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SEC ADMINISTRATIVE PROCEEDING
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EXTRACTED KEY WORDS
PHILADELPHIA INVESTORS SECURITIES EXCHANGE ACT PARTNERSHIPS REGISTERED REPRESENTATIVES ORDER ALLEGES TRADING ADMINISTRATIVE PROCEEDINGS MICHAEL EXCHANGE COMMISSION CLARENCE SUPERVISE FIRM SALE LIMITED PARTNERSHIPS LOSSES SUCCESSFUL DISTRIBUTIONS ENFORCE POLICIES FRAUDULENT WARNING WRITTEN PROCEDURES BUSINESS ACTIVITIES OVERSIGHT PROCEDURES OFFERING IN-HOUSE PRODUCT COHEN DESPITE DISCIPLINARY HISTORY UNAUTHORIZED OPTIONS TRADING |
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Securities Exchange Act of 1934
Release No. 37743 / September 27, 1996
Administrative Proceeding
File No. 3-9114
ADMINISTRATIVE PROCEEDINGS INSTITUTED AGAINST PHILADELPHIA
INVESTORS, LTD. AND CLARENCE Z. WURTS
The Securities and Exchange Commission announced that
administrative proceedings pursuant to Sections 15(b) and 19(h)
of the Securities Exchange Act of 1934 ("Exchange Act") have been
instituted against Philadelphia Investors, Ltd. ("Philadelphia
Investors"), a registered broker-dealer, and Clarence Z. Wurts
("Wurts"), the owner, president and a principal of Philadelphia
Investors. The Commission's Order alleges that Philadelphia
Investors and Wurts failed to reasonably supervise Michael G.
Cohen ("Cohen"), a registered representative formerly associated
with the firm, in connection with Cohen's scheme to defraud
investors of approximately $500,000 through the sale of interests
in six limited partnerships.
The Order alleges that Cohen formed the partnerships to
invest in publicly traded securities and that his trading on
behalf of each partnership ultimately produced massive losses.
However, Cohen concealed the trading losses from investors by
creating fictitious monthly account statements and tax documents.
Cohen further created the appearance of successful trading by
sending investors periodic distributions consistent with the
reported, but fictitious, profits. The source of these
distributions was new investors funds raised from sales of
interests in successive limited partnerships. See U.S. v.
Michael G. Cohen, Criminal No. 95-421 (E.D. Pa.)(Cohen's criminal
conviction); In re Michael G. Cohen, Exch. Act Rel No. 34-37742
(September 27, 1996) (imposing comprehensive bar).
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