetings with Peters. The Panel stated that it did not consider or rely on the investigator's testimony in reaching its determinations. The Panel observed that there was "overwhelming" evidence independent of the investigator's testimony to support its findings. In light of the Panel's actions, we find that Schettino was not prejudiced by the investigator's testimony.
Schettino next contends that the Exchange attorney [who prosecuted the case] was being investigated by the New York State Bar Association for suborning the investigator's perjury. The record demonstrates that the Bar Association's investigation of [the Exchange attorney] was initiated after Schettino's counsel filed a complaint against him. The investigation has since been closed, and no action was taken. More importantly, the investigator's testimony was not considered by the Panel in making its findings of violations.
Schettino further contends that the Exchange's failure to call Roffler as a witness demonstrated its lack of belief in Roffler's credibility. The Exchange's decision not to call Roffler did not detract from the testimony of those witnesses who did appear before the Panel. 22 Schettino could have called Roffler as a witness, butchose not to do so. Schettino cannot now complain of any unfairness based on what appears to be his own election.
Schettino argues that the sanctions imposed on him are "grossly unfair and inequitable." He asserts the following mitigating circumstances: that his trading involved no personal profit and was motivated by friendship for Roffler; that he was treated more harshly than Roffler; 23 that the Exchange has in the past imposed lighter sanctions for more serious misconduct; and that he has suffered personal, business, and financial hardship.
We have consistently held that the appropriate sanctions in a case depend on its particular facts and circumstances and cannot be determined by comparison with action taken in other proceedings. 24 Our review of Schettino's sanctions is limited to determining whether they are excessive, oppressive, or unduly burden competition. 25
Schettino engaged in serious misconduct in connection with his activities on Bullseye's behalf. This misconduct included placing unprofitable trades in a member's account, entering fictitious and purportedly profitable trades for Bullseye, and converting members' funds for Bullseye's use. Schettino's wrongdoing involved multipleviolations of the AMEX Constitution, its rules, and the federal securities laws, and extended over a nineteen-month period. Further, Schettino sought to conceal his activity from the Exchange and SLK.
Before us, Schettino continues to deny that he was involved in any wrongdoing. He blames Roffler for making him the scapegoat for Bullseye's demise. In these circumstances, although we set aside the AMEX's findings of its Rule 110(a) and 170(e) violations, we find that protection of the securities industry and public investors will be served by imposing severe sanctions against Schettino. We thus conclude that the sanctions assessed by the AMEX are not excessive or oppressive, nor do they impose an undue burden on competition. We sustain Schettino's sanctions. An appropriate order will issue. 26
By the Commission (Acting Chairman UNGER and Commissioners HUNT and CAREY).
Jonathan G. Katz
UNITED STATES OF AMERICA
SECURITIES AND EXCHANGE COMMISSION
SECURITIES EXCHANGE ACT OF 1934
Rel. No. 44329 / May 21, 2001
Admin. Proc. File No. 3-9921
In the Matter of the Application of
For Review of Disciplinary Action Taken by the
AMERICAN STOCK EXCHANGE LLC
ORDER SUSTAINING DISCIPLINARY ACTION TAKEN BY NATIONAL SECURITIES EXCHANGE
On the basis of the Commission's opinion issued this day, it is
ORDERED that the sanctions imposed by the American Stock Exchange LLC against Pasquale Schettino be, and they hereby are, sustained.
By the Commission.
Jonathan G. Katz
1 Other named respondents were Joseph Roffler, principal of Bullseye; Robert Lewis, principal of Lawrence Securities, Ltd.; Ronald Russo; and Robert Proto. Roffler, Lewis, and Russo settled with the Exchange. Proto did not appeal the sanctions imposed against him by the Exchange's Disciplinary Panel following a contested hearing.
2 On July 9, 1999, the Commission granted a partial stay of the sanctions imposed on Schettino. See Pasquale Schettino, Order Granting Partial Stay, Admin. Proc. File No. 3-9921 (July 9, 1999) (granting stay of censure and fine, but not permanent bar).
3 SLK provides clearing services for market makers, registered traders, and specialists conducting business on the floor of the Exchange. SLK is also the registered specialist for hundreds of stocks and options listed for trading on the Exchange.
4 These trades involved the stocks of Colonial Data Technology, Porta Systems, Inc., Diodes, Inc., and Thermolase Corporation.
5 The AMEX reiterated throughout its opinion that it did not find Schettino to be a credible witness, and therefore did not rely on his version of events. Credibility determinations by the fact finder are entitled to considerable weight and can be overcome only when there is "substantial evidence" for doing so. Anthony Tricarico, 51 S.E.C. 457, 460 (1993). The record in this case contains no such evidence.
6 15 U.S.C. §78j(b).
7 17 C.F.R. §240.10b-5.
8 These trades involved the stocks of Ivax Corp. and Colonial Data Technology.
9 See Michael J. Fee, 50 S.E.C. 1124, 1125 (1992) (sustaining administrative law judge's refusal to credit respondent's hearing testimony where it contradicted earlier sworn investigative testimony), aff'd, 998 F.2d 1002 (3d Cir. 1993) (Table).
10 Error accounts are established and maintained for the purpose of correcting trading errors. See William K. Cantrell, 52 S.E.C. 1322, 1324-25 & n.9 (1997) (describing NASD practice regarding error accounts).
11 Although Barthel recanted his deposition testimony at the hearing, the AMEX believed that Barthel changed his testimony to aid Schettino's defense, and that his hearing testimony was false. As a result, the AMEX placed considerable weight on Barthel's deposition testimony.
12 An independent floor broker executes orders for other exchange members for a fee. Jonathan Feins, Exchange Act Rel. No. 41943 (Sept. 29, 1999), 70 SEC Docket 2116, 2117 n.1.
13 See, e.g., Article IV, Section 2(b) of the AMEX Constitution (prohibiting Lewis from associating with Bullseye, a member organization, without Exchange approval).
14 See, e.g., AMEX Rule 110(a) (prohibiting Lewis from trading for an account in which he has an interest without being registered and approved as a registered trader).
15 Schettino decided to use the name "Nash" on the account after a conversation with SLK colleague Andrew Conte, who told Schettino that he lived on a street named "Nash."
16 Proto conceded in his Exchange deposition and at the hearing that SLK had certain policies regarding employee securities and commodities transactions. These policies included requiring that SLK approve accounts maintained at another firm, and that all securities be held for a minimum of thirty days prior to sale.
17 Article IV, Section 2(b) provides that "[w]ithout the prior approval of the Exchange, . . . no member shall be associated with a member organization unless all members associated with and approved persons of such member organization who are required to be approved by the Exchange are so approved."
18 AMEX Rule 342(b) provides that "[n]o member, allied member or employee of a member or member organization shall at any time be engaged in any other business; or be employed or compensated by any other person; or serve as an officer, director, partner or employee of another business organization; or own any stock or have, directly or indirectly, any financial interest in any other organization engaged in any securities, financial or kindred business without making a written request and receiving the prior written consent of his member organization employer . . . . "
19 AMEX Rule 415(b) provides that "[n]o member, allied member or employee associated with a member or member organization shall have a securities or commodities account with respect to which such person has a financial interest or the power, directly or indirectly, to make investment decisions, at another member or member organization, . . . without the prior written consent of another person designated by the member or member organization under Rule 320(c)(1) . . . . "
20 AMEX Rule 103(c)(1) provides that "[n]o regular or options principal member, while on the Floor, shall: Execute or cause to be executed on the Exchange, including by means of the issuance or acceptance of a commitment or obligation to trade, any transaction for the purchase or sale of any stock with respect to which transaction such member is vested with discretion as to (1) the choice of security to be bought or sold, (2) the total amount of any security to be bought or sold, or (3) whether any such transaction shall be one of purchase or sale . . . . "
21 The AMEX determined that Schettino violated AMEX Rule 110(a), which prohibits a member who is not registered with the Exchange as a registered trader from trading for an account in which he has an "interest." The AMEX found that Schettino had an "interest" in the Bullseye 43AC account based primarily on a $48,000 loan that he made to Bullseye and Roffler. Our review of the record reveals, however, that the loan proceeds were deposited into the Bullseye 43AA capital account, not the Bullseye 43AC account. The AMEX, moreover, did not demonstrate the manner in which this loan gave Schettino an "interest" in the Bullseye 43AC account. Given the state of this record, we do not sustain the AMEX's finding.
The AMEX also relied on evidence of Schettino's power to trade for and make investment decisions regarding the Bullseye 43AC account to establish his "interest" in that account. The AMEX cites no authority for this interpretation of "interest." In addition, the record is devoid of other evidence of the nature of Schettino's "interest" in the Bullseye 43AC account, such as some commensurate benefit from the trading or contribution to the account.
The AMEX further found a violation of AMEX Rule 170(e), which prohibits an individual associated with a specialist firm from trading in the firm's specialty securities for any account in which he has a direct or indirect interest. The AMEX found that Schettino traded forty-three AMEX-listed SLK specialtystocks and nine AMEX-listed SLK specialty options in the Bullseye 43AC account. The AMEX relied on its determinations regarding the Rule 110(a) violation and found that Schettino had an interest in the Bullseye 43AC account. In light of our conclusion that the record fails to support such a finding, we do not sustain the Rule 170(e) violation.
22 See, e.g., Richard C. Spangler, 46 S.E.C. 238, 243 n.13 (1976) (rejecting respondents' argument that the testimony of certain customer-witnesses should be discredited because only a few customers were called by the Division of Enforcement; stating "[t]hat some customers did not testify in no way impairs the credibility of those who did testify as to themisrepresentations made to them.").
23 In his settlement with the Exchange, Roffler was found to have violated Article IV, Section 2(b) and Article V, Section 4(h) of the AMEX Constitution and AMEX Rules 311, 320(b) and 444(a). There was no finding that Roffler engaged in fraud. Roffler received a censure and permanent bar, but no fine. See In the Matter of Joseph Roffler, AMEX Disciplinary Panel Decision 96-D-07 (Apr. 15, 1997).
24 See, e.g., Butz v. Glover Livestock Commission Co., 411 U.S. 182, 187 (1973); Jonathan Feins, Exchange Act Rel. No. 41943 (Sept. 29, 1999), 70 SEC Docket at 2131 & n.36. In addition, we have repeatedly emphasized that the sanctions in settled cases may well differ from those in litigated cases. Justine Susan Fischer, 53 S.E.C. 734, 741 n.4 (1998).
25 See Section 19(e)(2) of the Exchange Act, 15 U.S.C.§78s(e)(2).
26 We have considered all of the parties' contentions. We have rejected or sustained them to the extent that they are inconsistent or in accord with the views expressed in this opinion.
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