SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
Litigation Release No. 15151 / November 5, 1996
SECURITIES AND EXCHANGE COMMISSION v. FREDERICK AUGUSTUS MORAN,
ET AL., 95 Civ. 4472 (BN) (S.D.N.Y. June 15, 1995)
On November 1, 1996, Judge Bernard Newman, sitting by
designation in the United States District Court for the Southern
District of New York, issued a 22-page Opinion ordering that
defendants Frederick Augustus Moran ("Moran Sr.") and Moran Asset
Management, Inc. be permanently enjoined from violating Section
206(2) of the Investment Advisers Act of 1940 ("Advisers Act"),
Section 204 of the Advisers Act and Rule 204-1(b)(1) thereunder,
and Section 207 of the Advisers Act. Judge Newman also ordered
that defendants Moran Sr. and Moran & Associates, Inc. Securities
Brokerage ("Moran & Associates") be permanently enjoined from
violating Section 15(b) of the Securities Exchange Act of 1934
("Exchange Act") and Rule 15b3-1 thereunder. The Judge ordered
Moran Sr. to disgorge $9551.17 plus prejudgment interest to the
United States Treasury and pay a civil money penalty of $25,000;
that Moran Asset Management pay a civil money penalty of $50,000;
and that Moran & Associates pay a civil money penalty of $25,000.
Judge Newman incorporated his previous findings, issued in
an April 2, 1996 Opinion, finding that Moran Sr. violated Section
206(2) of the Advisers Act, breached his fiduciary duty and
defrauded his investment advisory clients by placing his personal
interest ahead of the interest of those clients, when he
allocated shares of Liberty Media Communications purchased in
advance of the announcement of the Bell Atlantic/TCI/Liberty
merger to his personal and family accounts while allocating
shares of those securities purchased at higher prices to his
clients. The Court also found that Moran Sr. violated Sections
204 and 207 of the Advisers Act and Rule 204-1(b)(1), and Section
15(b) of the Exchange Act and Rule 15b3-1 by failing to disclose
that his sons Frederick W. Moran and Clayton Moran were directors
of Moran Asset Management and Moran & Associates.
In Friday's Opinion, Judge Newman found explicitly that
Moran Sr.'s violation of Section 206(2) of the Advisers Act
SNIPPETS:
SECURITIES AND EXCHANGE COMMISSION v. FREDERICK AUGUSTUS MORAN, ET AL., 95 Civ.
On November 1, 1996, Judge Bernard Newman, sitting by designation in the United States
206of the Investment Advisers Act of 1940, Section 204 of the Advisers Act and Rule
Judge Newman also ordered that defendants Moran Sr.
Inc. Securities Brokerage be permanently enjoined from violating Section 15of the Securities
to disgorge $9551.17 plus prejudgment interest to the United States Treasury and pay a civil
Judge Newman incorporated his previous findings, issued in an April 2, 1996 Opinion, finding
violated Section 206of the Advisers Act, breached his fiduciary duty and defrauded his
The Court also found that Moran Sr.
violated Sections 204 and 207 of the Advisers Act and Rule 204-1, and Section 15of the
Judge Newman found explicitly that Moran Sr.'s violation of Section 206of the Advisers Act
The Court criticized Moran Sr.
for attempting "to trivialize his violations of law" and rejected Moran Sr.'s claim that he
vendetta than the fact that Moran Sr.
See also Litigation Release No. 14532 and Litigation Release No. 14861.
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