-BEFORE : Samue1 Binder , Hearing Examiner APPEARANCES: Donald J. Robinson, Esq.,

Y i l e s Coon, Esq. ,

, c , , - r, -..= u ~ v i s i o n of T raa ing and Narke t s , S e c u r i t i e s and Exchange C~mmission.

Nessrs . Putney, Twombly, Hall iS Skidmore, Attorneys f o r Reuben Rose 6 Co., ancl Paul Rosen tha l ,

165 Broadway, New York, New York

By: Howard Ordman and Harold Hoffman, Esqs., of counse l .

h e s s r s . Rembar & Zolo t a r , At to rneys f o r Reuben Rose 6 Co., and Pau l Rosen tha l ,

521 F i f t h Avenue, New York, New York

By: George Z o l o t a r , Esq., of counsel .

Bruce H. Goldstone, Esq. At to rney f o r Lucas D. C a s a r e l l a ,

Pa 0. BOX J,

Kenvi 1 , New J e r s e y

Arthur H . Beyer , Esq.

At torney f o r Joseph Winkler and Louis Chazan, c o - p a r t n e r s ,

doing bus ine s s under t h e f i r m name and s t y l e of

Winkler Chase 6 Co., -92 L i b e r t y S t r e e t , New York 6 , New York

Robert R. B l a s i , Esq.

At to rney f o r F. S. Johns and Go., Inc . and Globa l

P lann ing Corp.

Newark, New Jersey -Frank Metro, Esq.

Attorney f o r F. S, Johns & Co., D i v e r s i f i e d Funding, Inc . ,

Global P lann ing , John A . T r i c o l i , Jr . , Lawrence T r i c o l i and

Sl l v e r Sp r ings , Inc . ,

1060 Broad S t r e e t ,

Newark, New J e r s e y

I r w i n L. Germaise, Eaq. At to rney f o r Regina Dlugash, d / b / a Douglas E n t e r p r i s e s , and J a c k Dlugash

217 Broaaway,

New York, New York

Messrs. Herola, Luca, Persky and Wozer, A t t o r n e y s f o r Marvin Abel,

150 Broaaway , I New York 38, New York

\

Kessrs. t l e tzger , Rorenberg & C a l d f i n g e r At to rneys f o r W i l l i e m R o s e n t h a l ,

225 West 3 4 t h S t r e e t , New York 1, N e w York

By: J o r d a n R. Metzger ana G e r a l d P. Kosenberg, Esqs . , of counse l .

George A. Re in , P r o se 37 W. 72nd S t r e e t New York 2 3 , New York

John A. T r i c o l i , Jr., p r o s,e 20 Branf o r d P l a c e Newark, New J e r s e y

These are c o n s o l i d a t e d p u b l i c p roceed ings h e l d pursuan t t o

S e c t i o n 1 5 ( b ) , 15A and 1 9 ( a ) ( 3 ) of t h e S e c u r i t i e s Exchange Act of

1934 ("Exchange Act*') t o d e t e r m i n e , among o t h e r t h i n g s , whether

it is n e c e s s a r y o r a p p r o p r i a t e i n t h e p u b l i c i n t e r e s t o r f o r t h e

p r o t e c t i o n o f i n v e s t o r s ( 1 ) t o r evoke t h e b r o k e r - a e a l e r r e g i s t r a t i o n

of F. S. J o h n s & Co., [Znc. ("F. S. Johns") , o r Globa l P lann ing

C o r p o r a t i o n ("Global*') , o r Regina Dlugash d / b / a Douglas E n t e r p r i s e s

(uDouglas") , o r E l i o t , R o b e r t s & Co., Inc . ( "E l io t Rober t s " ) , o r

Reuben Rose & Co., Inc . ("Reuben Rosetq) o r Wink le r , Chase Company ("Winkler

Chase"), h e r e i n a f t e r r e f e r r e d t o as r e g i s t r a n t s ; ( 2 ) t o suspend t h e b r o k e r -

d e a l e r r e g i s t r a t i o n of any of t h e r e g i s t r a n t s pending f i n a l d e t e r -

mina t ion o f t h e q u e s t i o n of r e v o c a t i o n ; ( 3 ) t o suspend f o r a p e r i o d

n o t exceed ing t w e l v e months o r t o e x p e l F. S. J o h n s , Douglas o r

Reuben Rose & Co., Inc . from membership i n t h e Na t iona l A s s o c i a t i o n

of S e c u r i t i e s Dealers; ( 4 ) t o suspend f o r a p e r i o d n o t exceed ing twe lve -

months, o r t o e x p e l Reuben Rose & Co., Inc . from membership i n t h e

N e w York and American S t o c k Exchanges; and ( 5 ) whether , w i t h i n t h e

meaning of S e c t i o n 15A(b)(4) of t h e Exchange Act t h e Comn~ission s h o u l d

f i n d t h a t J o h n A. T r i c o l i , J r . ("John T r i c o l i " ) , John S i l v e s t _ r i

("Si l v e s t r i M ) , Anthony Grausso ("Grausso") , S a l v a t o r e F a c c i p o n t i , a / k / a

S a l P o n t i ("Pont i") , E. Ronald Lappe ("Lappe"), Aaron L i c h e n s t e i n ,

a / k / a Aaron Lang ( " ~ a n ~ ' s ) , George Rein ("Reina') , Harry Rower ("Rower"),

Lucas E, C a s a r e l l a ( "Casa re l l a" ) , Joseph T r i c o l i , Lawrence T r i c o l i ,

Harry Weintraub, a / k / a Harry Win te r s ("Weintraub*'), J a c k Dlugash,

- 2 -

Marvin Abel ("Abe 1") , Edward McNamara ("hcNamara4') , Robert Shafarman

("Shafarman"), Pau l Rosen tha l , W i l l i a m Rosen tha l , Joseph Winkler

("Winkler"), and Louis Chazan ("Chazan"), o r any of them, a r e c a u s e s - I I ; 1i

of any Order of r e v o c a t i o n , suspens ion o r e x p u l s i o n which may be ii ; 1

e n t e r e d h e r e i n . i 1 . . . .,, 1;- 1'. ,,% .:o,5;.-.#.

On J u l y 15, 1963, t h e Commission i s s u e d a n o r d e r i n s t i t u t ng

proceed ings under t h e a n t i - f r a u u p r o v i s i o n s of t h e S e c u r i t i e s A c t s

wherein i t a l l e g e d t h a t d u r i n g t h e pe r iod from about J a n u a r y 24 , 1961

t o abou t J u n e 20, 1962, t h e b r o k e r - d e a l e r s r e g i s t e r e d under t h e

Exchange A c t ( R e g i s t r a n t s ) , John T r i c o l i , S i l v e s t r i , Grausso, P o n t i ,

Lappe, Lang, Re in , Rower, C a s a r e i l a , Joseph T r i c o l i , Weinbtaub,

Lawrence T r i c o ~ i , J a c k Dlugash, Abel , kcNamera, P a u l Rosen tha l , W i l l i a m

R o s e n t h a l , Wink le r , Chazan, Shafarman, h e r e i n a f t e r sometimes c o l l e c t i v e l y

r e f e r r e d t o as r e s p o n d e n t s , s i n g l y and i n c o n c e r t , w i l f u l l y v i o l a t e d

and a i a e d , a b e t t e d and a s s i s t e d w i l f u l v i o l a t i o n s of S e c t i o n 1 7 ( a )

of t h e S e c u r i t i e s Act o f 1933 ( " S e c u r i t i e s Act") and S e c t i o n s 10(b)-

and 1 5 ( c ) ( l ) of t h e Exchange Act and Rules 17 CFR 240.10b-5 and

17 CFR 2 4 0 . ~ 5 ~ 1 - 2 the reunder ( r e f e r r e d t o h e r e i n a f t e r as Rules l ~ b - 5

and 15c-2; t h a t d u r i n g t h e pe r iod from approx imate ly October 12, 1961

t o approx imate ly March 26, 1962, r e s p o n a e n t s , s i n g l y and i n c o t ~ c e r t ,

w i l f u l l y v i o l a t e d S e c t i o n 10(b) of t h e Exchange A c t and Rule 17 CFR 240.10b-6

t h e r e u n d e r ( r e f e r r e a to h e r e i n a f t e r as Rule lob-6) ; t h a t d u r i n g t h e

p e r i o d from October 12 , 1961 to approx imate ly March 26, 1962, F. S. Johng

and Douglas w i l f u l l y v i o l a t e d S e c t i o n l S ( c ) ( l ) o f t h e Exchange Act

and Rule 17 CE'R 2 4 0 . 1 5 ~ 1 - 8 t h e r e u n a e r ( r e f e r r e d t o h e r e i n a f t e r as

Rule 1 5 ~ 1 - 8 1 , and John T r i c o l i , ~ i l v e s t r i , Grausso , P o n t i , Lappe,

Lang , R e i n , R o w e r , Casarella, Lawrence T r i c o l i , J a c k Dlugash, Abel ,

and HcNarnara a i d e d and a b e t t e d such v i o l a t i o n s ; t h a t F. S. J o h n s and

Globa l w i l f u l l y v i o l a t e d S e c t i o n l S ( b ) o f t h e Exchange Act and Rule

17 CE'R 240.15b-2 t h e r e u n d e r ( r e f e r r e d t o h e r e i n a f t e r as Rule l5b-21,

and John T r i c o l i , S i l v e s t r i , Grausso , and Lawrence T r i c o l i , s i n g l y

and i n c o n c e r t , a i d e d and a b e t t e d such w i l f u l v i o l a t i o n s ; F. S. J o h n s

w i l f u l l y v i o l a t e d S e c t i o n l 5 ( b ) of t h e Exchange Act and Rule 15b-2

t h e r e u n d e r , and John T r i c o l i , S i l v e s t r i and Grausso , s i n g l y and i n

c o n c e r t , a i d e d s u c h v i o l a t i o n s ; and t h a t E l i o t Rob,erts w i l f u l l y

v i o l a t e d S e c t i o n 15(b) of t h e Exchange Act and Rule 15b-2 t h e r e u n d e r ,

and Shafarman a i d e d and a b e t t e d such v i o l a t i o n s .

A p u b l i c h e a r i n g of t h e i s s u e s w a s h e l d between J a n u a r y 7 ,

1964 and March 18, 1964, b e f o r e t h e unders igned-hear ing examiner.

A l l r e g i s t r a n t s appeared e x c e p t E l i o t R o b e r t s . With r e s p e c t

t o t h e o t h e r r e s p o n d e n t s , t h e l , f o l l o w i n g a p p e a r e d and p a r t i c i p a t e d ;

John A . T r i c o l i , Jr ., Lawrence T r i c o l i , J o s e p h T r i c o 11, Pont 1, Casare l la, J a c k Dlugash, McNamara, Pau l R o s e n t h a l , W i l l i a m R o s e n t h a l , J o s e p h Wink le r ,

- -1/ " -2/ Pa ru in Abel , Louis Chazan, and George Rein.

On January 31, 1964, counse l f o r t h e D iv i s i on of Trading and 0 6

Markets (q 'Divis ion") , pursuan t t o Rule 6 ( d ) of t h e Commission's Rules

of P r a c t i c e , moved t o amend t h e o r d e r f o r proceedings i n t h i s ma t t e r

s o t h a t subparagraph J of P a r t I of t