Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

A Member of the Law Professor Blogs Network

Tuesday, September 11, 2007

Court Enforces SEC's Disgorgement Order Against Jett

On September 7, 2007, the United States District Court for the Southern District of New York entered a judgment enforcing the SEC's March 5, 2004 Opinion and Order directing that Orlando Joseph Jett pay disgorgement of $8.21 million and a $200,000 civil penalty, and ordering Jett to cease and desist from future violations of certain provisions of the federal securities laws.  The SEC found that Jett, while a government bond trader, managing director, and senior vice president of Kidder, Peabody & Co., then a registered broker-dealer, had, with fraudulent intent, exploited an anomaly in Kidder's automated trading records system to book non-existent profits of approximately $264 million, when in fact Jett's trading activities caused Kidder losses of $75 million. It further found that Jett's actions constituted a scheme to defraud under Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and that Jett's actions had violated the "books and records" provisions of Section 17(a) of the Securities Exchange Act of 1934 and Rule 17a-3(a)(2) thereunder.  The SEC barred Jett from association with any registered broker-dealer, directed Jett to cease and desist from future violations of these provisions of the federal securities laws, and ordered Jett to disgorge the $8.21 million in bonuses Jett had received as a result of his fraudulent transactions and pay a civil penalty of $200,000.

The Commission brought an action in 2006 to enforce the Commission's order against Jett. The Court's opinion held that Jett could not challenge the merits of the Commission's order in the enforcement proceedings, because Jett had not filed a timely appeal to the Court of Appeals, which has exclusive jurisdiction to review Commission orders.

http://lawprofessors.typepad.com/securities/2007/09/court-enforces-.html

SEC Action | Permalink

TrackBack URL for this entry:

http://www.typepad.com/services/trackback/6a00d8341bfae553ef00e54ef03c618834

Listed below are links to weblogs that reference Court Enforces SEC's Disgorgement Order Against Jett:

Comments

Post a comment