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1
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SEC COMMISSION OPINION
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EXTRACTED KEY WORDS
LYNCH EXCHANGE ACT DEALER COMMISSION VIOLATIONS SCHEME TRANSACTIONS PROCEEDING EXCESSIVE MARKUPS NON-BONA FIDE PRICES CUSTOMERS FIRST MONTAUK DAVID EXCHANGE ACT RULE BROKER-DEALER BOOKS DEFICIENCIES COMMITTING CIVIL MONEY PENALTY RESPONDENT FUTURE VIOLATIONS HOUSTON BRANCH OFFICE DISCLOSE EXCESSIVE MARKUPS PARKING SCHEME SUBSTANTIAL PECUNIARY GAIN RURAL ROUTE REMEDIAL ACTION RECORDKEEPING VIOLATIONS EFFECTED TRANSACTIONS |
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
SECURITIES EXCHANGE ACT OF 1934
Rel. No. 46439 / August 30, 2002
Admin. Proc. File No. 3-9440
_________________________________________________________________
In the Matter of
DAVID E. LYNCH
Rural Route #1
Box 200
Milam, Texas 75959
_________________________________________________________________
OPINION OF THE COMMISSION
BROKER-DEALER PROCEEDING
CEASE-AND-DESIST PROCEEDING
Grounds for Remedial Action
Failure to Disclose Excessive Markups
Charging Non-Bona Fide Prices of Securities
Aiding and Abetting Net Capital and Recordkeeping Violations
Respondent, an associated person and trader at a broker-dealer,
engaged in a scheme to "park" securities with other dealers. He
effected transactions at non-bona fide prices and charged undisclosed,
excessive markups to the firm's customers. As a result of this scheme,
the broker-dealer failed to maintain accurate books and records and
incurred numerous net-capital deficiencies. Held, it is in the public
interest that respondent be ordered to cease and desist from
committing or causing any violations or future violations of Section
17(a) of the Securities Act of 1933, Sections 10(b), 15(c), and 17(a)
of the Securities Exchange Act of 1934 and Exchange Act Rules 10b-5,
15c3-1, 17a-3, 17a-5, and 17a-11; be barred from association with any
broker or dealer; and pay a third-tier civil money penalty in the
amount of $100,000.
APPEARANCES
Teresa J. Verges, for the Division of Enforcement.
No appearance on appeal for David E. Lynch.
Appeal filed December 5, 2001
Last brief received January 22, 2002
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