Securities and Exchange Commission
Litigation Release No. 17595 / July 1, 2002
Securities and Exchange Commission v. W.J. Nolan & Co., Inc., (U.S.D.C. D.C., Case Number 1: 02CV00044, filed January 8, 2002).
The Securities and Exchange Commission announced that on June 11, 2002, the Honorable Reggie B. Walton entered an Agreed Order resolving the Commission's Application for an Order Directing Compliance with an Order of the Securities and Exchange Commission Under Section 21(e)(1) of the Securities Exchange Act of 1934 and requiring W.J. Nolan & Co., Inc. to comply with the Commission's Order and pay $192,028.29 in disgorgement and prejudgment interest within ten days of the entry of the Court's Order. The Commission's Application, filed on January 8, 2002, alleged that W.J. Nolan failed to comply with the Commission's September 24, 2001 Order Instituting Proceedings, Making Findings and Imposing Remedial Sanctions, which among other things, required W.J. Nolan to pay disgorgement and prejudgment interest in the amount of $192,028.29 within 30 days of the entry of the order. As part of W.J. Nolan's settlement with the Commission regarding its alleged violations of the federal securities laws, W.J. Nolan had previously consented to the entry of the order without admitting or denying the Commission's findings.
In its September 24, 2001 order, the Commission also found that between April and November 1997, ten registered representatives at W.J. Nolan's offices located in Chicago, Illinois and on Park Avenue in New York engaged in a pattern of sales practice abuses, including churning customer accounts and making unauthorized and unsuitable trades in microcap and penny stocks. In addition, the Commission found that W.J. Nolan did not have in place a system of supervision reasonably designed to prevent and detect sales practices violations by the registered representatives in its Chicago and Park Avenue offices. As a result of this conduct, the Commission Order found that Defendant W.J. Nolan failed reasonably to supervise individuals subject to its supervision with the meaning of Section 15(b)(4) of the Exchange Act and willfully violated Sections 15(b)(7) and 15(g) of the Exchange Act and Rules 15b7-1, 15g-2, 15g-3 and 15g-6 promulgated thereunder.
For further information, see LR-17324 (January 16, 2002).