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Tuesday, November 30, 2004
Indiana Decisions - 7th Circuit posts one
Monetta Finan Inc v. SEC (On Petition for Review of an Order of
the Securities Exchange Commission)
Before RIPPLE, KANNE, and WILLIAMS, Circuit Judges.
WILLIAMS, Circuit Judge. Monetta Financial Services, Inc.
(“MFS”), a registered investment adviser, and its president,
Robert Bacarella, seek review of a Securities and Exchange
Commission (“SEC or Commission”) order finding that MFS
violated Section 206(2) of the Investment Advisers Act by
failing to disclose that it allocated shares of Initial Public
Offerings (“IPOs”) to certain directors of its mutual fund
clients and that Bacarella aided and abetted in the violation.
While we agree with the SEC that MFS violated Section
206(2), we find that there is insufficient evidence to support
a finding that Bacarella aided and abetted the violation.
Likewise, we find that the sanctions the SEC imposed
against MFS were excessive. * * *We, therefore, vacate the SEC’s order imposing sanctions
and the portion of the SEC’s opinion which reasons that
sanctions are appropriate, and we remand to the Commission
for reconsideration in a manner consistent with this
opinion of the sanctions imposed against MFS.
Posted by Marcia Oddi on November 30, 2004 11:42 AM
Posted to Indiana Decisions