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SEC ADMINISTRATIVE PROCEEDING
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EXTRACTED KEY WORDS
SUPERVISION DALE FREY DIVISION ALLEGES RAWLINGS FIRM DISCIPLINARY HISTORY SECURITIES ACT COLORADO PIONTEK CHIEF EXECUTIVE OFFICER UNSUITABLE TRADING ACCOUNTS TRANSACTIONS BROKER-DEALER CUSTOMER RESPONDENT CLIENTS COMMISSION EXCHANGE ACT ADMINISTRATIVE PROCEEDING PRESIDENT COLORADO SPRINGS OPTIONS TRANSACTIONS ACCORDING HEIGHTENED SUPERVISION ADEQUATE REVIEW COMPLIANCE |
UNITED STATES SECURITIES AND EXHANGE COMMISSION
SECURITIES ACT OF 1933
Release No. 7901 / September 26, 2000
SECURITIES EXCHANGE ACT OF 1934
Release No. 43356 / September 26, 200
ADMINISTRATIVE PROCEEDING
File No. 3-10310
Proceedings Instituted Against Dale E. Frey and Roger A. Rawlings for
Failure to Supervise and Against William C. Piontek for Fraud
The Commission instituted administrative proceedings against Dale E.
Frey, president and chief executive officer of D.E. Frey and Company,
Inc., a broker-dealer located in Denver, Colorado, and against Roger
A. Rawlings, a registered principal of the broker-dealer's branch
office in Colorado Springs. The Division of Enforcement alleges that
between 1995 and 1999, three registered representatives at the firm,
each of whom had a disciplinary history or history of customer
complaints, engaged in unsuitable trading, unauthorized trading and
churning in customer accounts. One registered representative named as
a respondent in the proceedings, William C. Piontek of Atlanta,
Georgia, made unsuitable trade recommendations involving sophisticated
options transactions to his customers who were not approved for the
transactions. The Division alleges that Dale Frey failed reasonably to
supervise Piontek and two other registered representatives and that
Rawlings failed reasonably to supervise one of the registered
representatives located in Colorado Springs.
The Division alleges that Piontek made unsuitable trade
recommendations involving options transactions to two D.E. Frey
clients who were not approved for the transactions, had not completed
options agreements, and had stated investment objectives including
preservation of capital and avoidance of risk. The Division alleges
that, through his unsuitable trading in the two client accounts,
Piontek willfully violated Section 17(a) of the Securities Act of 1933
("Securities Act") and Section 10(b) of the Securities Exchange Act of
1934 ("Exchange Act") and Rule 10b-5 thereunder.
According to the Division, Dale Frey failed to develop a system for
implementing the supervisory procedures of the firm, including failing
to devote adequate resources to such a system. As president, chief
executive officer and head of the hiring review committee for the
firm, Dale Frey prepared, reviewed and/or approved the firm's
supervisory and compliance procedures. The Division alleges that Dale
Frey knew that the firm lacked a system to implement the procedures
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