Robert W. Cook Named Director of SEC Division of Trading and Markets
Securities and Exchange Commission Chairman Mary L. Schapiro announced today that Robert W. Cook has been named Director of the agency's Division of Trading and Markets.
Mr. Cook, 44, comes to the SEC from the law firm of Cleary Gottlieb Steen & Hamilton LLP, where he has been a partner in the firm's Washington D.C. office since 2001. At Cleary Gottlieb, which he joined in 1992, Mr. Cook has established himself as one of the nation's leading practitioners on broker-dealer and market regulation.
"Investors will benefit greatly from the knowledge, leadership and insight that Robert will bring to the agency," said Chairman Schapiro. "Robert has an incredible grasp of the issues confronting the Division and a deep understanding of securities markets."
Mr. Cook said, "I am honored that Chairman Schapiro has given me the opportunity to join the staff of the Commission at this important time for our country's financial markets and financial regulatory system. I look forward to the privilege of working with the Chairman, the Commissioners, and the talented and dedicated staff in the Division of Trading and Markets and throughout the agency to promote the interests of investors and facilitate fair, orderly and efficient markets."
The SEC's Division of Trading and Markets establishes and maintains standards for fair, orderly, and efficient markets. The Division regulates the major securities market participants, including broker-dealers, credit rating agencies, transfer agents, and self-regulatory organizations such as stock exchanges, the Financial Industry Regulatory Authority (FINRA) and clearing agencies.
While in private practice, Mr. Cook advised clients on a wide range of matters arising under the federal securities laws, SEC regulations, and self-regulatory organization rules. His extensive experience includes working on OTC derivatives transactions, new financial products and structures, and securities trading and compliance matters. His clients have included U.S. and foreign broker-dealers, banks, exchanges, electronic trading platforms, issuers, investment funds, investment advisers, and institutional investors. He also represented various financial industry trade associations and ad hoc coalitions on regulatory initiatives affecting the securities industry generally and on developing standardized documentation and procedures for common industry transactions. Mr. Cook also has been actively involved in financial market issues involving not only the Commission, but other federal regulatory agencies as well.
Mr. Cook graduated magna cum laude with an A.B. in Social Studies in 1988 from Harvard College, where he was elected to Phi Beta Kappa. He received his Master of Science with distinction in Industrial Relations and Personnel Management from the London School of Economics in 1989. Mr. Cook received his J.D. cum laude from Harvard Law School in 1992. (Press Rel. 2009-242)
Change in the Meeting: Additional Item
The following matter will also be considered during the Closed Meeting scheduled for Thursday, Nov. 12, 209, at 2:00 p.m.: Consideration of Amicus participation.
At times, changes in Commission priorities require alterations in the scheduling of meeting items. For further information and to ascertain what, if any, matters have been added, deleted or postponed, please contact the Office of the Secretary at (202) 551-5400.
Securities and Exchange Commission Orders Hearing on Registration Revocation Against Ten Public Companies for Failure to Make Required Periodic Filings
On November 9, the Commission instituted public administrative proceedings to determine whether to revoke or suspend for a period not exceeding twelve months the registrations of each class of the securities of ten companies for failure to make required periodic filings with the Commission:
In this Order, the Division of Enforcement (Division) alleges that the ten issuers are delinquent in their required periodic filings with the Commission.
In this proceeding, instituted pursuant to Exchange Act Section 12(j), a hearing will be scheduled before an Administrative Law Judge. At the hearing, the Administrative Law Judge will hear evidence from the Division and the Respondents to determine whether the allegations of the Division contained in the Order, which the Division alleges constitute failures to comply with Exchange Act Section 13(a) and Rules 13a-1 and 13a-13 thereunder, are true. The Administrative Law Judge in the proceeding will then determine whether the registrations pursuant to Exchange Act Section 12 of each class of the securities of these Respondents should be revoked or suspended for a period not exceeding twelve months. The Commission ordered that the Administrative Law Judge in this proceeding issue an initial decision not later than 120 days from the date of service of the order instituting proceedings. (Rel. 34-60972; File No. 3-13680)
In the Matter of Merriman Curhan Ford & Co., D. Jonathan Merriman, and Christopher Aguilar
On November 10, the Commission issued an Order Instituting Administrative and Cease-And-Desist Proceedings, Pursuant to Sections 15(b) and 21C of the Securities Exchange Act of 1934, Making Findings, and Imposing Remedial Sanctions and a Cease-And-Desist Order (Order) as to Merriman Curhan Ford & Co., D. Jonathan Merriman, and Christopher Aguilar. The Order finds that Jon Merriman and Aguilar, who were each responsible for David "Scott" Cacchione's supervision, unreasonably delegated their supervisory duties over him to others and then ignored red flags signaling that Cacchione was engaged in fraud. The Commission's settlements include financial penalties and suspensions.
During his tenure at the Merriman Firm, Cacchione perpetrated two fraudulent schemes for which he was sued by the Commission in March 2009 in SEC v. David Scott Cacchione, Case No. CV- 09- 1259 (JL) (N.D. Cal. filed March 24, 2009). The Commission's Order, instituted today, finds that in the first scheme, Cacchione used his Merriman Firm email account to transfer confidential account statements of Merriman Firm customers to his customer and friend, William "Boots" Del Biaggio III, so that Del Biaggio could fraudulently pledge the securities held in the innocent customers' accounts to obtain more than $45 million in personal loans. Second, the Order finds that Cacchione engaged in fraudulent unauthorized trading in several customer accounts in which he purchased risky securities without his customers' permission.
Today's Order finds that, at the time of these schemes, Aguilar had placed Cacchione on "heightened supervision" because he had a disciplinary history when he joined the Merriman Firm. The heightened supervision was supposed to include a daily review of Cacchione's emails and securities trading, but the review was delegated to a lower-level compliance employee who failed to perform a thorough review. The Order further finds that neither Aguilar nor Jon Merriman followed up to ensure that Cacchione was being adequately supervised, even after an elderly customer complained that Cacchione had purchased penny stocks in her account without her permission. Most of Cacchione's fraudulent activity was conducted over the Merriman Firm's email system and the Order finds that it is more likely that the schemes could have been detected and prevented had reasonable resources and follow-up been devoted to Cacchione's supervision.
The Commission's Order also finds that, through Cacchione's conduct in sending confidential Merriman account statements to Del Biaggio, the Merriman Firm violated Rule 10(a) of Regulation S-P, which prohibits broker-dealers from disclosing private customer information without prior notice to the customers. In addition, the order finds that the Merriman Firm, Jon Merriman and Aguilar allowed Cacchione to supervise other Merriman registered representatives when they knew he lacked the required license to perform those duties.
All three parties consented to the entry of the SEC's order without admitting or denying the SEC's findings. As part of the order, the Merriman Firm, Jon Merriman and Christopher Aguilar agreed to cease and desist from future violations of Section 15(b)(7) of the Securities Exchange Act of 1934. The Merriman Firm also agreed to cease and desist from future violations of Regulation S-P. In addition, the order imposed a censure and a $100,000 penalty against the Merriman Firm, a $75,000 penalty against Jon Merriman and a $40,000 penalty against Aguilar. Both Jon Merriman and Aguilar were also suspended from acting in a supervisory capacity at a broker-dealer for a period of 12 months. Additionally, the Merriman Firm agreed to retain an independent consultant to review its compliance and supervisory policies and procedures. (Rel. 34-60976; File No. 3-13681)
In the Matter of Tolan S. Furusho, Esq.
On November 10, the Commission issued an Order of Forthwith Suspension Pursuant to Rule 102(e)(2) of the Commission's Rules of Practice, which forthwith suspended Tolan S. Furusho, Esq. from appearing or practicing before the Commission. The Commission's order found that, on June 30, 2009, the United States District Court for the Western District of Washington entered a judgment convicting Furusho, an attorney who has appeared and practiced before the Commission, of conspiracy to commit securities fraud.
The Court based its judgment on Furusho's plea to a Nov. 28, 2007 Criminal Information, which alleged, among other conduct, that Furusho engaged in one count of conspiracy to commit securities fraud. The Information alleged that Furusho knowingly and willfully participated in a fraudulent scheme to defraud members of the investing public by tendering an opinion of counsel to a transfer agent that wrongfully authorized it to remove the restrictive legend from the stock of a publicly traded company, resulting in the sale of unregistered stock in this company. (Rel. 34-60982; File No. 3-13682)
SEC Charges Ezra C. Levy, Former CFO of Investment Advisory Firm, With Fraud and Seeks Order Freezing His Assets
On Nov. 10, 2009, the Securities and Exchange Commission announced the filing of fraud charges against Ezra C. Levy, the former Chief Financial Officer of Boston Provident, L.P. According to the complaint filed in U.S. District Court for the Southern District of New York, Levy executed a fraudulent scheme to benefit himself at the expense of Boston Provident and its clients, by deliberately arranging secret sales of securities from his personal trading account to Boston Provident's accounts at inflated prices. Levy's profit from these fraudulent trades exceeded $537,000. The complaint alleges that Levy violated the antifraud provisions of the federal securities laws, specifically Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and seeks a permanent injunction against future violations, disgorgement of ill-gotten gains plus prejudgment interest and the imposition of civil penalties. As part of its action, Commission is seeking an order freezing Levy's assets.
The SEC acknowledges the assistance and cooperation of the U.S. Attorney's Office for the Southern District of New York. [SEC v. Ezra C. Levy, Civil Action No. 09-CV-9340 (DC) (S.D.N.Y.)] (LR-21289)
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