UNITED STATES OF AMERICA BEFORE THE SECURITIES AND EXCHANGE COMMISSION SECURITIES ACT OF 1933 Release No. 7564 / August 18, 1998 SECURITIES EXCHANGE ACT OF 1934 Release No. 40332 / August 18, 1998 ADMINISTRATIVE PROCEEDING File No. 3-9491 ______________________________ : In the Matter of : : IRA A. BOSHNACK :ORDER MAKING FINDINGS AND ANDREW S. FRIEDMAN :IMPOSING REMEDIAL SANCTIONS AND A DOUGLAS C. MILLER :CEASE-AND-DESIST ORDER : Respondents. : ______________________________: I. The Securities and Exchange Commission ("Commission") instituted public administrative and cease-and-desist proceedings 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") against Respondents Ira. A. Boshnack ("Boshnack"), Andrew S. Friedman ("Friedman") and Douglas C. Miller ("Miller") on December 1, 1997. II. Respondents Boshnack, Friedman and Miller have each submitted Offers of Settlement ("Offers") to the 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 Respondents Boshnack, Friedman and Miller and over the subject matter of this proceeding, which are admitted, Respondents Boshnack, Friedman and Miller by their Offers consent to the entry of findings, remedial sanctions and cease-and-desist order set forth below. III. On the basis of this Order Making Findings and Imposing Remedial Sanctions and a Cease-and-Desist Order ("Order") and the Offer submitted by Respondent Boshnack, the Commission finds that: A.From March 1993 to October 1995, Respondent Boshnack was a registered representative ("RR") at the now defunct registered broker-dealer Stratton Oakmont, Inc. ("Stratton"). In March 1994, Respondent Boshnack became a principal at Stratton. Respondent Boshnack is 48 years old and resides in Coconut Creek, Florida. B.On December 21, 1992, Respondent Miller, posing as Respondent Boshnack, sat for the Series 7 licensing exam administered by the National Association of Securities Dealers, Inc. ("NASD") and obtained a passing score on that exam on Respondent Boshnack's behalf. As a result of Respondent Miller's obtaining a passing grade on the Series 7 exam on Respondent Boshnack's behalf, Respondent Boshnack became an RR at Stratton and effected and solicited securities transactions. C.On March 14, 1994, Respondent Miller, posing as Respondent Boshnack, sat for the Series 24 licensing exam administered by the NASD and obtained a passing score on that exam on Respondent Boshnack's behalf. As a result of Respondent Miller's obtaining a passing grade on the Series 24 exam on Respondent Boshnack's behalf, Respondent Boshnack became a principal at Stratton and supervised registered representatives and other employees effecting and soliciting securities transactions. D.During the period from March 1993 through October 1995 ("Relevant Period"), Respondent Boshnack made baseless price predictions in order to induce at least four customers to purchase securities of companies for which Stratton had underwritten the initial public offerings, including, but not limited to, the securities of Dualstar Technologies, Inc. ("Dualstar"), Select Media Communications, Inc. ("Select Media") and/or United Leisure Corporation ("United Leisure"). E.During the Relevant Period, Respondent Boshnack made unauthorized purchases of securities, including, but not limited to, the securities of Childrobics, Inc., IDM Environmental Corporation, Master Glaziers Karate International, Inc. ("Master Glazier"), Octagon, Inc. ("Octagon") and Select Media, in the accounts of at least four customers. F.During the Relevant Period, Respondent Boshnack fraudulently held himself out to all of his customers as an RR and failed to disclose that he had not passed the Series 7 exam. Violations G.As described in paragraphs III. B. and III.C. above, during the period from April 1995 through October 1995, Stratton violated, and Respondent Boshnack willfully aided and abetted and caused the violations by Stratton of, Section 15(b)(7) of the Exchange Act and Rule 15b7-1 thereunder, in that Stratton effected transactions in, or induced the purchase or sale of, securities while the natural persons associated with Stratton who effected or were involved in effecting such transactions were not registered or approved in accordance with the standards of training, experience, competence, and other qualification standards (including but not limited to submitting and maintaining all required forms, paying all required fees, and passing any required examinations) established by the rules of the NASD of which Stratton was a member. H.As described in paragraphs III.D., III.E. and III.F above, during the Relevant Period, Respondent Boshnack willfully violated Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, by using any means or instruments of transportation or communication in interstate commerce, or by use of the mails, or of any facility of any national securities exchange or any means or instrumentality of interstate commerce, in the offer or sale or in connection with the purchase or sale of securities in that he directly or indirectly employed devices, schemes or artifices to defraud; obtained money or property by means of, or otherwise 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 transactions, practices or courses of business which operated as a fraud or deceit upon the purchasers or upon other persons. IV. On the basis of this Order and the Offer submitted by Respondent Friedman, the Commission finds that: A.From January 1993 to October 1995, Respondent Friedman was an RR at Stratton. In December 1994, Respondent Friedman became a principal at Stratton. Respondent Friedman is 28 years old and resides in Rosyln, New York. B.On April 6, 1995, Respondent Friedman, posing as Eric S. Blumen ("Blumen"), sat for the Series 24 licensing exam administered by the NASD and obtained a passing score on that exam on Blumen's behalf. As a result of Respondent Friedman's obtaining a passing grade on the Series 24 exam on Blumen's behalf, Blumen became a principal at Stratton and supervised registered representatives and other employees effecting and soliciting securities transactions. C.During the Relevant Period, Respondent Friedman made baseless price predictions in order to induce at least six customers to purchase securities of companies for which Stratton had underwritten the initial public offerings, including, but not limited to, the securities of Dualstar and/or United Leisure. D.During the Relevant Period, Respondent Friedman made unauthorized purchases of securities, including, but not limited to, the securities of Master Glaziers, Octagon and Solomon-Page Group, Ltd., Inc., in the accounts of at least three customers. Violations E.As described in paragraph IV. B. above, during the period from April 1995 through October 1995, Stratton violated, and Respondent Friedman willfully aided and abetted and caused the violations by Stratton of, Section 15(b)(7) of the Exchange Act and Rule 15b7-1 thereunder, in that Stratton effected transactions in, or induced the purchase or sale of, securities while the natural persons associated with Stratton who effected or were involved in effecting such transactions were not registered or approved in accordance with the standards of training, experience, competence, and other qualification standards (including but not limited to submitting and maintaining all required forms, paying all required fees, and passing any required examinations) established by the rules of the NASD of which Stratton was a member. F.As described in paragraphs IV.C. and IV.D. above, during the Relevant Period from March 1993 through October 1995, Respondent Friedman willfully violated Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, by using any means or instruments of transportation or communication in interstate commerce, or by use of the mails, or of any facility of any national securities exchange or any means or instrumentality of interstate commerce, in the offer or sale or in connection with the purchase or sale of securities in that he directly or indirectly employed devices, schemes or artifices to defraud; obtained money or property by means of, or otherwise 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 transactions, practices or courses of business which operated as a fraud or deceit upon the purchasers or upon other persons. V. On the basis of this Order and the Offer submitted by Respondent Miller, the Commission finds that: A.From March 1993 to October 1994, Respondent Miller was an RR at Stratton. Respondent Miller is 30 years old and resides in Metairie, Louisiana. B.On December 21, 1992, Respondent Miller, posing as Respondent Boshnack, sat for the Series 7 licensing exam administered by the NASD and obtained a passing score on that exam on Respondent Boshnack's behalf. As a result of Respondent Miller's obtaining a passing grade on the Series 7 exam on Respondent Boshnack's behalf, Respondent Boshnack became an RR at Stratton and effected and solicited securities transactions. C.On March 14, 1994, Respondent Miller, posing as Respondent Boshnack, sat for the Series 24 licensing exam administered by the NASD and obtained a passing score on that exam on Respondent Boshnack's behalf. As a result of Respondent Miller's obtaining a passing grade on the Series 24 exam on Respondent Boshnack's behalf, Respondent Boshnack became a principal at Stratton and supervised registered representatives and other employees effecting and soliciting securities transactions. Violations D.As described in paragraphs V.B. and C. above, during the period from March 1993 through October 1995, Stratton violated, and Respondent Miller willfully aided and abetted and caused the violations by Stratton of, Section 15(b)(7) of the Exchange Act and Rule 15b7-1 thereunder, in that Stratton effected transactions in, or induced the purchase or sale of, securities while the natural persons associated with Stratton who effected or were involved in effecting such transactions were not registered or approved in accordance with the standards of training, experience, competence, and other qualification standards (including but not limited to submitting and maintaining all required forms, paying all required fees, and passing any required examinations) established by the rules of the NASD of which Stratton was a member. VI. In view of the foregoing, the Commission deems it appropriate and in the public interest to accept the Offers submitted by Respondents Boshnack, Friedman and Miller and impose the remedial sanctions and cease-and-desist order specified therein. Accordingly, IT IS ORDERED that: A.Respondents Boshnack, Friedman and Miller each cease and desist, pursuant to Section 21C of the Exchange Act, from causing any violation and any future violation of Section 15(b)(7) of the Exchange Act and Rule 15b7-1 thereunder. B.Respondents Boshnack and Friedman each 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. C.Effective immediately, Respondents Boshnack, Friedman and Miller each be, and hereby are, barred from association with any broker, dealer, investment company, investment adviser or municipal securities dealer. D.Respondent Boshnack pay, within three days of the entry of this Order, disgorgement in the amount of $89,000, plus reasonable interest thereon from October 1995 to the date of the Order in the amount of $17,881.42, for a total amount of $106,881.42, to the United States Securities and Exchange Commission. Such payment shall be: (a) made by United States postal money order, certified check, bank cashier's check or bank money order; (b) made payable to the United States Securities and Exchange Commission; (c) delivered by certified mail to the Comptroller, Securities and Exchange Commission, 450 Fifth Street, N.W., Mail Stop 0-3, Washington, D.C. 20549; and (d) submitted under cover letter which identifies Respondent Boshnack as a respondent in this proceeding, the file number of this proceeding, and the Commission's case number (NY-6236), a copy of which cover letter and money order or check shall be sent to Alexander M. Vasilescu, Senior Trial Counsel, Northeast Regional Office, Securities and Exchange Commission, 7 World Trade Center, 13th Floor, New York, New York 10048. E.Respondent Friedman pay, within three days of the entry of this Order, disgorgement in the amount of $9,100, plus reasonable interest thereon from October 1995 to the date of the Order in the amount of $1,828, for a total amount of $10,928, to the United States Securities and Exchange Commission. Such payment shall be: (a) made by United States postal money order, certified check, bank cashier's check or bank money order; (b) made payable to the United States Securities and Exchange Commission; (c) delivered by certified mail to the Comptroller, Securities and Exchange Commission, 450 Fifth Street, N.W., Mail Stop 0-3, Washington, D.C. 20549; and (d) submitted under cover letter which identifies Respondent Friedman as a respondent in this proceeding, the file number of this proceeding, and the Commission's case number (NY-6236), a copy of which cover letter and money order or check shall be sent to Alexander M. Vasilescu, Senior Trial Counsel, Northeast Regional Office, Securities and Exchange Commission, 7 World Trade Center, 13th Floor, New York, New York 10048. F.Respondent Miller pay, within three days of the entry of this Order, disgorgement in the amount of $5,000, plus reasonable interest thereon from October 1995 to the date of the Order in the amount of $1,004, for a total amount of $6,004, to the United States Securities and Exchange Commission. Such payment shall be: (a) made by United States postal money order, certified check, bank cashier's check or bank money order; (b) made payable to the United States Securities and Exchange Commission; (c) delivered by certified mail to the Comptroller, Securities and Exchange Commission, 450 Fifth Street, N.W., Mail Stop 0-3, Washington, D.C. 20549; and (d) submitted under cover letter which identifies Respondent Miller as a respondent in this proceeding, the file number of this proceeding, and the Commission's case number (NY- 6236), a copy of which cover letter and money order or check shall be sent to Alexander M. Vasilescu, Senior Trial Counsel, Northeast Regional Office, Securities and Exchange Commission, 7 World Trade Center, 13th Floor, New York, New York 10048. For the Commission, by its Secretary, pursuant to delegated authority. Jonathan G. Katz Secretary NEWS DIGEST COMMISSION BARS IRA A. BOSHNACK AND ANDREW S. FRIEDMAN, FORMER PRINCIPALS AT STRATTON OAKMONT, INC., AND DOUGLAS C. MILLER, A FORMER REGISTERED REPRESENTATIVE ASSOCIATED WITH STRATTON, AND ORDERS OTHER REMEDIAL RELIEF. The Commission settled public administrative and cease-and-desist proceedings pursuant to Section 8A of the Securities Act of 1933 ("Securities Act") and Sections 15(b), 19(h) and 21(C) of the Securities Exchange Act of 1934 ("Exchange Act"), against Ira A. Boshnack and Andrew S. Friedman, former principals at Stratton Oakmont, Inc., the now defunct former registered broker-dealer, and Douglas C. Miller, a former registered representative at Stratton. Without admitting or denying the Commission's findings, Boshnack, Friedman, and Miller consented to the entry of an Order finding that they each participated in a scheme to fraudulently pass the Series 7 and/or Series 24 licensing exams administered by the NASD, and, as a result, they willfully aided and abetted and caused violations by Stratton of Section 15(b)(7) of the Exchange Act and Rule 15b7-1 thereunder. The Order further finds that Boshnack and Friedman willfully violated Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, by making baseless price predictions to customers and unauthorized trades in customer accounts. The Order bars Boshnack, Friedman and Miller from associating with any broker, dealer, investment company, investment adviser or municipal securities dealer, directs them to cease and desist from committing or causing any violations and future violations of the above provisions, and directs them to each pay disgorgement and interest: Boshnack, $106,881.42; Friedman, $10,928; and Miller, $6,004. Alexander M. Vasilescu NERO (212) 748-8158 SERVICE LIST Rule 141 of the Commission's Rules of Practice provides that the Secretary, or another duly authorized officer of the Commission, shall serve a copy of Order Making Findings And Imposing Remedial Sanctions And A Cease-And-Desist Order on each person named as a party in the order and their legal agent. The attached Order Making Findings And Imposing Remedial Sanctions And A Cease-And- Desist Order has been sent to the following parties and other persons entitled to notice: The Honorable Brenda P. Murray Chief Administrative Law Judge Securities and Exchange Commission Mail Stop 11-6 450 Fifth Street, N.W. Washington, D.C. 20549 Securities and Exchange Commission Northeast Regional Office 7 World Trade Center 13th Floor New York, New York 10048 Attn:Alexander M. Vasilescu Senior Trial Counsel Securities and Exchange Commission Branch of Regional Office Assistance Mail Stop 8-9 450 Fifth Street, N.W. Washington, D.C. 20549 Attn:Jill M. Peterson Senior Counsel Richard Quadrino, Esq. Quadrino & Schwartz 666 Old County Road Suite 207 Garden City, New York 11530 Attorney for Ira A. Boshnack Douglas C. Miller 817 Wilshire Court, Apt. C Metairie, Louisiana 70003 Ira A. Boshnack 4400 West Sample Road Buildings 136-208 Coconut Creek, Florida 33073 Andrew S. Friedman 42 Colgate Drive Plainview, New York 11803 Richard Quadrino, Esq. Quadrino & Schwartz 666 Old County Road Suite 207 Garden City, New York 11530 Re:In the Matter of Ira A. Boshnack, Andrew S. Friedman & Douglas C.Miller, Admin. Proc., File No. 3-9491 Dear Mr. Quadrino: Please find enclosed an Order Making Findings And Imposing Remedial Sanctions And A Cease-And-Desist Order ("The Order") against your client, Ira A. Boshnack ("Boshnack") in the above- captioned matter. If you have any questions, or wish to discuss any aspect of the proceedings, you may communicate with Alexander M. Vasilescu, Senior Trial Counsel, at the Commission's Northeast Regional Office, (212) 748-8158, 7 World Trade Center, New York, New York 10048. Sincerely, Jonathan G. Katz Secretary Enclosure Mr. Ira A. Boshnack 4400 West Sample Road Buildings 136-208 Coconut Creek, Florida 33073 Re:In the Matter of Ira A. Boshnack, Andrew S. Friedman & Douglas C.Miller, Admin. Proc., File No. 3-9491 Dear Mr. Boshnack: Please find enclosed an Order Making Findings And Imposing Remedial Sanctions And A Cease-And-Desist Order ("The Order") against you in the above-captioned matter. If you have any questions, or wish to discuss any aspect of the proceedings, you may communicate with Alexander M. Vasilescu, Senior Trial Counsel, at the Commission's Northeast Regional Office, (212) 748-8158, 7 World Trade Center, New York, New York 10048. Sincerely, Jonathan G. Katz Secretary Enclosure Mr. Andrew S. Friedman 42 Colgate Drive Plainview, New York 11803 Re: In the Matter of Ira A. Boshnack, Andrew S. Friedman & Douglas C. Miller, Admin. Proc., File No. 3-9491 Dear Mr. Friedman: Please find enclosed an Order Making Findings And Imposing Remedial Sanctions And A Cease-And-Desist Order ("The Order") against you in the above-captioned matter. If you have any questions, or wish to discuss any aspect of the proceedings, you may communicate with Alexander M. Vasilescu, Senior Trial Counsel, at the Commission's Northeast Regional Office, (212) 748-8158, 7 World Trade Center, New York, New York 10048. Sincerely, Jonathan G. Katz Secretary Enclosure Mr. Douglas C. Miller 817 Wilshire Court Apartment C Metairie, Louisiana 70003 Re: In the Matter of Ira A. Boshnack, Andrew S. Friedman & Douglas C. Miller, Admin. Proc., File No. 3-9491 Dear Mr. Miller: Please find enclosed an Order Making Findings And Imposing Remedial Sanctions And A Cease-And-Desist Order ("The Order") against you in the above-captioned matter. If you have any questions, or wish to discuss any aspect of the proceedings, you may communicate with Alexander M. Vasilescu at the Commission's Northeast Regional Office, (212) 748-8158, 7 World Trade Center, New York, New York 10048. Sincerely, Jonathan G. Katz Secretary Enclosure