Friday, June 15, 2007
An Administrative Law Judge dismissed the SEC's charges against Scott G. Monson, the General Counsel of J.B. Oxford Holding and its brokerage subsidiary, relating to the firm's permitting favored clients to engage in late trading in violation of Rule 22c-1. Although the judge found that the evidence that the firm violated Rule 22c-1 was overwhelming, he held that the SEC did not prove that Monson should have known that his conduct would result in late trading violations. He had no actual knowledge of the Rule and he had no assigned duty or delegated responsibility to research legal implications of a trading deadline. Thus, he was not a cause of the firm's violations.