November 29, 2011
SEC Hears Cross-Appeals in Proceeding Raising Issues of Supervision
The SEC will hold an open meeting on December 6 to hear oral argument in an administrative proceeding that generated a fair amount of press. The matter concerns Theodore W. Urban, formerly general counsel, head of compliance, and member of the Board of Directors of Ferris, Baker Watts, Inc. (“FBW,” now operating under the name RBC Wealth Management), a registered broker-dealer and investment adviser; Urban and the Division of Enforcement filed cross-appeals from the decision of an administrative law judge.
The law judge found that Stephen Glantz, an FBW registered representative, engaged in various securities law violations while employed by FBW. She further found that Glantz was subject to Urban's supervision within the meaning of Section 15(b) of the Securities Exchange Act of 1934 and Section 203(f) of the Investment Advisers Act of 1940; however, the law judge dismissed the proceeding against Urban because she concluded that Urban did not fail to exercise that supervision reasonably.
Among the issues likely to be argued are (1) whether Glantz engaged in violations of the securities laws; (2) whether Urban was a supervisor of Glantz under applicable law; (3) if so, whether Urban failed to exercise that supervision reasonably; and (4) if so, whether and to what extent sanctions should be imposed.
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