Initial Decision of an SEC Administrative Law Judge
H. J. Meyers & Co., Inc., Robert Setteducati, William Masucci, Michael
Vanechanos, and James Alan Villa
INITIAL DECISION RELEASE NO. 211
ADMINISTRATIVE PROCEEDING
FILE NO. 3-10140
UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
_________________________________________________________________
In the Matter of
H.J. MEYERS & CO., INC.,
ROBERT SETTEDUCATI,
WILLIAM MASUCCI,
MICHAEL VANECHANOS, and
JAMES ALAN VILLA.
_________________________________________________________________
INITIAL DECISION
August 9, 2002
APPEARANCES John E. Birkenheier, Joy M. Boddie, Charles J. Kerstetter,
and Sean E. Kreiger for the Division of Enforcement, Securities and
Exchange Commission.
Thomas M. Knepper for Respondent.
BEFORE James T. Kelly, Administrative Law Judge
The Securities and Exchange Commission (SEC or Commission) issued its
Order Instituting Proceedings (OIP) on February 7, 2000, pursuant to
Section 8A of the Securities Act of 1933 (Securities Act) and Sections
15(b), 19(h), and 21C of the Securities Exchange Act of 1934 (Exchange
Act).
The OIP focuses on events that occurred during June 1996, when Robert
Setteducati (Setteducati) was the executive vice president of H.J.
Meyers & Co., Inc. (HJM), a registered broker and dealer. On June 24,
1996, HJM was the lead underwriter for an initial public offering
(IPO) of the common stock of Borealis Technology Corporation
(Borealis). In relevant part, the OIP alleges that, from June 24,
1996, through June 28, 1996, HJM, acting through Setteducati and
SNIPPETS:
Initial Decision of an SEC Administrative Law Judge
H. J. Meyers & Co., Inc., Robert Setteducati, William Masucci, Michael Vanechanos, and James
SECURITIES AND EXCHANGE COMMISSION
H.J. MEYERS & CO., INC., ROBERT SETTEDUCATI, WILLIAM MASUCCI,
JAMES ALAN VILLA.
The Securities and Exchange Commission issued its Order Instituting Proceedings (OIP) on
On June 24, 1996, HJM was the lead underwriter for an initial public offering (IPO) of the
In relevant part, the OIP alleges that, from June 24, 1996, through June 28, 1996, HJM,
The OIP charges that Setteducati and another HJM official orchestrated the allocation of the
e and prevent non-favored customers from "flipping" their IPO shares in the immediate aftermarket.
In March 1995, TJA acquired HJM, a broker and dealer with a main office in Beverly Hills,
Paragraph II.G of the OIP alleges that the settlements in two regulatory actions against TJA,
The Commission alleged that, in connection with the underwriting of the IPOs of four
On July 15, 1996-three weeks after the Borealis IPO that is the subject of this
Setteducati began his career as a registered representative in a Florida branch office of TJA.
OIP ¶ II.J charges that the allocation "was made for the purpose of" enhancing HJM's "control
He also added the overallotment option and included a 20% allocation to the selling group, as
The Division's case was not designed to show that sales fraud occurred, but rather to
The Division does not claim that there is anything per se wrong with the penalty bid.
To prevail under Section 17of the Securities Act, Section 10of the Exchange Act, and Rule
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