LexisNexis Corporate & Securities Law Community 2011 Top 50 Blogs

Bon mots

"You can observe a lot just by watching." Yogi Berra

"We do not distain to borrow wit or wisdom from any man who is capable of lending us either." Henry Fielding, Tom Jones

"In our complex society the accountant's certificate and the lawyer's opinion can be instruments for inflicting pecuniary loss more potent than the chisel or the crowbar." United States v. Benjamin, 328 F.2d 854, 862 (2d Cir. 1964)

Exchange Bar Lifted For Failure To Prove Service

Michael Picozzi III, Exchange Act Rel. 65569, October 14, 2011

Picozzi was barred by PCX for failing to provide information during an exchange investigation. PCX's successor, NYSE did not oppose the appeal due to the existence of an incomplete evidentiary record. Apparently it had no evidence that Picozzi was served with process in connection with the disciplinary proceeding. Accordingly the Commission set aside the findings of violations and sanctions.

Picozzi had sold his firm by the time PCX sent notice of the complaint to him at his former firm's address. He claimed that it was not forwarded to him. A bar was entered by default against him in 2004. Picozzi claims he never learned of the bar until he attempted to re-enter the industry following the expiration of a non-compete agreement in 2010.

There record included Picozzi's claims about not receiving notice. NYSE admitted there is virtually nothing in the record concerning service of process on Picozzi. It also admitted that due to passage of time it cannot determine whether Picozzi engaged in any improper conduct in connection with the PCX investigation. As a result it did not oppose Picozzi's petition.

In granting the petition the Commission noted that by doing so it was relying on NYSE's unique stance and the lack of information in the record about service of process on Picozzi. It stated that its ruling "in no way diminishes established precedent that a respondent's lack of awareness of official regulatory correspondence is not a defense where evidence shows that the regulatory entity properly sent correspondence to the address that the respondent provided to the regulatory agency."

Such cases include Dennis A. Pearson, Jr., Securities Exchange Act Rel. No. 54913 (Dec. 11, 2006), 89 SEC Docket 1627, 1638 (noting that "[i]t is the responsibility of NASD members and their associated persons to keep NASD apprised of any changes in their addresses, and a failure to respond to NASD in connection with an investigation . . . is not excused by that person's having temporarily moved from the address listed in the CRD"); Warren B. Minton, Jr., 55 S.E.C. 1170, 1177 n.15 (noting that associated persons have "a continuing duty to notify the [NASD] ... of [their] current address, and to receive and read mail sent to [them] at that address" (quotation omitted)).