SECURITIES AND EXCHANGE COMMISSION Washington, D.C. SECURITIES EXCHANGE ACT OF 1934 Rel. No. 40726 / November 30, 1998 Admin. Proc. File No. 3-8510 __________________________________________ : In the Matter of : : ADRIAN C. HAVILL : : __________________________________________: OPINION OF THE COMMISSION BROKER-DEALER PROCEEDING Grounds for Remedial Action Aiding, Abetting, and Causing Manipulation Person associated with a registered broker-dealer aided, abetted, and caused a manipulation effected by his customer. Held, it is in the public interest to suspend respondent from association with any broker or dealer for a period of two months and to order respondent to cease and desist from committing or causing any violation or future violation of the antifraud and antimanipulation provisions of the federal securities laws and rules thereunder. APPEARANCES: Adrian C. Havill, pro se. David S. Horowitz and Merri Jo Gillette, for the Division of Enforcement. Appeal filed: November 20, 1995 Last brief filed: January 23, 1996 Oral argument held: June 9, 1997 I. Adrian C. Havill, formerly a registered representative with Scott & Stringfellow, Inc. ("SSI" or the "Firm"), appeals from the decision of an administrative law judge. The law judge found that, from August 1989 to January 1990, Havill aided, abetted, and caused violations of Sections 9(a)(1), 9(a)(2), and 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder committed by John G. Broumas, one of Havill's customers. [1] The law judge suspended Havill from association with any broker or dealer for two months. He also ordered Havill to cease and desist from committing or causing any future violations of the provisions he was found to have violated. Our findings are based on an independent review of the record, except with respect to those findings not challenged on appeal. [2] II. A. Broumas' Schemes. Broumas was chairman of the board of Madison National Bank of Virginia ("MNBV"), and a director of James Madison, Limited ("JML"), the holding company for the Madison group of banks. He owned some 190,000 shares of JML Class A common stock, which was listed on the American Stock Exchange ("AMEX"). Broumas held his stock in about 25 margin accounts at 14 different broker-dealers. Broumas engaged in the practice of "marking the close," "the practice of attempting to influence the closing price of a stock by executing purchase or sale orders at or near the close of the market." [3] Broumas would purchase small amounts (usually between 100 and 200 shares) of JML on the AMEX and the Midwest Stock Exchange at or near the close of trading. Between January 18, 1989 and June 25, 1990, Broumas made 69 purchases of JML during the final 10 minutes of the trading day. Of those purchases, 54 were the last trade of the day and 47 of these trades were executed on an uptick. [4] On several occasions, Broumas' trades raised the closing price of JML stock by 1/8. Broumas' purchases at the close of trading benefited him in several ways. Broumas was aware that certain brokerage firms with which he dealt limited margin transactions to securities above a certain price. These firms use the closing price of a security in determining the security's "marginability." Firms also use the closing price to determine whether a customer's account meets margin requirements, and to calculate the equity in the customer's account. Broumas' marking-the-close transactions bolstered the equity in his margin accounts and helped to preserve JML's marginability. The closing price of a security also is quoted in the following day's newspapers. The reporting of Broumas' transactions created the appearance of activity in JML. During this same period, Broumas also engaged in a scheme similar to check-kiting. Broumas was experiencing severe financial problems, owed substantial debt, and had been denied additional loans from the JML banks because he had reached his credit limit. [5] He therefore arranged over-the-counter wash trades of JML stock between various accounts that he owned or controlled. Broumas instructed persons associated with a broker- dealer on one side of a particular trade to contact the contra- firm and to buy or sell JML stock that Broumas controlled in the amounts and at the price specified by Broumas, so-called "directed trading." [6] By selling stock to himself, Broumas was able to obtain needed cash. Since his stock was held in margin accounts, he could obtain sales proceeds within one day after the transactions were completed. At the same time, he was able to delay for at least a week, i.e., until the settlement date, paying for the corresponding purchases. Between January 1, 1989 and June 30, 1990, Broumas effected 203 sets of wash trades involving 420 transactions. These trades typically involved the purchase and sale of between 3,000 and 12,000 shares of JML. Most of these trades were not reported. However, the JML trades that were reported to the AMEX constituted 36.6% of the total reported market volume during the period at issue, and, from July 1, 1989 to June 30, 1990, 44% of the reported volume. [7] B. Broumas' Activities through Havill. Havill first met Broumas in 1972 or 1973 when Broumas hired Havill's advertising and public relations firm to produce advertising materials for a motion picture exhibition. Broumas also recruited Havill for an entertainment industry charity. Havill subsequently became active in the charity and was its president and a member of its board around 1984 or 1985. During this time, the charity held benefit movie exhibitions, which Broumas attended. In the mid-1980's, Havill became associated with Johnston, Lemon & Co. In January 1986, Broumas opened a brokerage account with Havill at Johnston, Lemon. When Havill joined SSI in August 1989, Broumas opened two margin accounts with Havill at the Firm -- an account in Broumas' individual name and a joint account in the names of Broumas and his wife. Havill knew that Broumas was the chairman of MNBV and a substantial shareholder in JML. While the Broumas accounts were open at SSI, Havill maintained posting sheets of the activity in the accounts, which he updated within a few days of the transactions. From August 30, 1989 through January 17, 1990, Havill effected 31 unsolicited orders by Broumas to purchase JML on the AMEX during the last 10 minutes of the trading day. With one exception, these transactions involved the purchase of 100 shares of JML. [8] Broumas instructed Havill to make these purchases either at the market or at a limit price set by Broumas. The orders were entered by Broumas or Broumas' secretary. Broumas often called Havill between 3:00 and 4:00 and instructed Havill to "buy toward the close, buy at the close, buy near the close." In other instances, Broumas called Havill earlier in the day and asked to be informed later in the afternoon of JML's then-current trading price. Of these 31 trades, 29 were the last trade of the day, 25 were executed on an uptick, and 6 on a zero plus tick. [9] **FOOTNOTES** [1]: On September 27, 1991, the Commission brought an injunctive action against Broumas charging that he violated the federal securities laws by executing wash trades in James Madison, Limited stock and by marking the close. Without admitting or denying the allegations, Broumas consented to the entry of a permanent injunction. SEC v. John G. Broumas, Civil Action No. 91-2449 (D.D.C.). In November 1994, Broumas pled guilty to a criminal information charging him with misapplication of bank funds. The information alleged that, from April through June 1990, Broumas engaged in a check-kiting scheme, writing checks against insufficient funds in order to meet margin calls. It also charged that Broumas improperly used his position as board chairman of Madison National Bank of Virginia to exchange personal checks drawn on falsely inflated balances for cashier's checks in order to meet margin calls and pay other expenses. United States v. Broumas, Crim. No. 94-442 (D.D.C. Nov. 23, 1994). [2]:Our Rules of Practice were amended in 1995. Securities Exchange Act Rel. No. 35833, 60 Fed. Reg. 32,738 (June 23, 1995). Because these proceedings were instituted before the new rules were adopted, they are governed by our former Rules of Practice. [3]:Thomas C. Kocherhans, Securities Exchange Act Rel. No. 36556 (December 6, 1995), 60 SEC Docket 2589, 2592. [4]:An uptick occurs when a securities transaction is executed at a price higher than the previous transaction in the same security. [5]:As a result of his inability to repay his liabilities, Broumas filed for personal bankruptcy in early 1991. [6]:United States v. Cohen, 518 F.2d 727, 734 (2d Cir.), cert. denied, 423 U.S. 926 (1975). [7]:Schedule G to the National Association of Securities Dealers, Inc.'s By-Laws, which was in effect at the time of the events at issue, required that over-the-counter sales transactions in listed securities be reported. [8]:On October 26, 1989, Broumas entered an order to purchase 500 shares of JML stock, which was executed at 3:52 p.m. This trade, which was executed at an uptick, was the last trade of the day on the AMEX in JML. [9]: A "zero plus tick" occurs when a securities transaction is executed at the same price as the previously executed trade in that security and that previous trade, in turn, was executed at a price higher than the trade that preceded it. In September or October 1989, Havill asked Broumas why he made these trades since the trades were not profitable. Broumas admitted to Havill that he was trying "to create interest" in JML, observing that "if nobody [bought] it on a certain day, it [wouldn't] show up in the [newspaper] listing." Havill relayed this information to his SSI branch manager, who approved Broumas' continued trading. The branch manager assured Havill that "[i]t's okay because [Broumas is] not making any money, and to make the stock go up artificially, you have to buy a lot more than 100 shares." Between November 9, 1989 and January 11, 1990, Havill effected seven wash trades for Broumas involving a total of 64,352 shares of JML stock. Six of these seven wash trades were reported to the AMEX. On the days that these JML trades were reported, Broumas' wash trades accounted for between 42 and 76 percent of that day's volume in JML reported on the AMEX. Sometimes, Broumas would notify Havill that Havill would receive a call from an unrelated broker-dealer that would handle the other side of the trade, or Broumas would instruct Havill to call a specific firm to complete the trade. On other occasions, Havill received an initial call from another broker-dealer telling him that it was selling or buying a certain quantity of JML stock on behalf of Broumas. Havill would then contact Broumas to confirm that Broumas wished to enter into the transaction before executing the trade. After Havill had executed several of these trades, Broumas told him that the JML shares were being sold to and bought from Broumas' own accounts at other firms. Havill informed his branch manager of Broumas' activities. The branch manager complained about the commission rate that Havill proposed to charge Broumas to effect these transactions and required Havill to charge Broumas a higher rate. Havill subsequently told Broumas that SSI had ordered Havill "not to take these upticks" because the trades were "not proper and . . . might affect the market or something . . . ." The AMEX began an investigation of transactions in JML entered in January 1990 through SSI. Havill became aware of the AMEX investigation shortly thereafter. III. The three elements necessary to find aiding and abetting are: (1) securities law violations by Broumas; (2) Havill's substantial assistance in the conduct constituting those violations; and (3) Havill's general awareness or knowledge that his actions were part of an overall course of conduct that was illegal or improper. [10] We conclude that Havill willfully aided and abetted certain of Broumas' violations. A. Broumas' Violations. Broumas sought to create interest in JML and ensure that the thinly-traded stock would appear in the newspaper. Section 9(a)(2) of the Exchange Act specifically prohibits transactions that create the appearance of activity or raise or lower the price of a security for the purpose of inducing others to purchase. [11] As discussed above, a higher closing price benefited Broumas by increasing the equity in his margin accounts and preserving the marginability of JML stock. By artificially influencing JML's price level at the end of the day, Broumas intentionally distorted the stock's market price, conveying false information to investors and market participants. We conclude that Broumas willfully violated Sections 9(a)(2) and 10(b) of the Exchange Act and Rule 10b-5 thereunder in connection with his marking-the- close transactions. As noted above, Broumas also engaged in hundreds of wash trades in JML stock. Broumas' wash trades were a scheme or device to defraud others. As a result of securities transactions, Broumas caused broker-dealers to pay him immediately the proceeds from the sale portion of the wash transaction. He otherwise would not have been entitled to receive these proceeds because his transactions were not bona fide. The wash trades also operated as a fraud and deceit on the marketplace by creating a deceptive appearance of market activity, accomplished by an intentional interference with the free forces of supply and demand. [12] Broumas' creation of deceptive market activity was manipulative. [13] Based on this conduct, we conclude that Broumas' wash trades violated Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. [14] B. Havill's Aiding and Abetting. 1. Marking the Close. Between the opening of the account on August 30, 1989, and January 17, 1990, Broumas entered a total of 41 trades through Havill at SSI. As noted above, 31 of those trades were entered within the last 10 minutes of trading. Broumas' pattern of marking the close in JML began with the second trade that he entered through Havill at the Firm. During the first four weeks that Broumas' individual account was open, Broumas made 15 JML trades, an average of over three trades per week. In 13 of those trades, Broumas purchased 100 shares. All 13 transactions were executed after 3:55 p.m. and were the last trade of the day. Eleven of these trades were entered at a plus tick, and two were entered at a zero-plus tick. The pattern of trading at the close continued. Beginning on December 29, 1989, Broumas placed 13 JML trades in his two accounts over a 15-business day period. Ten of these trades were the last trade on the AMEX of the day. [15] Seven trades were placed at a plus tick, and three trades were at a zero-plus tick. Havill knew that Broumas was an officer of the bank. He also knew that Broumas was a major JML shareholder and that a rise in the price of JML would benefit Broumas because Broumas owned so much JML stock. Havill also was aware that JML was thinly traded. He kept posting sheets of the activity in the Broumas' accounts and monitored the price of JML. He would sometimes call Broumas to let Broumas know if JML had risen in price because he knew that price increases in JML would please Broumas. [16] Havill admits that Broumas' trading was "unusual . . . something I had never seen before or since then." [17] Havill knew that Broumas was not making a profit on the trades. Havill, moreover, ignored Broumas' statements describing precisely conduct that is proscribed specifically by Exchange Act Section 9(a)(2) -- the entry of orders to create the appearance of activity in a security. Havill asserts that he could not discern a pattern in Broumas' trading. We believe that he was, at the least, reckless in not doing so. Havill had been a securities professional for at least four years when these transactions began. Havill argues that he could not identify the pattern because Broumas entered both market orders and limit orders shortly before the close. Havill admits that he was aware that market orders would be entered at the ask price. He notes, however, that several of Broumas' orders were not market orders, but limit orders between the bid and the ask. Many of these limit orders, however, resulted in an uptick or zero-plus tick of the AMEX price. We conclude that Havill was at least reckless in not seeing the pattern in Broumas' trading, particularly when that trading was beneficial to Broumas. Havill also suggests that he should not liable because he described Broumas' practice of trading at the end of the day to his branch manager, including Broumas' explanations for his trading. Havill states that the branch manager "educated" Havill about Broumas' trading at the close, explaining to Havill that Broumas was not making money on the trades and could not manipulate the market with such small trades. Havill states that the branch manager had a principal's license, over twenty years of experience, and several college degrees. Havill asserts that he had no reason not to rely on the manager's advice and no motive to assist Broumas. [18] We do not agree that Havill properly relied on the branch manager's explanation concerning the marking-the-close trades. Havill knew or was reckless in not knowing that his branch manager's suggestion that Broumas' trades could not affect JML's price was wrong. The marking-the-close trades frequently resulted in an increase in JML's closing price, an increase which Havill knew or was reckless in not knowing was advantageous to Broumas's margined position in that stock. [19] 2. Wash Trades. Broumas placed seven wash trades through Havill at SSI. Broumas admitted to Havill that Broumas was effecting transactions between SSI and accounts that he maintained at other firms. Nevertheless, Havill did not question the fact that Broumas was willing to pay commissions and margin fees essentially to trade with himself. Unlike the marking-the- close trades, the wash trades involved a substantial number of JML shares -- between 8,000 and 13,522 shares per trade. Havill was at least reckless in not recognizing that the trades constituted a substantial proportion of the reported volume in JML. Havill claims that his branch manager approved the wash trades. When Broumas began entering wash trades, Havill informed his branch manager about the trades. Havill and his branch manager had a disagreement about the rate of commissions that Broumas should be charged. Unlike the marking-the-close transactions, however, Havill does not claim that the branch manager explained or "educated" him about Broumas' wash trading. Rather, while the record reflects that Havill and the manager discussed the fact of the trades, Havill's testimony indicates that the discussion was limited to the amount of commissions to be charged. [20] While the branch manager may have been aware of the trading, we do not believe that the record supports Havill's conclusion that the manager advised Havill that Broumas' trading was somehow proper. [21] Havill claims that, because he had never been trained about what constitutes a marking-the-close transaction or a wash trade, he was not aware that Broumas' actions were improper. [22] In this regard, he notes that SSI's compliance manual did not refer to wash trades or marking the close. Ignorance, however, is not an excuse for engaging in violative conduct. An associated person of a broker-dealer has a duty to be aware of and comply with applicable rules and requirements. [23] We often have disciplined securities professionals for wash trades and for marking the close. [24] Indeed, the legislative history accompanying the original enactment of the Exchange Act expresses repeated concern about wash transactions. [25] We conclude that Havill willfully aided and abetted both Broumas' marking-the-close and wash trade violations. We further conclude, pursuant to Section 21C of the Act, that Havill was a cause of Broumas' violations. [26] IV. As noted, the law judge ordered that Havill be suspended from registration with a broker or dealer for two months and be required to cease and desist from violations of the antifraud and antimanipulation provisions. The Division has not appealed his sanction. We agree that this sanction is in the public interest. Havill accepted and placed what he recognized were extraordinary trades for a customer who was engaged in a manipulative scheme, a serious violation. [27] We note, however, that Havill has no prior disciplinary history and is no longer in the securities industry. We shall suspend Havill from registration with a broker or dealer for two months and order that he cease and desist from violating or causing future violations of Sections 9(a)(2) and 10(b) of the Exchange Act and Rule 10b-5 thereunder. [28] **FOOTNOTES** [10]:See Donald T. Sheldon, 51 S.E.C. 59, 66 (1992), aff'd, 45 F.3d 1515 (11th Cir. 1995), and cases cited therein. [11]:United States v. Stein, 456 F.2d 844, 846, 850 (2d Cir.), cert. denied, 408 U.S. 922 (1972) (violation of Section 9(a)(2) through manipulative activities including purchases of 100 to 200 shares of stock at a "plus tick"); Re, Re & Sagarese, 41 S.E.C. 230, 232 (1962) (finding specialists manipulated stocks in violation of Section 9(a)(2) and 10(b) and Rule 10b-5 by, among other things, "closing transactions on the uptick"). [12]:See Ernst & Ernst v. Hochfelder, 325 U.S. 195, 204 (1976). [13]:Swartwood, Hesse, Inc., 50 S.E.C. 1301, 1307 (1992); Edward J. Mawod & Co., 46 S.E.C. 865, 869-71 (1977), aff'd, 591 F.2d 588, 595 (10th Cir. 1979); Thornton & Co., 28 S.E.C. 208, aff'd per curiam, 171 F.2d 702 (2d Cir. 1948). [14]:We previously have held that specific manipulative intent must be demonstrated to establish a violation of Sections 9(a)(1) and 9(a)(2). Michael Batterman, 46 S.E.C. 304, 305 (1976) (settled case); Harold T. White, 3 S.E.C. 466, 510 (1938). The record here evidences only that Broumas directed his trades between his accounts and accounts that he controlled to obtain funds using the float. Under these circumstances, we conclude that Broumas' wash trades do not support a finding of violation of Section 9(a)(1) or 9(a)(2) of the Exchange Act. Accordingly, we necessarily conclude that Havill did not aid, abet, or cause violations of Section 9(a)(1) or 9(a)(2) with respect to these wash trades. [15]:All of the remaining trades placed for Broumas' accounts during this 15-day period were wash trades. These trades are discussed infra. [16]:Havill testified: I would call his secretary and say -- because I knew he wanted to know the price of the stock, that James Madison was up an eighth of a point this morning . . . or sometimes I would speak to [Broumas]. [17]:Some courts require clear proof of intent to violate the law to find a person liable for aiding and abetting in a case where "the alleged aider and abettor conducts what appears to be a transaction in the ordinary course of his business" or "the evidence shows no more than transactions constituting the daily grist of the mill." Woodward v. Metro Bank of Dallas, 522 F.2d 84, 95, 97 (5th Cir. 1975). Here, however, Havill admits that Broumas' trades were extraordinary and totally without precedent. [18]:Havill also complains that his manager was not disciplined in connection with Broumas' trading activity. However, even if Havill's manager had failed reasonably to supervise Havill, that failure would not excuse Havill's behavior. Martin Herer Engelman, Securities Exchange Act Rel. No. 35729 (May 18, 1995) 59 SEC Docket 1038, 1057, n.46, aff'd sub nom. Isen v. SEC, 87 F.3d 1319 (9th Cir. 1996) (Table); Donald T. Sheldon, 51 S.E.C. at 71. [19]:We believe that Havill's situation differs from that described in James L. Owsley, 51 S.E.C. 524, 528 (1993). In Owsley, a registered representative, Robert Nelson, had asked his supervisor whether Nelson was required to disclose that he was selling his own stock in an issuer at the same time that Nelson was recommending the purchase of that stock. The supervisor advised Nelson that disclosure was not necessary, and Nelson made none. We concluded that the record did not demonstrate there that Nelson had acted with scienter. Here, Havill knew that JML was thinly traded, and he was following the price of the stock. He recklessly ignored the fact that the trades Broumas placed at the end of the day over a 4-1/2 month period were repeatedly the last trade of the day and often caused the stock to close at an uptick or a zero-plus tick. We also question whether the branch manager completely understood the nature of these transactions. The manager testified during our staff's investigation that he was not aware that the transactions were resulting in an uptick although he recognized that market orders generally would be executed at an uptick. [20]:During the investigation, the branch manager testified that he became aware of the wash trades at some point in time, although he could not recall when he became aware of these trades or whether he discovered the trades from reviewing the order tickets. He further testified that in retrospect he thought the trades were unusual. The manager answered, "No" in response to the question "Did you ever inquire as to Mr. Havill about these trades what [sic] I will call directed trades?" [21]:See, e.g., Michael Brian Kormos, Securities Exchange Act Rel. No. 35823 (June 8, 1995) 59 SEC Docket 1438, 1441 (observing that manager's direction to "do it" did not suggest that action was "proper or lawful"). [22]:Havill asserts that he did not have any motivation to assist Broumas. He states that he and Broumas were not close social acquaintances and had limited business dealings before the events at issue. He also states that he charged Broumas very low commissions and received only $1500 in commissions from Broumas' trades, not enough to warrant risking his securities license. We note, however, that, according to Broumas, after approximately 4-1/2 months of trading, SSI refused to accept any more orders because of concern about the marking the close transactions, which would limit the amount of commissions. In any event, since we have found that Havill was reckless in not recognizing various indicia of Broumas' violative activity, we do not speculate about whether he had a motive to assist Broumas in that activity. [23]:See, e.g., Gilbert M. Hair, 51 S.E.C. 374, 378 n.12 (1993), and cases cited therein. [24]:See nn.11, 13 supra. See also Andrew Doherty, Securities Exchange Act Rel. No. 29545 (August 12, 1991), 49 SEC Docket 859; Jacob Schaefer, Securities Exchange Act Rel. No. 13736 (July 11, 1977), 12 SEC Docket 1128; SEC v. Chromalloy American Corp., Civil No. 77-1531 (S.D.N.Y.), Lit. Rel. No. 7850 (March 30, 1977), 11 SEC Docket 2186 (settlements). [25]:S. Rep. No. 792, 73d Cong., 2d Sess. 7-8 (1934) (noting that the proposed statute would prohibit "fictitious or 'wash' sales; 'matched' orders"); H.R. Rep. No. 1343, 73d Cong., 2d Sess. 10 (1934) ("[W]ash sales and matched orders and other devices designed to create a misleading appearance of activity with a view to enticing the unwary into the market on the hopes of quick gains are definitely prohibited."). [26]:Our finding that Havill willfully aided and abetted Broumas' violations necessarily makes him a "cause" of those violations. See Dominick & Dominick, Incorporated, 50 S.E.C. 571, 578 n.11 (1991). As noted above, to conclude that a respondent aided and abetted another's violation, it must be found that the respondent acted with scienter. A respondent is a "cause" of another's violation if the respondent "knew or should have known" that his act or omission would contribute to such violation. Exchange Act Section 21C(a). [27]:As we stated twenty-five years ago: The importance of a broker-dealer's responsibility to use diligence where there are any unusual factors is highlighted by the fact that violations of the antifraud and other provisions of the securities laws frequently depend for their consummation . . . on the activities of broker-dealers who fail to make diligent inquiry to obtain sufficient information to justify their activity in [a] security. Alessandrini & Co., Inc., 45 S.E.C. 399, 406 (1973). [28]:In Johnson v. SEC, 87 F.3d 484 (D.C. Cir. 1996), the Court of Appeals ruled that the statute of limitations contained in 28 U.S.C. 2462 prohibited this Commission from imposing a censure and a supervisory suspension in an administrative proceeding because that proceeding had been initiated more than five years after the entire conduct at issue. We note that the majority of the conduct here is within the five- year period. Even if a proceeding based upon certain of the conduct were time-barred, such conduct can be considered as evidence of motive, intent, or knowledge. See, e.g., Fed. R. Evid. 404(b). An appropriate order will issue. [29] By the Commission (Chairman LEVITT and Commissioner HUNT); Commissioner JOHNSON concurring; Commissioners CAREY and UNGER not participating. Jonathan G. Katz Secretary Commissioner JOHNSON concurs for the reasons set forth in his separate statement to this Commission's opinion in Sharon M. Graham and Stephen C. Voss, Exchange Act Rel. No. __ (__), __ SEC Docket __. **FOOTNOTES** [29]:All of the contentions advanced by the parties have been considered. They are rejected or sustained to the extent that they are inconsistent or in accord with the views expressed herein. UNITED STATES OF AMERICA before the SECURITIES AND EXCHANGE COMMISSION SECURITIES EXCHANGE ACT OF 1934 Rel. No. 40726 / November 30, 1998 Admin. Proc. File No. 3-8510 __________________________________________ In the Matter of : : ADRIAN HAVILL : __________________________________________: ORDER IMPOSING REMEDIAL SANCTIONS On the basis of the Commission's opinion issued this day, it is ORDERED that Adrian Havill be, and he hereby is, suspended from association with any broker or dealer for a period of two months; and it is further ORDERED that Havill cease and desist from committing or causing any violation or any future violation of Sections 9(a)(2) and 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder; and it is further ORDERED that Havill's suspension shall be effective at the opening of business on December 14, 1998. By the Commission. Jonathan G. Katz Secretary