UNITED STATES OF AMERICA Before the SECURITIES AND EXCHANGE COMMISSION SECURITIES EXCHANGE ACT OF 1934 Release No. 55778 / May 17, 2007 ADMINISTRATIVE PROCEEDING File No. 3-12637 In the Matter of Michael Edward Zimmerman, Respondent. ORDER INSTITUTING ADMINISTRATIVE PROCEEDINGS PURSUANT TO SECTION 15(b) OF THE SECURITIES EXCHANGE ACT OF 1934, MAKING FINDINGS, AND IMPOSING REMEDIAL SANCTIONS I. The United States Securities and Exchange Commission (the “Commission”) deems it appropriate and in the public interest that public administrative proceedings be, and hereby are, instituted pursuant to Section 15(b) of the Securities Exchange Act of 1934 (“Exchange Act”) against Michael Edward Zimmerman (“Zimmerman” or “Respondent”). II. In anticipation of the institution of these proceedings, Respondent has submitted an Offer of Settlement (the “Offer”) which the Commission has determined to accept. Solely for the purpose of these proceedings and any other proceedings brought by or on behalf of the Commission, or to which the Commission is a party, and without admitting or denying the findings herein, except as to the Commission’s jurisdiction over him and the subject matter of these proceedings, and the findings contained in Section III.2 below, which are admitted, Respondent consents to the entry of this Order Instituting Administrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934, Making Findings, and Imposing Remedial Sanctions (“Order”), as set forth below. III. On the basis of this Order and Respondent’s Offer, the Commission finds that: 1. From April 2004 through April 2005, Zimmerman was a 50 percent stockholder of Z-Par Holdings, Inc., as well as a director of Z-Par Investment Fund II, LLC. Zimmerman associated with Wellstone Securities LLC, which is a Georgia-based broker-dealer and investment advisor registered with the NASD, in connection with the marketing and sales of investments in a prime bank security trading program through Z-Par Investment Fund II, LLC. Zimmerman, 38 years old, is a resident of Jefferson, Maryland. 2. On April 26, 2006, a final judgment was entered by consent against Zimmerman, permanently enjoining him from future violations of Section 17(a) of the Securities Act of 1933, and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, in the civil action entitled United States Securities & Exchange Commission v. Z-Par Holdings, Inc., et al., Civil Action Number 05cv1031, in the United States District Court for the District of Maryland, Baltimore Division. 3. The Commission’s complaint alleged that from at least April 2004 to April 2005, Zimmerman marketed a fraudulent prime bank investment scheme in which he raised approximately $8.2 million from eleven investors in Florida and others elsewhere throughout the United States. The complaint also alleged that Zimmerman fraudulently represented to investors that their funds would be pooled with those of other investors in $1 million lots for the purchase of “debt obligations of the top 50 banks in the world,” which would be safe and secure investments yielding high rates of return. The complaint further alleged that Zimmerman fraudulently sold interests in fictitious prime bank debt instruments and payment obligations, claiming that they carried a financial insurance guarantee that wraps the debt obligations to further enhance their value and lower their risks from any default. The complaint further alleged that in furtherance of the fraudulent scheme, Zimmerman sent investor funds to third-parties who, unbeknownst to Zimmerman, used the funds to purchase precious metals on margin. IV. In view of the foregoing, the Commission deems it appropriate and in the public interest to impose the sanctions agreed to in Respondent Zimmerman’s Offer. Accordingly, it is hereby ORDERED: Pursuant to Section 15(b)(6) of the Exchange Act, that Respondent Zimmerman be, and hereby is barred from association with any broker or dealer, with the right to reapply for association after five years to the appropriate self-regulatory organization, or if there is none, to the Commission; Any reapplication for association by the Respondent will be subject to the applicable laws and regulations governing the reentry process, and reentry may be conditioned upon a number of factors, including, but not limited to, the satisfaction of any or all of the following: (a) any disgorgement ordered against the Respondent, whether or not the Commission has fully or partially waived payment of such disgorgement; (b) any arbitration award related to the conduct that served as the basis for the Commission order; (c) any self-regulatory organization arbitration award to a 2 customer, whether or not related to the conduct that served as the basis for the Commission order; and (d) any restitution order by a self-regulatory organization, whether or not related to the conduct that served as the basis for the Commission order. By the Commission. Nancy M. Morris Secretary 3
UNITED STATES OF AMERICA Before the SECURITIES AND EXCHANGE COMMISSION SECURITIES EXCHANGE ACT OF 1934 Release No. 55779 / May 17, 2007 ADMINISTRATIVE PROCEEDING File No. 3-12638 In the Matter of Larry Michael Parrish, Respondent. ORDER INSTITUTING ADMINISTRATIVE PROCEEDINGS PURSUANT TO SECTION 15(b) OF THE SECURITIES EXCHANGE ACT OF 1934, MAKING FINDINGS, AND IMPOSING REMEDIAL SANCTIONS I. The United States Securities and Exchange Commission (the “Commission”) deems it appropriate and in the public interest that public administrative proceedings be, and hereby are, instituted pursuant to Section 15(b) of the Securities Exchange Act of 1934 (“Exchange Act”) against Larry Michael Parrish (“Parrish” or “Respondent”). II. In anticipation of the institution of these proceedings, Respondent has submitted an Offer of Settlement (the “Offer”) which the Commission has determined to accept. Solely for the purpose of these proceedings and any other proceedings brought by or on behalf of the Commission, or to which the Commission is a party, and without admitting or denying the findings herein, except as to the Commission’s jurisdiction over him and the subject matter of these proceedings, and the findings contained in Section III.2 below, which are admitted, Respondent consents to the entry of this Order Instituting Administrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934, Making Findings, and Imposing Remedial Sanctions (“Order”), as set forth below. III. On the basis of this Order and Respondent’s Offer, the Commission finds that: 1. From April 2004 through April 2005, Parrish was a 50 percent stockholder of Z-Par Holdings, Inc., as well as a director of Z-Par Investment Fund II, LLC. Parrish associated with Wellstone Securities LLC, which is a broker-dealer and an investment advisor registered with the NASD, in connection with the marketing and sales of investments in a prime bank security trading program through Z-Par Investment Fund II, LLC. Parrish, 42 years old, is a resident of Frederick, Maryland. 2. On April 26, 2007, a final judgment was entered by consent against Parrish, permanently enjoining him from future violations of Section 17(a) of the Securities Act of 1933, and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, in the civil action entitled United States Securities & Exchange Commission v. Z-Par Holdings, Inc., et al., Civil Action Number 05cv1031, in the United States District Court for the District of Maryland, Baltimore Division. 3. The Commission’s complaint alleged that from at least April 2004 to April 2005, Parrish marketed a fraudulent prime bank investment scheme in which he raised approximately $8.2 million from eleven investors in Florida and others elsewhere throughout the United States. The complaint also alleged that Parrish fraudulently represented to investors that their funds would be pooled with those of other investors in $1 million lots for the purchase of “debt obligations of the top 50 banks in the world,” which would be safe and secure investments yielding high rates of return. The complaint further alleged that Parrish fraudulently sold interests in fictitious prime bank debt instruments and payment obligations, claiming that they carried a financial insurance guarantee that wraps the debt obligations to further enhance their value and lower their risks from any default. The complaint further alleged that in furtherance of the fraudulent scheme, Parrish sent investor funds to third-parties who, unbeknownst to Parrish, used the funds to purchase precious metals on margin. IV. In view of the foregoing, the Commission deems it appropriate and in the public interest to impose the sanctions agreed to in Respondent Parrish’s Offer. Accordingly, it is hereby ORDERED: Pursuant to Section 15(b)(6) of the Exchange Act, that Respondent Parrish be, and hereby is barred from association with any broker or dealer with the right to reapply for association after five years to the appropriate self-regulatory organization, or if there is none, to the Commission; Any reapplication for association by the Respondent will be subject to the applicable laws and regulations governing the reentry process, and reentry may be conditioned upon a number of factors, including, but not limited to, the satisfaction of any or all of the following: (a) any disgorgement ordered against the Respondent, whether or not the Commission has fully or partially waived payment of such disgorgement; (b) any arbitration award related to the conduct that served as the basis for the Commission order; (c) any self-regulatory organization arbitration award to a 2 customer, whether or not related to the conduct that served as the basis for the Commission order; and (d) any restitution order by a self-regulatory organization, whether or not related to the conduct that served as the basis for the Commission order. By the Commission. Nancy M. Morris Secretary 3
UNITED STATES OF AMERICA Before the SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 CORRECTED COPY SECURITIES EXCHANGE ACT of 1934 Release No. 55782/May 17, 2007 ADMINISTRATIVE PROCEEDING File No. 3-12612 ___________________________________ In the Matter of JOSEPH DEPERGOLA : : : : : ORDER MAKING FINDINGS AND IMPOSING SANCTION BY DEFAULT ___________________________________ The Securities and Exchange Commission (Commission) initiated this proceeding on April 10, 2007, pursuant to Section 15(b) of the Securities Exchange Act of 1934 (Exchange Act). Respondent Joseph Depergola (Depergola) was served with the Order Instituting Proceedings (OIP) on April 13, 2007, and his Answer was due twenty days after service. On May 3, I ordered Depergola to file an Answer by May 11, or else he would be found in default. Depergola has not filed an Answer to the OIP and he has not responded to the May 3, 2007, Order. Accordingly, I find Depergola to be in default and the allegations in the OIP to be true. 17 C.F.R. §§ 201.155, .220(f). Findings From December 2000 to May 2001 (the relevant period), Depergola, who is thirty-nine years of age, was a registered representative associated with Valley Forge Securities, Inc. (Valley Forge), a broker-dealer registered with the Commission pursuant to Section 15(b) of the Exchange Act. On October 18, 2005, Depergola pled guilty to one count of conspiracy to commit securities fraud. United States v. Joseph Depergola, No. 05 Cr. 748 (D.N.J.). The sole count of the criminal information to which Depergola pled guilty alleged, among other things, that Depergola participated in a scheme while employed at Valley Forge to manipulate the price of Select Media Communications, Inc., and to receive undisclosed, excessive commissions from the sales of stocks while employed at Valley Forge. Conclusions Where a person was associated with a broker-dealer at the time of conduct that resulted in a conviction of an offense specified in Exchange Act § 15(b)(4) the Commission is authorized to censure, place limitations on the activities or functions of such person, or suspend for a period not exceeding twelve months, or bar such person from being associated with a broker or dealer, if the Commission finds that such a sanction is in the public interest. The public interest determination is broader than simply whether the person committed the violations. Blinder, Robinson & Co., Inc., 837 F.2d 1099 (D.C. Cir. 1988). It is settled that the public interest criteria are those set out in Steadman, 603 F.2d 1126, 1140 (5th Cir. 1979), aff’d on other grounds, 450 U.S. 91 (1981); Orlando Joseph Jett, 82 SEC Docket 1211, 1260-61 (Mar. 5, 2004); KPMG Peat Marwick LLP, 54 S.E.C. 1135, 1183-84 (2001), reh’g denied, 55 S.E.C. 1 (2001), pet. denied, 289 F.3d 109 (D.C. Cir. 2002). The facts that Depergola’s violations occurred over a five-month period and resulted in a criminal conviction demonstrate that his conduct was recurrent, egregious, and that he acted with scienter. There is no evidence that Depergola recognizes the wrongful nature of his conduct or that the likelihood is low he will commit future violations, if allowed to remain in the securities industry. For these reasons, I find that it is in the public interest to bar Depergola from association with any broker or dealer. Order I ORDER that, pursuant to Section 15(b) of the Securities Exchange Act of 1934, Joseph Depergola is barred from association with any broker or dealer. _______________________________ Brenda P. Murray Chief Administrative Law Judge 2
UNITED STATES OF AMERICA Before the SECURITIES AND EXCHANGE COMMISSION SECURITIES EXCHANGE ACT OF 1934 Release No. 55785/May 18, 2007 INVESTMENT ADVISERS ACT OF 1940 Release No. 2605/May 18, 2007 ADMINISTRATIVE PROCEEDING File No. 3-12556 ___________________________________ In the Matter of : : ORDER MAKING FINDINGS AND KEITH G. GILABERT : IMPOSING SANCTIONS BY : DEFAULT : : ___________________________________ The Securities and Exchange Commission (Commission) issued its Order Instituting Proceedings (OIP) on January 31, 2007, pursuant to Section 15(b) of the Securities Exchange Act of 1934 (Exchange Act) and Section 203(f) of the Investment Advisers Act of 1940 (Advisers Act). The Office of the Secretary has provided evidence demonstrating that Respondent Keith G. Gilabert (Gilabert) was served with the OIP on February 6, 2007. Gilabert’s Answer was due within 20 days of his receipt of the OIP. OIP at 2; 17 C.F.R. § 201.220(b). No Answer has been filed, and the time for filing an Answer has expired. The Division of Enforcement (Division) filed a Request by Division of Enforcement for Entry of Default against Respondent Keith G. Gilabert (Motion) dated March 5, 2007. To date, Gilabert has not filed a response to the Motion. On March 16, 2007, I ordered Gilabert to show cause on or before April 10, 2007, why he should not be held in default and be barred from association with any broker, dealer, or investment adviser. In a letter dated April 2, 2007, Gilabert advised that he is incarcerated at the Metropolitan Detention Center in Los Angeles, California, and requested a continuance of this proceeding pending an ongoing criminal investigation by the United States Attorney. Gilabert’s request for a continuance was denied. Keith G. Gilabert, Admin. Proc. No. 3-12556 (Apr. 19, 2007). Despite this denial, Gilabert was given until May 11, 2007, to respond to the Show Cause Order. Gilabert renewed his request for a continuance in a letter dated May 8, 2007.1 In denying Gilabert’s April 2, 1 On May 17, 2007, the Division filed its Response by Division of Enforcement to Respondent’s Third Request for Continuance in which the Division opposes Gilabert’s request for a continuance. 2007, request for a continuance, I found that Gilabert had not made a strong showing that denial of his request would substantially prejudice his ability to defend this proceeding, which seeks to bar Gilabert from association with any broker, dealer, or investment adviser based on an injunction entered in the United States District Court for the Central District of California. Gilabert’s May 8, 2007, letter does not provide sufficient additional evidence to find otherwise; therefore, Gilabert’s May 8, 2007, motion for a continuance is denied. Neither Gilabert’s April 2 letter nor his May 8 letter meets the requirements of an Answer under Rule 220 of the Commission’s Rules of Practice. Rule 220 requires an Answer to “specifically admit, deny, or state that the party does not have, and is unable to obtain, sufficient information to admit or deny each allegation in the order instituting proceedings.” 17 C.F.R. § 201.220(c). Gilabert’s letter fails to address any of the allegations in the OIP. Gilabert’s letter also fails to meet the requirements of the Show Cause Order. The Show Cause Order stated that “[a]ny response to this Order must include Gilabert’s overdue Answer to the OIP in accordance with Rule 220 of the Commission’s Rules of Practice.” Keith G. Gilabert, Admin. Proc. No. 3-12556 (Mar. 16, 2007). Therefore, Gilabert is in default for failing to file an Answer, respond to a dispositive motion, or otherwise defend the proceeding. 17 C.F.R. §§ 201.155, .220(f). Pursuant to Rule 155(a) of the Commission’s Rules of Practice, I find the following allegations in the OIP to be true. Gilabert, thirty-five years old, was a resident of Valencia, California, during the conduct described herein. From September 2001 to January 2005, Gilabert was the managing member and portfolio manager of CMG-Capital Management Group Holding Company, LLC, an unregistered investment adviser, and also managing partner of The GLT Venture Fund, L.P. (GLT), an unregistered investment company. During the time in which he engaged in the conduct underlying the complaint described below, Gilabert was not associated with either a broker-dealer or an investment adviser registered with the Commission. Gilabert participated in an offering of GLT limited partnership interests and also determined which securities to purchase and sell on GLT’s behalf. On December 6, 2006, the United States District Court for the Central District of California entered a final judgment against Gilabert pursuant to his default, permanently enjoining him from future violations of Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933, Sections 10(b) and 15(a) of the Exchange Act and Rule 10b-5 thereunder, and Sections 206(1) and 206(2) of the Advisers Act, in the civil action titled SEC v. CMG-Capital Mgmt. Group Holding Co., No. CV 06-2595 GHK (JWJx) (C.D. Cal.). The Commission’s complaint alleged that, from September 2001 to January 2005, in connection with the sale of GLT limited partnership interests, Gilabert misappropriated GLT’s and investors’ funds, paid investor returns with new investor funds, falsely stated that GLT had achieved 19% to 36% annual returns when it actually lost money, falsely stated that no one stock would account for more than 1.5% of GLT’s portfolio when in fact its holdings were far more concentrated, failed to disclose that the California Department of Corporations had revoked CMG’s investment adviser registration, and otherwise engaged in a variety of conduct that operated as a fraud and deceit on investors. The complaint also alleged that Gilabert sold GLT limited partnership interests in an unregistered securities offering and acted as an unregistered broker-dealer. 2 In consideration of the above, I conclude that it is in the public interest to bar Gilabert from association with any broker, dealer, or investment adviser. ORDER IT IS ORDERED THAT, Keith G. Gilabert’s request for a continuance is DENIED; and IT IS FURTHER ORDERED THAT, pursuant to Section 15(b) of the Securities Exchange Act of 1934 and Section 203(f) of the Investment Advisers Act of 1940, Keith G. Gilabert is barred from association with any broker, dealer, or investment adviser. _______________________ Robert G. Mahony Administrative Law Judge 3
Market Data 
Markets 
AI
