SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
SECURITIES EXCHANGE ACT OF 1934
Rel. No. 40600 / October 26,1998
Admin. Proc. File No. 3-9195
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:
In the Matter of the Applications of :
:
STEVEN P. SANDERS :
13-28 208th Place :
Bayside, New York 11360 :
:
and :
:
DANIEL M. PORUSH :
Two Bayclub Drive :
Bayside, New York 11360 :
:
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
Violations of Rules of Fair Practice
Excessive and Fraudulent Markups
Failure to Supervise
Head trader of member firm of registered securities
association was responsible for excessive and fraudulent
markups, and firm's president failed to comply with
supervisory requirements. Held, association's findings of
violation and sanctions it imposed sustained.
APPEARANCES:
Andrew M. Zeitlin and Martin P. Unger, of Tenzer Greenblatt
LLP, for Steven Sanders.
Charles A. Stillman and Michael J. Grudberg, of Stillman &
SNIPPETS:
SECURITIES AND EXCHANGE COMMISSION
For Review of Disciplinary Action Taken by the:
Excessive and Fraudulent Markups
Head trader of member firm of registered securities
Andrew M. Zeitlin and Martin P. Unger, of Tenzer Greenblatt LLP, for Steven Sanders.
Alden S. Adkins and Norman Sue, Jr., for NASD Regulation, Inc.
Steven P. Sanders, the former manager of the trading department at Stratton Oakmont, Inc.,
The NASD found that Stratton, acting through Sanders, charged excessive and fraudulent
Each unit consisted of one share of common stock, one Class A warrant, and one Class B
The warrants were exercisable one year after the offering date and entitled the holder,
Stratton sold 1,623,500 of the Glazier units, 78% of the total number of units issued, to the
Porush, who shared responsibility for allocating the Glazier IPO to Stratton's sales
Additional units were flipped shortly after trading in the aftermarket began at prices of
In addition to obtaining units from its retail customers, the Firm, during the first five
Sanders, as Stratton's head trader, was responsible for executing these trades.
Stratton bought or sold 4,829,650 Class B warrants in wholesale and retail transactions,
Based on these factors, we conclude that Stratton controlled the Glazier market and that,
Although several other dealers identified themselves as market makers in Glazier warrants,
3of the Securities Exchange Act of 1934.
This report was submitted as part of applicants' appeal of the decision of the NASD's
We now turn to the question of whether Porush should be held liable for supervisory failings
Its compliance manual contained a section titled "Fair Prices" which briefly summarized some
Respondents complain that the sanctions are excessive.
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