UNITED STATES OF AMERICA before the SECURITIES AND EXCHANGE COMMISSION Securities Exchange Act of 1934 Release No. 40174 / July 7, 1998 Administrative Proceeding File No. 3-9645 : In the Matter of : ORDER INSTITUTING PUBLIC ADMINISTRATIVE : PROCEEDINGS PURSUANT TO SECTION 15(b) OF HERNAN JOSE PEREZ : THE SECURITIES EXCHANGE ACT OF 1934, : MAKING FINDINGS AND IMPOSING REMEDIAL Respondent. : SANCTIONS : I. The Securities and Exchange Commission deems it appropriate and in the public interest that administrative proceedings be instituted against Hernan Jose Perez ("Respondent") pursuant to Section 15(b) of the Securities Exchange Act of 1934 ("Exchange Act"). In anticipation of the institution of these proceedings, Respondent has submitted an Offer of Settlement ("Offer") which the Commission has determined to accept. Solely for the purpose of these proceedings 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 any of the findings contained herein, except as to the jurisdiction of the Commission over him and over the subject matter of these proceedings, and as to the findings contained in Section II.A. and the entry of the injunction set forth in Section II.B., which are admitted, Respondent consents to the entry by the Commission of this Order Instituting Public Administrative Proceedings Pursuant to Section 15(b) of the Exchange Act, Making Findings and Imposing Remedial Sanctions ("Order"). Accordingly, IT IS HEREBY ORDERED that proceedings against Respondent be and hereby are instituted. II. On the basis of this Order and the Offer, the Commission finds that: A.From at least November 1995 to September 1997, Respondent was a registered representative associated with a broker-dealer registered with the Commission. B.On October 10, 1997, the Commission filed a complaint in the United States District Court for the District of Puerto Rico, SEC v. Hernan Jose Perez, et al., Civil Action No. 97-2502SEC (D. Puerto Rico), naming Respondent as Defendant (the "Complaint"). On November 26, 1997 the Court entered a permanent injunction against Respondent enjoining him from future violations of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. C.The Commission's Complaint alleged, among other things, that from at least December 1995 until September 1997, Respondent misappropriated approximately $2.4 million from at least eight of his customers and one other investor who provided funds to open an account. The Complaint further alleged that to accomplish his scheme, Respondent either falsely endorsed customer checks and deposited them into his own account or that of a third party or fraudulently induced his customers to endorse checks over to him. III. Based on the foregoing, the Commission deems it appropriate and in the public interest to accept the Offer submitted by Respondent, and accordingly, IT IS HEREBY ORDERED, that: Respondent is hereby barred from association with any broker, dealer, municipal securities dealer, investment adviser or investment company. By the Commission. Jonathan G. Katz Secretary 2 SERVICE LIST Rule 141 of the Commission's Rules of Practice provides that the Secretary, or another duly authorized officer of the Commission, shall give a copy of the Order Instituting Public Administrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934, Making Findings and Imposing Remedial Sanctions to each person named as a party in the order and their legal agent. The attached Order Instituting Public Administrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934, Making Findings and Imposing Remedial Sanctions has been sent to the following parties and other persons entitled to notice: Chief Administrative Law Judge Brenda Murray Office of Administrative Law Judges Stop 11-6 Securities and Exchange Commission 450 5th Street, N.W. Washington, D.C. 20549 Laurie E. Stewart, Esq. Branch of Regional Office Assistance Stop 8-9 Division of Enforcement Securities and Exchange Commission 450 5th Street, N.W. Washington, D.C. 20549 Jon B. Jordan, Esq. Securities and Exchange Commission Southeast Regional Office 1401 Brickell Avenue,Suite 200 Miami, Florida 33131 Harold D. Vicente, Esq. Capital Center Building I - PHI Suite 1201 Arterial Hostos Hato Rey, PR 00918 Counsel for Respondent Hernan Jose Perez Centauro 585,Esquina Polar Altamira, Rio Piedras, PR 00920 SUMMARY FOR NEWS DIGEST ADMINISTRATIVE PROCEEDINGS ENTERED AGAINST AND SIMULTANEOUSLY SETTLED BY HERNAN JOSE PEREZ The Commission announced that it instituted and simultaneously settled public administrative proceedings pursuant to Section 15(b) of the Securities Exchange Act of 1934 ("Exchange Act") against Hernan Jose Perez ("Perez"), of Rio Piedras, Puerto Rico. The order instituting the proceedings ("Order") finds from November 1995 to September 1997, Perez was a registered representative associated with a broker-dealer registered with the Commission. The Order further finds that on November 26, 1997, the United States District Court for the District of Puerto Rico entered a permanent injunction against Perez enjoining him from future violations of the antifraud provisions of the Exchange Act and the Securities Act of 1933. The injunction followed a civil action initiated by a complaint filed by the Commission on October 10, 1997, alleging that from at least December 1995 through September 1997, Perez misappropriated approximately $2.4 million from at least eight of his customers and one other investor who provided funds to open an account. The complaint further alleged that to accomplish his scheme, Perez either falsely endorsed customer checks and deposited them into his own account or that of a third party, or fraudulently induced his customers to endorse checks over to him. In the Order, the Commission ordered that Perez be barred from association with any broker, dealer, municipal securities dealer, investment adviser or investment company. Contact Person: Jon B. Jordan (305) 982-6353 SECURITIES EXCHANGE ACT OF 1934 RELEASE NO. ADMINISTRATIVE PROCEEDING FILE NO. ADMINISTRATIVE PROCEEDINGS ENTERED AGAINST AND SIMULTANEOUSLY SETTLED BY HERNAN JOSE PEREZ The Commission announced that it instituted and simultaneously settled public administrative proceedings pursuant to Section 15(b) of the Securities Exchange Act of 1934 ("Exchange Act") against Hernan Jose Perez ("Perez"), of Rio Piedras, Puerto Rico. The order instituting the proceedings ("Order") finds from November 1995 to September 1997, Perez was a registered representative associated with a broker-dealer registered with the Commission. The Order further finds that on November 26, 1997, the United States District Court for the District of Puerto Rico entered a permanent injunction against Perez enjoining him from future violations of the antifraud provisions of the Exchange Act and the Securities Act of 1933. The injunction followed a civil action initiated by a complaint filed by the Commission on October 10, 1997, alleging that from at least December 1995 through September 1997, Perez misappropriated approximately $2.4 million from at least eight of his customers and one other investor who provided funds to open an account. The complaint further alleged that to accomplish his scheme, Perez either falsely endorsed customer checks and deposited them into his own account or that of a third party, or fraudulently induced his customers to endorse checks over to him. In the Order, the Commission ordered that Perez be barred from association with any broker, dealer, municipal securities dealer, investment adviser or investment company.