UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION
Securities Exchange Act of 1934
Release No. 42106 / November 4, 1999
Administrative Proceeding
File No. 3-10091
____________________________________
In the Matter of ORDER INSTITUTING PUBLIC
ADMINISTRATIVE PROCEEDINGS
LAWRENCE J. PENNA, AND OPINION AND ORDER
HERMAN EPSTEIN and PURSUANT TO SECTION 15(b)(6)
DOUGLAS J. MANGAN, OF THE SECURITIES EXCHANGE ACT
OF 1934
Respondents.
____________________________________
I.
The Securities and Exchange Commission ("Commission") deems it
appropriate and in the public interest to institute public
administrative proceedings against Lawrence J. Penna ("Penna"), Herman
Epstein ("Epstein") and Douglas J. Mangan ("Mangan"), pursuant to
Section 15(b)(6) of the Securities Exchange Act of 1934 ("Exchange
Act").
II.
In anticipation of the institution of the administrative proceedings,
Penna, Epstein, and Mangan have each submitted an Offer of Settlement
(the "Offers"), which the Commission has determined are in the public
interest to accept. Solely for the purpose of this proceeding, and any
other proceeding brought by or on behalf of the Commission or in which
the Commission is a party, prior to a hearing and without admitting or
denying the findings set forth herein, except as to jurisdiction and
the issuance of the injunction set forth in Section IV.e, below, which
they admit, Penna, Epstein and Mangan consent to the issuance of this
Order Instituting Public Administrative Proceedings and Opinion and
Order Pursuant to Section 15(b)(6) of the Exchange Act and to the
entry of the findings and the imposition of the remedial sanctions as
set forth below.
III.
Accordingly, it is ordered that said proceedings be, and hereby are,
SNIPPETS:
UNITED STATES OF AMERICA
SECURITIES AND EXCHANGE COMMISSION
The Securities and Exchange Commission deems it appropriate and in the public interest to
In anticipation of the institution of the administrative proceedings, Penna, Epstein, and
Order Pursuant to Section 15of the Exchange Act and to the entry of the findings and the
Accordingly, it is ordered that said proceedings be, and hereby are, instituted.
Penna, formerly known as Lawrence Joseph Pennacchio, age 55, resides in New York City.
During all relevant times, Penna was President and CEO of Investors Associates, Inc., and
During all relevant times, Investors Associates was a broker-dealer registered with the
Its corporate charter was revoked by the State of New Jersey on February 16, 1998, and its
The Complaint alleged that Penna and Epstein had Investors Associates co-underwrite
Before each offering, Penna and Epstein had undisclosed arrangements to acquire for Investors
Mangan oversaw the fraudulent activity at the Melville, New York branch office, Investors
Investors Associates and other broker-dealers coordinated their market-making activity to
Then Penna and Epstein sold these securities at a substantial profit, but at a discount to
Mangan purchased stock from Investors Associates' principal trading account which was penny
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