SECURITIES EXCHANGE ACT OF 1934
Rel. No. 51238 / February 22, 2005

Admin. Proc. File No. 3-11372



In the Matter of the Application of

MORTON KANTROWITZ
1900 Glades Road, Room 200
Boca Raton, Florida 33431


ORDER REMANDING APPEAL FROM REGISTERED SECURITIES ASSOCIATION

On the basis of the Commission's opinion issued this day, it is

ORDERED that the proceedings on the application of Morton Kantrowitz be, and they hereby are, remanded to NASD for further proceedings consistent with that opinion.

By the Commission.

Jonathan G. Katz
Secretary


Endnotes

1 Under Securities Exchange Act Section 3(a)(39), 15 U.S.C. § 78c(a)(39), a person is subject to a "statutory disqualification" if, among other things, "such person . . . is enjoined from any action, conduct, or practice specified in subparagraph (C) of such paragraph (4), . . . ."

Under NASD By-Laws, Article III, Section 4(h), a person is subject to a "disqualification" if, among other things, such person "is permanently or temporarily enjoined . . . ." NASD Manual at 1307 (Nov. 2003).

Under Article II, Section 3(b) of NASD's By-Laws, NASD may bar a person from becoming associated or continuing association with a member if such person is subject to a disqualification. NASD Manual at 1305.

2 SEC v. American Cont'l Indus. (D.Md. 1969).

3 15 U.S.C. §§ 77q, 78j, and 78o, and 17 C.F.R. §§ 240.10b-5 and 15c2-7.

4 Alessandrini & Co., 1971 SEC LEXIS 3975 (Dec. 10, 1971).

5 Wellington Hunter dba Wellington Hunter Associates, Securities Exchange Act Rel. No. 9480 (Feb. 8, 1972), 1972 SEC Lexis 1300.

6 People v. Morton Kantrowitz (Wakefield Financial Securities Case), Ind. No. 289/91 (S.Ct. N.Y.) (1992).

7 Under Exchange Act Section 3(a)(39), 15 U.S.C. § 78c(a)(39), and under NASD By-Laws, Article III, Sections 4(g)(1)(i) and (ii), NASD Manual at 1307, a person is subject to a statutory disqualification if, among other things, he or she is convicted of a misdemeanor, within 10 years preceding the filing of any application for membership or association, arising out of the conduct of the business of a broker-dealer or involving the making of a false report.

8 Morton Kantrowitz, Exchange Act. Rel. No. 44239 (May 1, 2001), 74 SEC Docket 2406 (noting that the proposed supervisor had left the member firm, and that firm had not amended its application to propose a new supervisor) and Morton Kantrowitz, 52 S.E.C. 721, 723 (1996) (stating that the "conviction at issue, while a misdemeanor, reflects poorly on Kantrowitz's integrity" and noting our earlier suspension).

9 Kantrowitz also will place orders with Great Eastern to buy or sell securities for his own brokerage account at the Firm and for the brokerage accounts of his wife and step-daughter, if they grant appropriate trading authority. Kantrowitz states that this activity would not require registration. However he "listed this activity in the application in order to make complete disclosure of all of my contemplated activities at Great Eastern."

10 Initially, Great Eastern identified Ernest Viola as Kantrowitz's responsible supervisor. Member Regulation also expressed concern about Viola's ability adequately to supervise Kantrowitz. Viola subsequently resigned from Great Eastern.

11 The NAC also stated that it was not troubled by the Firm's regulatory history. In 2002, the Firm consented to a fine of $7,500 in an Acceptance, Waiver and Consent for failing to comply with the reporting requirements of the Order Audit Trail System. In 2003 NASD issued a Letter of Caution to the Firm for failing to submit a copy of a response to an information request.

12 Paul Edward Van Dusen, 47 S.E.C. 668 (1981) and Arthur H. Ross, 50 S.E.C. 1082 (1992).

13 15 U.S.C. § 78s(f).

14 Kantrowitz does not claim, and the record does not support a conclusion, that NASD's action has imposed an undue burden on competition.

15 Reuben D. Peters, Exchange Act Rel. No. 51237 (Feb. 22, 2005), ___ SEC Docket ____, reconsideration denied, Exchange Act Rel. No. 51238 (Feb. 22, 2005), __ SEC Docket __. See also Harry M. Richardson, Exchange Act Rel. No. 51236 (Feb. 22, 2005), __ SEC Docket __.

16 Van Dusen, 47 S.E.C. at 671.

17 Id.

18 Ross, 50 S.E.C. at 1085 n.10.

19 Van Dusen, 47 S.E.C. at 671 (citation omitted).

20 Halpert & Co., 50 S.E.C. 420, 422 (1990).

21 Kantrowitz compares his application to that of Dennis Milewitz, 53 S.E.C. 701 (1998). In Milewitz, the applicant, already subject to a permanent injunction and a misdemeanor conviction, engaged in additional misconduct resulting in administrative proceedings. As here, by the time of our review, the ten-year statutory period making his conviction a disqualification had run. We remanded Milewitz's application for further consideration of the effect of the injunction on his application. On remand, NASD determined to permit Milewitz's association in spite of the injunction and the prior criminal conviction, SD99004, available at http://www.nasdr.com/pdf-text/sddecisions/sd99004.pdf, (NASD 1999). While NASD states that every NAC decision is based on the facts and circumstances before it, NASD failed to explain why Milewitz does not inform its analysis of Great Eastern's application or how Kantrowitz's situation differs from Milewitz's.

22 We have considered all of the parties' contentions. We have rejected or sustained them to the extent that they are inconsistent or in accord with the views expressed in this opinion.