Securities and Exchange Commission
Washington, D.C.
Securities Exchange Act of 1934
Rel. No. 41989 / October 7, 1999
Admin. Proc. File No. 3-9276
In the Matter of the Application of
Coastline Financial, Inc.
and
Donald Allyson Williams
For Review of Action Taken by the
National Association of Securities Dealers, Inc.
Opinion of the Commission
Registered Securities Association - Review of Disciplinary Action
Fraud in the Offer and Sale of Securities
Registered broker-dealer and its principal made material misstatements
in connection with the offer and sale of securities. Held,
association's findings of violation are sustained in part and set
aside in part, and the sanctions it imposed are sustained.
Appearances
Gerald E. Boltz, Michelle D. Boydston and Thomas N. Fitzgibbon, of
Bryan Cave LLP, for Coastline Financial, Inc. and Donald Allyson
Williams.
Alden S. Adkins, Norman Sue, Jr., and Susan L. Beesley, for NASD
Regulation, Inc.
Appeal filed
April 8, 1997
Last brief received
July 1, 1997
I.
Coastline Financial, Inc. ("Coastline"), a member of the National
Association of Securities Dealers, Inc. ("NASD"), and Donald Allyson
Williams, its president and sole owner, (collectively, "Respondents")
appeal from NASD disciplinary action. The NASD found that Coastline,
SNIPPETS:
Securities and Exchange Commission
Donald Allyson Williams
For Review of Action Taken by the National Association of Securities Dealers,
Registered Securities Association - Review of Disciplinary Action
Registered broker-dealer and its principal made material misstatements in connection with the
Gerald E. Boltz, Michelle D. Boydston and Thomas N. Fitzgibbon, of Bryan Cave LLP, for
Coastline Financial, Inc., a member of the National Association of Securities Dealers, Inc.
The NASD found that Coastline, acting through Williams, made material misstatements and
This proceeding concerns Respondents' sale of certain promissory notes issued by Southern
Although the SCMA notes varied in face amount, annual interest rate, and term, their other
In late 1994, SCMA made two additional purchases of RFC zero-coupon bonds maturing in April
At the District Business Conduct Committee hearing, the NASD introduced copies of SCMA's
Respondents submitted into evidence nearly identical declarations signed by thirty-seven of
As to the security for the notes, each declaration states that the investor understood "that
The declarations state that investors attached no importance to the bonds because - t did not
The declarations could not be more clear that Respondent's customers thought they were buying
In the context of the SCMA notes, if the notes had been secured by zero coupon bonds or by
we set aside the NASD's finding of violation as to the statement that investors could
We have considered the applicable factors outlined in the NASD's Sanction Guidelines in
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