Open Meeting Agenda
|Item 1:||John A. Carley, Eugene C. Geiger, Thomas A. Kaufmann, Edward H. Price, and Christopher H. Zacharias|
Office: Office of the General Counsel
Staff: Joan Loizeaux, David Tess and Ben Schiffrin
The Commission will hear oral argument on an appeal by John A. Carley, Eugene C. Geiger, Thomas A. Kaufmann, Edward H. Price, and Christopher H. Zacharias from an initial decision of an administrative law judge.
Carley and Zacharias were officers and directors of Starnet Communications International, Inc. Geiger and Kaufmann were associated persons of Spencer Edwards, Inc., a registered broker-dealer. Price was president, chief executive officer, and chief compliance officer of Spencer Edwards and supervised Geiger and Kaufmann.
The law judge found that Carley and Zacharias violated, and Geiger and Kaufmann willfully violated, Sections 5(a) and 5(c) of the Securities Act of 1933 by offering to sell, selling, and delivering to members of the public shares of Starnet common stock when no registration statement was filed or in effect with respect to those securities and no exemption from registration was available. The law judge found that Price failed reasonably to supervise Geiger and Kaufmann. The law judge found further that Carley and Zacharias violated the antifraud provisions of the securities laws by filing with the Commission false and misleading current and annual reports. The law judge also found that Zacharias violated Section 16(a) of the Securities Exchange Act of 1934 and Exchange Act Rule 16a-3 by failing to file a required Form 4.
The law judge imposed cease-and-desist orders on Carley, Zacharias, Geiger, and Kaufmann, barred Geiger and Kaufmann from associating with any broker or dealer, and barred Price from associating with any broker or dealer in a supervisory capacity. The law judge ordered Carley and Zacharias each to disgorge an amount representing payments made to them in connection with their unregistered sale of shares of Starnet common stock. The law judge also ordered Geiger and Kaufmann each to disgorge fifty percent of the net commissions that they earned on all Starnet trades attributable to their joint account number at Spencer Edwards from January 1999 through February 2001. The law judge imposed penalties of $400,000 against Geiger, $300,000 against Kaufmann, and $150,000 against Price.
Carley, Zacharias, Geiger, Kaufmann, and Price appeal the law judge's findings of violation and the sanctions imposed by the law judge.
For further information, please contact the Office of the Secretary at (202) 551-5400.
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