UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
Litigation Release No. 16631 / July 19, 2000
U.S. Securities and Exchange Commission v. JWGenesis Financial, Inc.,
United States District Court for the District of Columbia, Civil
Action No. 00-1706
In connection with a cease-and-desist order issued by the Commission
today in a settled proceeding against JWGenesis Financial, Inc,
formerly known as JW Charles Financial Services, Inc. ("JW Charles"),
the Commission filed a related action for civil penalties against JW
Charles in the United States District Court for the District of
Columbia. In settlement of that matter, JW Charles has consented to
the entry of a final judgment ordering it to pay a civil penalty of
$20,000.
In the cease-and desist order, In the Matter of JW Charles Financial,
Inc. (34-43053), the Commission found that JW Charles violated Section
13(d) of the Securities Exchange Act of 1934 ("Exchange Act"), and
Exchange Act Rules 13d-1 and 13d-2, by failing to file a Schedule 13D
upon the acquisition of more than five percent of the outstanding
shares of The Americas Growth Fund, a closed-end business development
company ("AGRO"), and by failing to file timely amendments to a
Schedule 13D it did file as its holdings of AGRO common stock
increased to over 25 percent.
In its cease-and-desist order, the Commission found, and in its
Complaint the Commission alleges, the following
In 1994, JW Charles was the principal underwriter of the initial
public offering of AGRO common stock. From the onset of aftermarket
trading, JW Charles's broker-dealer subsidiary, JW Charles Clearing
Corp. ("JWCC"), was the principal market-maker for the stock. Until
December 1996, JWCC held a position in AGRO stock consistent with
typical market making practice, ending each day with no AGRO stock, or
a small long or short position.
In December 1996, JW Charles, through JWCC, acquired a position in
AGRO shares far in excess of any it had obtained previously. While at
the end of November 1996, JWCC owned 450 shares of AGRO common stock,
by the end of December, it owned 167,125 AGRO shares, 13.2% of the
total outstanding. These shares were obtained through JWCC
consistently maintaining the high bid for AGRO.
On January 10, 1997, JWCC, holding 171,525 AGRO shares (13.56% of the
amount outstanding) beneficially owned by JW Charles, filed a Schedule
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
In connection with a cease-and-desist order issued by the Commission today in a settled
In settlement of that matter, JW Charles has consented to the entry of a final judgment
In the cease-and desist order, In the Matter of JW Charles Financial, Inc., the Commission
stock increased to over 25 percent.
In its cease-and-desist order, the Commission found, and in its Complaint the Commission
JW Charles was the principal underwriter of the initial public offering of AGRO common stock.
From the onset of aftermarket trading, JW Charles's broker-dealer subsidiary, JW Charles
Until December 1996, JWCC held a position in AGRO stock consistent with typical market making
In December 1996, JW Charles, through JWCC, acquired a position in AGRO shares far in excess
While at the end of November 1996, JWCC owned 450 shares of AGRO common stock, by the end of
JW Charles violated Section 13of the Exchange Act, and Rule 13d-1 thereunder, by not filing a
Although JWCC filed a Schedule 13G in January 1997, it was ineligible to do so, as the AGRO
JWCC did not amend its March 11 "voluntary" Schedule 13D to reflect each instance it acquired
Without admitting or denying the allegations in the Commission's Complaint and the
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