Promoters Fined By The S.E.C.

[marty_lewis]

I guess since I started the thread, I should be the first one to post.



SEC BRINGS LIMIT ORDER DISPLAY MANIPULATION CASE AGAINST ROBERT MONSKI

On May 3, the Commission entered a settled cease and desist order
against Robert J. Monski, a self-employed investor living in Birmingham,
Alabama. The order finds that between early October and mid-November
1997, Monski placed hundreds of small buy and sell limit orders
(typically the one-hundred share minimum necessary to trigger the
display requirement) to affect the National Best Bid or Offer (NBBO) of
thinly traded stocks. Monski used the change in the NBBO that resulted
from his limit order, as required by the Limit Order Display Rule, Rule
11Ac-4, to trigger execution of pre-existing, significantly larger "all
or none" limit orders he had placed on the other side of the market.
Monski intended to use small limit orders to move the NBBO quote to meet
the execution price of larger "all or none" limit orders which were
purposefully placed with one of the many brokers that guarantee
execution of customer orders of 1000 to 3000 shares at the NBBO
regardless of the size of the NBBO quote. After moving the bid or offer
quote to the desired price, Monski immediately attempted to cancel the
small order. In this manner, Monski manipulated the public quote to
obtain better execution prices for hundreds of orders.

The order finds that Monski's conduct, known in the industry as
"spoofing", violated the antifraud provisions, Section 17(a) of the
Securities Act of 1933 and Section 10(b) of the Securities Exchange Act
of 1934 and Rule 10b-5 thereunder. Without admitting or denying the
allegations, Monski consented to the entry of an order requiring him to
cease and desist from violating these provisions, and requiring him to
pay disgorgement and pre-judgment interest totaling $15,000. At the
same time, Monski consented to the entry of a final judgment in federal
court requiring him to pay a $10,000 civil penalty. [SEC v. Robert J.
Monski, Civ. Action No. 1:01CV00943, D.D.C.] (LR-16986); (Administrative
Proceedings Rels. - 33-7975; 34-44250; File No. 3-10465)

http://www.sec.gov/news/digest/05-03.txt