SECURITIES AND EXCHANGE COMMISSION
Washington D.C.
SECURITIES EXCHANGE ACT OF 1934
Rel. No. 42356 / January 24, 2000
Admin. Proc. File No. 3-9684
In the Matter of the Application of
John A. Chepak
c/o Jenice L. Malecki, Esq.
Singer Frumento, LLP
40 Exchange Place, 20th Floor
New York, New York 10005
For Review of Disciplinary Action taken by the
National Association of Securities Dealers, Inc.
Opinion of the Commission
Registered Securities Association -
Review of Disciplinary Proceedings
Violation of Conduct Rules
Failure to Establish, Maintain, and Enforce Supervisory Procedures
Compliance officer failed to establish, maintain, and enforce
supervisory procedures reasonably designed to achieve compliance with
applicable NASD Rules. , association's findings of violation and
assessment of sanctions
Appearances
Audra A. Acquavella and Bill T. Singer, of Singer Frumento, LLP, for
John A. Chepak.
Shirley H. Weiss, for NASD Regulation, Inc.
Appeal filed
August 24, 1998
Last brief filed
November 19, 1998
SNIPPETS:
SECURITIES AND EXCHANGE COMMISSION
Washington D.C.
John A. Chepak c/o Jenice L. Malecki,
Singer Frumento, LLP
Registered Securities Association Review of Disciplinary Proceedings
Compliance officer failed to establish, maintain, and enforce supervisory procedures
Audra A. Acquavella and Bill T. Singer, of Singer Frumento, LLP, for John A. Chepak.
John A. Chepak, a former registered general securities representative, general securities
This appeal involves Chepak's actions when he was Director of Compliance at Thomas James.
At issue are whether Chepak, who was responsible for establishing and maintaining the firm's
In the spring of 1990, before Chepak joined Thomas James, the Commission filed an action
The Compliance Department's responsibilities at Thomas James were extensive, including the
The Supervisory Manual also failed to establish mechanisms to identify violations of these
Thus, NASD Conduct Rule 3010 requires member firms to establish, maintain, and enforce a
NASD Rule 3010requires member firms to designate appropriately registered principals to carry
Yesawich retained Philip McMorrow as his "oversight consultant" to provide technical
Chepak, nonetheless, claims that he reasonably believed that McMorrow instructed him not to
Chepak cites two cases that he asserts make clear that recommendations by court-appointed
Chepak believes that the sanctions assessed against him are "erroneous, excessive, arbitrary,
In accordance with Section 19of the Securities Exchange Act of 1934, we must determine if the
Moreover, despite his praise of Chepak, McMorrow also questioned the reasonableness of
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