NASD's National Adjudicatory Council Sanctions Former Monroe Parker Director of Trading and Director of Compliance
Washington, D.C.—NASD Regulation, Inc., today announced that its National Adjudicatory Council (NAC), NASD Regulation's appellate body, affirmed the findings of an NASD Regulation Hearing Panel decision, holding Ralph Angeline, former Director of Trading at Monroe Parker Securities, liable for his participation in the manipulation and excessive mark-ups of Steve Madden Ltd. Class A warrants in 1995. The NAC also affirmed the Hearing Panel’s determination that Richard Steven Levitov, Monroe Parker's former Director of Compliance, failed to exercise proper supervision. In its decision, the NAC upheld the Hearing Panel's decision that Angeline either knew of or was reckless in failing to discover Monroe Parker's "carefully planned manipulation," and that Levitov failed to supervise by not investigating the clear evidence of market manipulation and excessive mark-ups of Steve Madden warrants.
The NAC also affirmed in part and modified in part the sanctions that the Hearing Panel imposed. The NAC affirmed the Hearing Panel's decision to bar Angeline in all capacities and to fine him $600,000. The NAC modified the Hearing Panel's sanctions by reducing the disgorgement amount for which Angeline was responsible, from $3,156,930 (jointly and severally with other defendants who did not appeal) to $203,000. This amount represented Angeline's salary and bonus for 1995, the year in which the manipulation took place.
The NAC affirmed the Hearing Panel's decision to bar Levitov in all principal capacities, to suspend him for one year, to fine him $5,000, and to require him to retake and pass the Series 7 examination before re-entering the industry. The NAC changed the Hearing Panel’s retroactive start date for Levitov’s suspension from December 31, 1997, to the date on which the NAC issued its decision.
The NAC is a 14-person committee comprised of seven industry and seven non-industry members. The Committee meets bi-monthly to decide appeals of NASD Regulation Hearing Panel decisions, to rule on membership applications, and to address other policy matters.
The original compliant against Monroe Parker was filed on December 23, 1997. The complaint alleged that in late 1994 and early 1995, Monroe Parker acquired approximately 94 percent of the Steve Madden Class A warrants that were available for public trading. The NASD determined that after Monroe Parker had acquired a dominant position in the warrants, Monroe Parker manipulated the price of the warrants and sold its entire inventory to customers at prices reflecting fraudulently excessive mark-ups. Monroe Parker made more than $3 million in profits through its fraudulent scheme. As soon as it made the profits, Monroe Parker no longer had an interest in artificially supporting the price of the warrants, reduced its bid, and customers lost millions of dollars.
Investors can obtain more information about NASD Regulation as well as the disciplinary record of any NASD-registered broker or brokerage firm by calling (800) 289-9999, or by sending an e-mail through NASD Regulation’s Web site, www.nasdr.com.
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