SEC v. W.J. Nolan & Co., Inc.; and William J. Nolan, No. LR-17907, District of Columbia (Dec. 20, 2002) — Press Release
raw: W.J. Nolan & Co., Inc.
W.J. Nolan & Co., Inc., No. LR-17907 (Dec. 20, 2002)
William J. Nolan, president and owner of broker-dealer W.J. Nolan & Co., Inc., was accused by the SEC of evading a $192,028.29 court-ordered disgorgement and interest payment by selling the firm’s assets for $750,000 and transferring the funds to his personal accounts after consenting to SEC findings of churning, unsuitable penny stock trades, and supervision failures, prompting a civil contempt motion seeking personal liability.
The SEC ordered W.J. Nolan & Co., Inc. and its president William J. Nolan to pay $192,028.29 in disgorgement and prejudgment interest after finding violations including churning customer accounts, making unsuitable and unauthorized trades in microcap and penny stocks, failing to supervise registered representatives, and violating penny stock disclosure rules. Nolan consented to the September 2001 order but subsequently caused the firm to sell its assets for $750,000 and deposited the proceeds into his personal bank accounts to evade payment. In December 2002, the SEC filed a motion for civil contempt, seeking to hold Nolan personally liable for the unpaid judgment and demanding immediate payment of the original amount plus post-judgment interest.
In September 2001, the SEC found that W.J. Nolan & Co., Inc. and its president William J. Nolan violated securities laws by engaging in churning, making unsuitable and unauthorized trades in microcap and penny stocks, failing to supervise registered representatives, and breaching penny stock disclosure rules under Sections 15(b)(4), 15(b)(7), and 15(g) of the Exchange Act. Nolan consented to an order requiring the firm to pay $192,028.29 in disgorgement and prejudgment interest within 30 days. Instead of complying, Nolan orchestrated the sale of the firm’s assets for $750,000 in October and November 2001 and transferred the proceeds into his personal bank accounts to avoid fulfilling the judgment. The firm then filed a Form BDW to withdraw its broker-dealer registration, further signaling intent to evade liability. On December 17, 2002, the SEC filed a motion for civil contempt in U.S. District Court, alleging that Nolan’s actions constituted deliberate asset dissipation and obstruction of a court order. The Commission sought to hold Nolan personally liable for the unpaid amount and demanded immediate payment of the original disgorgement, prejudgment interest, and additional post-judgment interest. The case highlighted the SEC’s enforcement of personal accountability when corporate officers misuse corporate assets to evade regulatory penalties.
Extracted insights
- $750K $750,000 $100K–$1M
- $192K $192,028 $100K–$1M
- person registered representatives
- agency sec order
- agency Securities and Exchange Commission
- person william nolan
- company w.j. nolan & co., inc.
- SEC filed Motion for an Order to Show Cause
- W.J. Nolan & Co., Inc. failed to pay $192,028.29 in Disgorgement and Prejudgment Interest
- SEC is asking Court to Enter Order Finding Civil Contempt
- SEC entered Order Against W.J. Nolan
- Registered Representatives engaged in Pattern of Sales Practice Abuses
- W.J. Nolan failed to supervise Registered Representatives
- W.J. Nolan allowed Unregistered Individuals to Effect Transactions
- SEC Order required W.J. Nolan to Pay $192,028.29
- William Nolan consented to SEC Order
- William Nolan owned and made All Decisions for W.J. Nolan
- William Nolan caused W.J. Nolan to File Form BDW
- William Nolan sold Assets Belonging to W.J. Nolan for $750,000
- William Nolan deposited Funds into Personal Bank Accounts
- SEC seeks to hold William Nolan in Contempt
Litigation Release No. 17907 / December 20, 2002 Securities and Exchange Commission v. W.J. Nolan & Co., Inc., (U.S.D.C. D.C., Case Number 1: 02CV00044, filed January 8, 2002) On December 17, 2002, the Securities and Exchange Commission filed a Motion for an Order to Show Cause why a broker-dealer, W.J. Nolan & Co., Inc., and its president and majority shareholder, William J. Nolan, should not be held in contempt of court for failing to pay $192,028.29 in disgorgement and prejudgment interest ordered by the United States District Court for the District of Columbia on June 11, 2002. The Commission is asking the Court to enter an order finding W.J. Nolan and William Nolan in civil contempt and requiring W.J. Nolan and William Nolan to pay the previously-ordered disgorgement and prejudgment interest, plus post-judgment interest, immediately. In its Motion, the Commission alleged that on September 24, 2001, the Commission entered an order against W.J. Nolan finding that registered representatives at W.J. Nolan's offices in Chicago, Illinois and on Park Avenue in New York engaged in a pattern of sales practice abuses, including churning customer accounts and making unsuitable and unauthorized trades in microcap and penny stocks. As a result of this conduct, the Commission found that W.J. Nolan failed to reasonably supervise those registered representatives in violation of Section 15(b)(4) of the Securities Exchange Act of 1934, allowed unregistered individuals to effect transactions in securities in violation of Section 15(b)(7) of the Exchange Act and Rule 15b7-1 thereunder and willfully failed to comply with the Commission's requirements for penny stock transactions in violation of Section 15(g) of the Exchange Act and Rules 15g-2, 15g-3 and 15g-6 thereunder. Among other things, the Commission's order required W.J. Nolan to pay disgorgement and prejudgment interest totaling $192,028.29 within thirty days of the entry of the order. William Nolan, on behalf of W.J. Nolan, consented to the entry of the Commission's September 24, 2001 order. Yet, W.J. Nolan failed to pay the disgorgement and prejudgment interest as ordered. William Nolan owned and made all decisions on behalf of W.J. Nolan throughout the relevant time period before and after the judgment. In October and November 2001, William Nolan caused W.J. Nolan to file a Form BDW with the Commission seeking to withdraw its registration as a broker-dealer with the Commission, sold assets belonging to W.J. Nolan for $750,000 and deposited the funds into his personal bank accounts in order to avoid paying the Commission's judgment. As a result, the Commission seeks to hold William Nolan personally in contempt of court for W.J. Nolan's failure to pay and is asking the Court to require William Nolan to pay the judgment. For further information, see LR-17324 (January 16, 2002) and LR-17595 (July 1, 2002).
Litigation Release No. 17907 / December 20, 2002 Securities and Exchange Commission v. W.J. Nolan & Co., Inc., (U.S.D.C. D.C., Case Number 1: 02CV00044, filed January 8, 2002) On December 17, 2002, the Securities and Exchange Commission filed a Motion for an Order to Show Cause why a broker-dealer, W.J. Nolan & Co., Inc., and its president and majority shareholder, William J. Nolan, should not be held in contempt of court for failing to pay $192,028.29 in disgorgement and prejudgment interest ordered by the United States District Court for the District of Columbia on June 11, 2002. The Commission is asking the Court to enter an order finding W.J. Nolan and William Nolan in civil contempt and requiring W.J. Nolan and William Nolan to pay the previously-ordered disgorgement and prejudgment interest, plus post-judgment interest, immediately. In its Motion, the Commission alleged that on September 24, 2001, the Commission entered an order against W.J. Nolan finding that registered representatives at W.J. Nolan's offices in Chicago, Illinois and on Park Avenue in New York engaged in a pattern of sales practice abuses, including churning customer accounts and making unsuitable and unauthorized trades in microcap and penny stocks. As a result of this conduct, the Commission found that W.J. Nolan failed to reasonably supervise those registered representatives in violation of Section 15(b)(4) of the Securities Exchange Act of 1934, allowed unregistered individuals to effect transactions in securities in violation of Section 15(b)(7) of the Exchange Act and Rule 15b7-1 thereunder and willfully failed to comply with the Commission's requirements for penny stock transactions in violation of Section 15(g) of the Exchange Act and Rules 15g-2, 15g-3 and 15g-6 thereunder. Among other things, the Commission's order required W.J. Nolan to pay disgorgement and prejudgment interest totaling $192,028.29 within thirty days of the entry of the order. William Nolan, on behalf of W.J. Nolan, consented to the entry of the Commission's September 24, 2001 order. Yet, W.J. Nolan failed to pay the disgorgement and prejudgment interest as ordered. William Nolan owned and made all decisions on behalf of W.J. Nolan throughout the relevant time period before and after the judgment. In October and November 2001, William Nolan caused W.J. Nolan to file a Form BDW with the Commission seeking to withdraw its registration as a broker-dealer with the Commission, sold assets belonging to W.J. Nolan for $750,000 and deposited the funds into his personal bank accounts in order to avoid paying the Commission's judgment. As a result, the Commission seeks to hold William Nolan personally in contempt of court for W.J. Nolan's failure to pay and is asking the Court to require William Nolan to pay the judgment. For further information, see LR-17324 (January 16, 2002) and LR-17595 (July 1, 2002).