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SEC LITIGATION RELEASE
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EXTRACTED KEY WORDS
BROKERAGE BOUCHY WHELAN EXCHANGE COMMISSION FEDERAL SECURITIES LAWS COURT ARIZONA BROKERS FUTURE VIOLATIONS COMPLAINT BROKERAGE FIRM IPO SECURITIES BRETT RICHARD SECURITIES FRAUD MANIPULATION DISTRICT JUDGEMENT DEFENDANT PERMANENT CIVIL PENALTY CLIENTS DISCLOSING PROFIT NOMINEE ACCOUNTS OFFERING SALES ACT DISGORGEMENT THEREUNDER |
U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 16943 / March 23, 2001
SECURITIES AND EXCHANGE COMMISSION v. BRETT L. BOUCHY AND RICHARD C.
WHELAN, Case No. CIV-96-2629-PHX-SRB (D. Ariz.)
FEDERAL COURT FINDS 2 ARIZONA BROKERS LIABLE FOR SECURITIES FRAUD AND
MANIPULATION AFTER 5-DAY COURT TRIAL
The Securities and Exchange Commission ("Commission") announced that
on March 22, 2001, the United States District Court for the District
of Arizona, issued a judgment against two Arizona brokers whom the
Commission charged with committing securities fraud and market
manipulation. The two defendant brokers are Brett L. Bouchy
("Bouchy"), 33, and Richard C. Whelan ("Whelan"), 36, both now
residing in Florida. The Court's judgment permanently enjoins the
defendants from future violations of the federal securities laws and
assesses a $50,000 civil penalty against each of them.
The Commission's complaint alleged that Bouchy and Whelan (1) received
undisclosed side payments for their stock recommendations to their
brokerage customers; (2) stole funds from one of their clients; (3)
fraudulently sold this same client securities without disclosing that
they (Bouchy and Whelan) owned the securities personally and that they
would earn about a 200% profit from the transaction; and (4) used
nominee accounts to profit from the false closing of a public
securities offering.
The Complaint further alleged that Bouchy and Whelan failed to
disclose material facts in connection with an initial public offering
("IPO") they ran through a brokerage firm they controlled, namely (1)
that the IPO securities would be placed in a nominee account; and (2)
that the brokerage firm would restrict retail sales of the IPO
securities by instituting a no net sales policy. The Complaint also
alleged that the brokerage firm solicited aftermarket orders before
the IPO itself took place.
The Commission's enforcement action sought permanent injunctions from
future violations of the antifraud and antimanipulation provisions of
the federal securities laws, disgorgement and civil penalties against
Bouchy and Whelan for their violations of Section 17(a) of the
Securities Act of 1933, Section 10(b) of the Securities Exchange Act
of 1934 and Rules 10b-5, 10b-6 and 10b-9 thereunder.
_________________________________________________________________
Modified 03/23/2001
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