Defendant Name: Southwest Securities, Inc.

Defendant Type: Subsidiary of Public Company
Public Company Parent: SWS Group, Inc.
SIC Code: 6211
CUSIP: 78503N10

Document Reference: 34-51002

Document Details

Legal Case Name In the Matter of Southwest Securities, Inc., Daniel R. Leland, Kerry M. Rigdon, and Kevin J. Marsh
Document Name Order Instituting Public Administrative Proceedings, Making Findings, and Imposing Remedial Sanctions, Pursuant to Section 15(b) of the Securities Exchange Act of 1934 and Section 203(f) of the Investment Advisers Act of 1940, and Instituting Cease-and-Desist Proceedings and Imposing a Cease-and-Desist Order, Pursuant to Sections 21C of the Securities Exchange Act of 1934 and Section 9(f) of the Investment Company Act of 1940
Document Date 10-Jan-2005
Document Format Administrative Proceeding
File Number 3-11793
Allegation Type Broker Dealer
Document Summary On January 10, 2005, the SEC instituted settled administrative and cease-and-desist proceedings. According to the SEC: "Between October 2002 and September 2003 (the 'Relevant Period'), Southwest and three of its supervisors failed reasonably to supervise three registered representatives with a view to preventing their violations of the federal securities laws. Two registered representatives at Southwest's downtown Dallas branch office engaged in an illegal market timing scheme, and a third engaged both in a market timing scheme and in late trading, on behalf of two of Southwest's hedge fund adviser customers. The three registered representatives - Scott Gann, George Fasciano and a third broker ('Broker Doe') (collectively, the 'Brokers') - defrauded hundreds of mutual funds and their shareholders by engaging in a series of surreptitious "masking" activities, designed to circumvent restrictions that the mutual funds imposed on market timing. Broker Doe also defrauded many of the same mutual funds and their shareholders by systematically late trading the mutual funds' shares. Through these activities, the Brokers violated the antifraud provisions of the federal securities laws."

Disgorgement & Penalty Information

Resolutions
Cease and Desist Order
Censured
Compliance Related Independent Consultant
Other Compliance Related Undertaking
Various undertakings
Cooperation Before the Resolution
Remedial Acts or Efforts Before the Resolution
Fair Funds
Monetary Penalties:

Disgorgement

Individual:     $2,000,000.00 Shared:    

Civil Penalty

Individual:     $8,000,000.00 Shared:    

Pre-Judgment Interest

(Penalty was noted in document, but no amount was listed)

Total Penalty

Individual:     $10,000,000.00 Shared:    

Related Documents:

34-62809 01-Sep-2010 Administrative Proceeding
Notice of Proposed Plan of Distribution and Opportunity to Comment
On September 1, 2010, the SEC issued a Notice of Proposed Plan of Distribution and Opportunity for Comment.
34-62809-pdp 01-Sep-2010 Administrative Proceeding
Proposed Plan of Distribution
On September 1, 2010, a Proposed Plan of Distribution was published.
34-62810 01-Sep-2010 Administrative Proceeding
Order Appointing Fund Administrator and Waiving the Bond Requirement
On September 1, 2010, the SEC issued an Order Appointing Fund Administrator and Waiving the Bond Requirement.
34-63172 25-Oct-2010 Administrative Proceeding
Order Approving Plan of Distribution
This order, filed on October 25, 2010, approves the plan of distribution relating to the administrative and cease and desist proceedings against Southwest Securities and other individuals. The Plan provides for the distribution of funds to eligible mutual funds that were harmed by the actions of market timers. The fair fund provides for total distributions of $10,276,002.
34-63172-fdp 25-Oct-2010 Administrative Proceeding
Final Plan of Distribution
This document represents the Final Plan of Distribution for the Matter of Southwest Securities, et. al. The Initial Order in this matter found that "between October 2002 and September 2003, the Respondents failed reasonably to supervise three registered representatives who engaged in an illegal market timing scheme." The Respondents are required to pay $10.3 million and the plan of distribution sets up the procedures for making payments to affected claimants.
34-65016 02-Aug-2011 Administrative Proceeding
Order Directing Disbursement of Fair Fund
On August 2, 2011, the SEC ordered that: "the Commission staff, through FMS [the U.S. Department of Treasury's Financial Management Service], shall disburse $5,073,737 of the Fair Fund monies to eligible funds as provided in the Plan. The remaining portion of the Fair Fund shall, upon termination of the Fair Fund, be sent to the U.S. Treasury."
34-81064_3-11793 30-Jun-2017 Administrative Proceeding
Notice of Name Change of Appointed Tax Administrator
On June 30, 2017, the SEC announced a Name Change of Appointed Tax Administrator, and amended the Omnibus Order, beginning June 2017 and for calendar year 2018, to replace all references to Damasco with "Miller Kaplan Arase LLP which acquired Damasco & Associates LLP" in order to reflect Damasco's name change.
34-82000 02-Nov-2017 Administrative Proceeding
Order Authorizing the Southwest Securities, Inc., Transfer to the U.S. Treasury of the Remaining Funds and Any Funds Returned To The Fair Fund In The Future, Discharging the Fund Administrator, and Terminating the Fair Fund
According to the SEC: "On January 10, 2005, the United States Securities and Exchange Commission ("Commission") issued an Order Instituting Public Administrative Proceedings, Making Findings, and Imposing Remedial Sanctions, Pursuant to Section 15(b) of the Securities Exchange Act of 1934 and Section 203(f) of the Investment Advisers Act of 1940, and Instituting Cease-and-Desist Proceedings and Imposing a Cease-and-Desist Order, Pursuant to Section 21C of the Securities Exchange Act of 1934 and Section 9(f) of the Investment Company Act of 1940 (the "Order")1 against Southwest Securities, Inc. ("Southwest"), Daniel R. Leland, Kerry M. Rigdon, and Kevin J. Marsh (collectively, the "Respondents"). . . The Order further established a Fair Fund pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002, as amended, for the total amount ordered (the "Fair Fund"), to be distributed pursuant to a Plan of Distribution. . . The Commission staff has verified that all taxes, fees, and expenses have been paid, and the Commission is in possession of the remaining funds. . . Accordingly, it is ORDERED that: A. The remaining Fair Fund balance of $6,544,967.41 and any funds returned to the Fair Fund in the future, shall be transferred to the U.S. Treasury; B. The Fund Administrator, Gilardi & Co., L.L.C., is discharged; and C. The Fair Fund is terminated."

Other Defendants in Action:

Daniel R. Leland
Kerry M. Rigdon
Kevin J. Marsh

Related Actions:

SEC v. Scott B. Gann and George B. Fasciano
Scott B. Gann
George B. Fasciano
In the Matter of Scott B. Gann
Scott B. Gann