UNITED STATES OF AMERICA Before the SECURITIES AND EXCHANGE COMMISSION SECURITIES ACT OF 1933 Release No. 7540 / May 20, 1998 SECURITIES EXCHANGE ACT OF 1934 Release No. 40012 / May 30, 1998 ADMINISTRATIVE PROCEEDING File No. 3-9523 ________________________________ : In the Matter of : ORDER MAKING FINDINGS, : IMPOSING REMEDIAL KERRIGAN SEAN WEBER, : SANCTIONS, AND IMPOSING A : CEASE-AND-DESIST ORDER : Respondent : ________________________________: I. In connection with a public administrative proceeding instituted against him pursuant to Section 8A of the Securities Act of 1933 ("Securities Act") and Sections 15(b), 19(h), and 21C of the Securities Exchange Act of 1934 ("Exchange Act"), Kerrigan Sean Weber ("Weber") has submitted an Offer of Settlement ("Offer") to the Securities and Exchange Commission ("Commission"), which the Commission has determined to accept. Solely for the purpose of this proceeding and any other proceeding brought by or on behalf of the Commission or in which the Commission is a party, and without admitting or denying the findings contained herein, except as to the jurisdiction of the Commission over him and over the matters set forth in the Order, which is admitted, Weber consents to the entry of the findings and remedial sanctions set forth below. II. On the basis of this Order and the Offer submitted by Weber, the Commission makes the following findings: A. Weber was a registered representative ( RR ) at a branch office of Smith Barney Inc. (now known as Salomon Smith Barney) from approximately 1988 to November 1993. B. From approximately June 1989 through approximately November 1993, Weber willfully violated Section 17(a) of the Securities Act of 1933 ("Securities Act"). Weber directly or indirectly, in the offer or sale of securities, by the use of any means or instruments of transportation or ======END OF PAGE 1====== communication in interstate commerce or by the use of the mails, employed devices, schemes or artifices to defraud; obtained money or property by means of untrue statements of material facts or omissions to state material facts necessary in order to make the statements made, in the light of circumstances under which they were made, not misleading; or engaged in transactions, practices, or courses of business which operated or would operate as a fraud or deceit upon any purchaser. For example: 1. Weber engaged in a pattern of misdirecting investors' checks while he was employed as a registered representative at the Smith Barney Inc. branch office. From June 1989 to November 1993, Weber misdirected over thirty-one checks totaling over $245,459.47 from at least twenty-two customers to the accounts of at least twenty-seven other customers. 2. Weber was the RR for all of the customers who had their checks misdirected. 3. Weber frequently visited the customers referred to in Paragraph II.B.1., some of whom were elderly, in their homes. During these visits, customers gave Weber checks which were to be deposited into their Smith Barney accounts for the purpose of purchasing securities. 4. However, in the instances described in Paragraphs II.B.2. and II.B.3., Weber did not purchase securities for the customers and instead had the checks deposited into other customers' accounts. Weber misdirected those customers' checks without the customers' authorization, and he never informed any of the victims that he intended to deposit their checks into other customers' accounts. 5. Weber also made misrepresentations and omitted to disclose material facts to customers concerning transactions in their accounts and engaged in unauthorized trading. C. From approximately June 1989 through approximately November 1993, Weber willfully violated Section 10(b) of the Exchange Act and Rule 10b-5 thereunder in that, directly or indirectly, by use of any means or instrumentalities of interstate commerce, or of the mails, or of any facility of any national securities exchange, in connection with the purchase or sale of securities, he employed devices, schemes or artifices to defraud; made untrue statements of material facts or omitted to state material facts necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading; or engaged in acts, practices or courses of business which operated or would operate as a fraud or deceit upon any person. For example, Weber engaged in the conduct described in Paragraph II.B., above. D. Weber has submitted a sworn financial statement dated January 12, 1998, and other evidence and has asserted his financial inability to pay a civil penalty. The Commission has reviewed the sworn financial statement and other evidence provided by Weber and has determined that Weber does not ======END OF PAGE 2====== have the financial ability to pay a civil penalty. III. Based on the foregoing, the Commission deems it appropriate and in the public interest to accept Respondent Weber's Offer, and accordingly: IT IS HEREBY ORDERED that: A. Weber cease and desist, pursuant to Section 8A of the Securities Act and Section 21C of the Exchange Act, from committing or causing any violation and any future violation of Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder; and B. Effective immediately, Weber be, and hereby is, barred from associating with any broker, dealer, municipal securities dealer, investment adviser, or investment company. C. The Division of Enforcement ("Division") may, at any time following the entry of the Order, petition the Commission to: (1) reopen this matter to reconsider whether Weber provided accurate and complete financial information at the time such representations were made; (2) determine the amount of the civil penalty to be imposed; and (3) seek any additional remedies that the Commission would be authorized to impose in this proceeding if Weber's offer of settlement had not been accepted. No other issue shall be considered in connection with this petition other than whether the financial information provided by Weber was fraudulent, misleading, inaccurate or incomplete in any material respect, what the amount of civil penalty to be imposed should be, and whether any additional remedies should be imposed. Weber may not, by way of defense to any such petition, contest the findings in the Order or the Commission's authority to impose any additional remedies that were available in the original proceeding. By the Commission. Jonathan G. Katz Secretary ======END OF PAGE 3====== ======END OF PAGE 4======