UNITED STATES OF AMERICA
before the
SECURITIES AND EXCHANGE COMMISSION
SECURITIES EXCHANGE ACT OF 1934
Rel. No. 45107 / November 27, 2001
Admin. Proc. File No. 3-10428
_________________________________________________________________
In the Matter of the Application of
JOHN MONTELBANO
and
GERARD MCMAHON
For Review of Disciplinary Action Taken by the
NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC.
_________________________________________________________________
ORDER DENYING REQUESTS FOR WITHDRAWAL OF THE COMMISSION AND FOR A STAY
I.
On February 5, 2001, the National Association of Securities Dealers,
Inc. ("NASD") disciplined John Montelbano and Gerard McMahon, formerly
associated with Monitor Investment Group, Inc., ("Monitor") a former
member firm (collectively, the "Applicants"). On February 27, 2001,
Applicants sought Commission review of the NASD's disciplinary action.
Inaccordance with our briefing schedule order, Applicants filed joint
briefs on May 24, 2001 and on July 27, 2001.
By letter dated August 23, 2001, Applicants asked that the
Commissioners "withdraw themselves from reviewing the appeal in this
proceeding." Applicants assert that the Commission cannot provide a
"fair and impartial review." Applicants also renew their request for a
stay. The NASD has elected not to respond to Applicants' filing. We
have determined to deny both requests.
II.
Applicants' request that we withdraw from considering their appeal is
both untimely and unsupported. We previously have held that Section
556 of Title 5 of the United States Code, which governs the
disqualification of decision makers in administrative proceedings,
"contemplates that, before an agency determines the question of bias
involving a presiding officer, a good faith, timely and sufficient
SNIPPETS:
SECURITIES AND EXCHANGE COMMISSION
ORDER DENYING REQUESTS FOR WITHDRAWAL OF THE COMMISSION AND FOR A STAY
On February 5, 2001, the National Association of Securities Dealers, Inc. disciplined John
On February 27, 2001, Applicants sought Commission review of the NASD's disciplinary action.
Inaccordance with our briefing schedule order, Applicants filed joint briefs on May 24, 2001
The NASD has elected not to respond to Applicants' filing.
Applicants' request that we withdraw from considering their appeal is both untimely and
We previously have held that Section 556 of Title 5 of the United States Code, which governs
They waited for several months after they invoked our jurisdiction, and nearly a month after
At thattime, according to Applicants, the U.S. Attorney stated that the arrests resulted from
Courts repeatedly have held that the mere fact that an agency both investigates and
SEC, the court rejected petitioner's contention that, because the Commission had rejected his
To do so would manifest profound disrespect for Congress' deliberately structuring agencies
In FTC v. Cement Institute, the Federal Trade Commission issued a cease-and-desist order
One of the manufacturers complained that the FTC's prior investigation and report
The Supreme Court rejected this assertion, stating that "the fact that the had entertained
While we participated in an investigation with the NASD, among others, the NASD, not the
Our review of disciplinary sanctions imposed by self-regulatory organizations, like the NASD,
The NASD barred Montelbano from associating with any member firm in any capacity and imposed
Section 25of the Securities Exchange Act of 1934 instead provides that a "person aggrieved by
Applicants were only two of eighteen persons named in the complaint.
In Cement Institute, the Supreme Court refused to disqualify the entire membership of the
Applicants also claim that there were instances of prosecutorial misconduct by the Hearing
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