==========================================START OF PAGE 1====== INITIAL DECISION RELEASE NO. 86 ADMINISTRATIVE PROCEEDING FILE NO. 3-8230 UNITED STATES OF AMERICA Before the SECURITIES AND EXCHANGE COMMISSION _________________________ In the Matter of ) ) INITIAL DECISION BENJAMIN G. SPRECHER ) March 11, 1996 ) _________________________ APPEARANCES: Robert M. Fusfeld and Thomas D. Carter for the Division of Enforcement, Central Regional Office, Securities and Exchange Commission. Benjamin G. Sprecher, pro se. BEFORE: Brenda P. Murray, Chief Administrative Law Judge The Commission instituted this proceeding on November 19, 1993, pursuant to Sections 15(b) and 21B(e) of the Securities Exchange Act of 1934 (Exchange Act). The Order Instituting (Order) recited allegations concerning Benjamin G. Sprecher (Mr. Sprecher) made by the Commission's Division of Enforcement ==========================================START OF PAGE 2====== (Division). These allegations included, among other things, that on July 1, 1992, Mr. Sprecher had been sentenced to forty-six months imprisonment, two years supervised release, and fined $50,000 based on his conviction on ten counts which included crimes of conspiracy to sell unregistered securities, conspiracy to make false statements to the Commission, perjury, and obstruction of justice. U.S. v. Sprecher, 783 F.Supp. 133 (S.D.N.Y. 1992); conviction aff'd and case remanded for resentencing, 988 F.2d 318 (2d Cir. 1993). On March 29, 1994, Judge Cedarbaum denied the requested relief: Sprecher has not demonstrated that he was denied effective assistance of counsel, that the government engaged in misconduct during his trial, or that his sentence should be reduced. 1994 U.S. Dist. LEXIS 3740, aff'd, U. S. v. Sprecher, 50 F.3d 3 (2d Cir. 1995) cert. denied, 64 U.S.L.W. 3269 (October 10, 1995). BACKGROUND The Order directed a public hearing to determine: A. If the allegations were true and to allow Mr. Sprecher an opportunity to establish any defenses; B. What, if any, remedial action is appropriate in the public interest pursuant to Section 15(b) of the Exchange Act with respect to Mr. Sprecher as a person participating in an offering of penny stock; C. Whether respondent should be required to disgorge illegal profits and reasonable interest. ==========================================START OF PAGE 3====== In response to a Motion to Dismiss by Mr. Sprecher, the Commission dismissed Paragraph C from the Order on December 27, 1994. Benjamin G. Sprecher, 58 SEC Docket 1375 (1994). The Division moved for reconsideration. In his response, Mr. Sprecher requested that the Commission reconsider its refusal to dismiss the part of this proceeding seeking a penny stock bar. The Commission noted that Mr. Sprecher's request was untimely, and denied it for the reasons given in its original order. Benjamin G. Sprecher, 58 SEC Docket 2942 (1995). I held a hearing on December 18, 1995, in New York City. Mr. Sprecher was advised that the Division intended to presented evidence against him. Nonetheless, Mr. Sprecher voiced his opposition to the Commission's jurisdiction, and left about twenty minutes after the hearing began. Tr. 12, 16. The Division presented three witnesses and introduced eight exhibits.-[1]- The Division filed Proposed Findings of Fact, Conclusions of Law and Brief in Support on January 31, 1996. Mr. Sprecher filed a Motion to Dismiss and Reply to the Division on February 19, 1996. I received the last filing, the Division's Opposition to the Motion to Dismiss and its Response to Mr. Sprecher's Reply, on February 22, 1996. ---------FOOTNOTES---------- -[1]- Counsel's Exhibit Number 1 which describes the Division's exhibits is not included in this number. ==========================================START OF PAGE 4====== MOTION TO DISMISS-[2]- I deny the Motion to Dismiss which Mr. Sprecher submitted with his Reply to the Division's Proposed Findings and Brief. As noted, the Commission granted in part and denied in part Mr. Sprecher's motion to dismiss the proceeding on December 27, 1994, and it affirmed that ruling on March 17, 1995. The arguments that Mr. Sprecher has offered in his latest motion have been considered and rejected.-[3]- SUBPOENAS AND RULINGS In his brief, Mr. Sprecher contends that I refused to issue a subpoena to Monroe Arndt, whom he wanted to call as a character witness. This is not true. Mr. Sprecher did not mention this individual or his desire to present this type of testimony during the prehearing conference on October 26, 1995, when he named the individuals he intended to subpoena. Tr. 10-17. In his letter requesting ten subpoenas which I denied, Mr. Sprecher stated he intended to demonstrate through the ten subpoenaed individuals that the Division concocted charges against him and sustained them with illegal and unethical activities. I am unaware that Mr. Sprecher requested subpoenas for any person to present ---------FOOTNOTES---------- -[2]- This proceeding is under the Commission's old procedural rules. The motion is before me pursuant to Rule 11(e). 17 C.F.R.  201.11(e). -[3]- Mr. Sprecher has claimed that the Commission lacked jurisdiction in this proceeding because his activities did not occur in the United States. The factual findings in this decision show this claim to be false. See 58 SEC Docket at 1378 n.8. ==========================================START OF PAGE 5====== character testimony. Tr. 14-16. Finally, Mr. Sprecher had left the hearing when it came time for him to present his defense. On brief, Mr. Sprecher maintains that I acted contrary to law and due process by refusing his discovery request. This is not true. The only material I am aware of that Mr. Sprecher wanted and did not receive was the Division's file in the criminal case. I ruled that Mr. Sprecher could not introduce evidence attacking his criminal conviction. Prehearing conference October 26, 1995, Tr. 25-30; Elliott v. SEC, 36 F.3d 86, 87 (11th Cir. 1994) holding that a criminal conviction cannot be collaterally attacked in an administrative proceeding. Mr. Sprecher did not dispute the Division's claim that it had provided him with complete copies of its investigative file in this proceeding on two separate occasions. Prehearing conference October 26, 1995, Tr. 41. Mr. Sprecher was aware of the Division's proposed witnesses and exhibits prior to the hearing. Prehearing conference October 26, 1995, Tr. 18-19, 40. FINDINGS OF FACT My findings are based on the record and my observation of the witnesses demeanor. I applied preponderance of the evidence as the applicable standard of proof.-[4]- On January 16, 1992, after a thirteen-day bench trial, U.S. District Court Judge Cedarbaum found Mr. Sprecher, an attorney with a securities practice in New York City, who participated in ---------FOOTNOTES---------- -[4]- I have considered and rejected all the arguments and proposed findings that are inconsistent with this decision. ==========================================START OF PAGE 6====== transactions involving smaller issuer stocks, guilty of the following: Count 1 - Under 18 U.S.C.  371 of conspiring to defraud the United States and the IRS [Internal Revenue Service], and conspiring to violate 18 U.S.C.  1001 by making a false statement within the jurisdiction of the IRS; Count 2 - Aiding and abetting the making a false statement within the jurisdiction of the IRS in violation of 18 U.S.C.  2 and 1001; Count 3 - Under 18 U.S.C.  371 of conspiring to sell unregistered securities in the market in violation of 15 U.S.C.  77e and 77x, and of conspiring to violate 18 U.S.C.  1001 by making false statements in a matter within the jurisdiction of the SEC; Counts 4 through 7 - Violating 18 U.S.C.  2 and 1001 by making, or aiding and abetting in making, false statements in four different documents filed with the SEC; Counts 9 and 10 - Five specifications of perjury and obstruction of justice while testifying under oath at a deposition conducted by the SEC in May 1985; Count 11 - Knowingly and corruptly attempting to influence, obstruct, and impede the due administration of justice by a federal court in violation of 18 U.S.C  1503 in connection with a false representation Mr. Sprecher made in a document he filed with the U.S. District Court for Utah. Judge Cedarbaum found that: ==========================================START OF PAGE 7====== ... I find that Sprecher's testimony at the 1985 hearing ... in addition to being knowingly false, was clearly designed to confuse the SEC and obfuscate the true nature of his relationship with the one KKP that has been shown to exist, the New York Corporation that he controls. 783 F.Supp. at 151-52. In sum, what Sprecher terms "jousting" I find to be deliberate lying and purposeful obstruction. The clear intent of Sprecher's 1985 testimony was to create the false impression that he had little knowledge or control of the New York corporation known as KKP, and by false answers under oath to impede the SEC investigation. 783 F.Supp. at 153. It is difficult to imagine more compelling evidence of consciousness of guilt than the elaborate efforts of Sprecher to prevent the production of the Bank Leumi records. He deliberately engaged in fabrication and forgery in order to suppress the records that disclosed the existence and his control of the KKP and NAV-AIR bank accounts in Israel and the true disposition of the Towers tax fund. 783 F.Supp. at 155-56. It is clear beyond a reasonable doubt that Sprecher, expecting and intending that the false information would be relied upon by the IRS and would mislead the IRS, instructed Novak to take the KKP TIN [tax identification number] to the Towers closing and to represent it as the TIN for the tax fund. It has also been proven beyond a reasonable doubt that Sprecher had a stake in the success of the criminal enterprise. 738 F.Supp. at 158. The evidence is overwhelming that Sprecher participated in a conspiracy with Roth, Foti, and Hastings to sell unregistered World Wide stock illegally in the market and to make false statements in a matter within the jurisdiction of the SEC .... The defendant also created and backdated corporate documents for submission to the SEC so that it would appeared that ... the requirements of Rule 144(k) had been met. 738 F.Supp. at 159. ==========================================START OF PAGE 8====== Despite Sprecher's contention that he put the SEC on notice through remarks made on other occasions and therefore should not be held responsible for the false statements he is charged with making before the SEC in 1985, the requirements of truthfulness when giving sworn testimony does not turn on a witness' whim. Because Sprecher's purposeful falsehoods were material to the SEC investigation of which the hearing was part, and because they were responsive to the questions posed to him, I find the defendant guilty of perjury on all but the fifth specification charged in count nine. 738 F.Supp. 163. When Sprecher made the false statements which sought to minimize his role with respect to KKP, his clearly corrupt purpose was to conceal his control of what he wished to portray as a legitimate, tax-exempt religious corporation and thereby hamper the SEC's investigation. 738 F. Supp. 164. In his Utah litigation, Sprecher sued to quash SEC subpoenas that called for the production of the bank records of KKP and NAV-AIR. He intended that the court rely on the false representation in his affidavit and that the misrepresentation would persuade the court to thwart the SEC investigation. Id. In connection with his illegal activities, Mr. Sprecher bought and sold shell corporations -publicly-owned corporations with no substantial business operations or assets. To control NAV-AIR Industries Ltd. (NAV-AIR), during this time period, Mr. Sprecher employed a corporate shell, MTM Enterprises, one of several shells he purchased from Robert Lund, who has been enjoined from violations of the securities laws and criminally convicted of securities law offenses. 783 F. Supp at 138; Division's Initial Brief at 4 n.6. Mr. Sprecher is not, and was not, registered or associated with a registrant under the Exchange Act. This administrative ==========================================START OF PAGE 9====== proceeding was instituted pursuant to amended Section 15(b)(6) of the Exchange Act which authorizes an administrative proceeding against any person who, at the time of the alleged misconduct, was participating in a penny stock offering. For purposes of the Exchange Act, a penny stock is defined in Section 3(a)(51)(A). 17 C.F.R.  240.3a51-1. Mr. Sprecher's conviction involved illegal activities in the securities of three companies: NAV-AIR, Towers Financial Corp., and World Wide Medical Technology. 783 F.Supp. at 138-39, 142. NAV-AIR securities were penny stocks, and it appears highly likely that Towers Financial Corp. and World Wide Medical Technology also came within the statutory definition.-[5]- Mr. Sprecher participated in each of these penny stock offerings as legal counsel, controlling person or active participant in the affairs of the issuer, and as a conspirator in the illegal conspiracies. NAV-AIR's net assets were less that two million dollars. Tr. 42. It did not have average annual revenues of six million dollars or more, and it did not have audited financial statements. Tr. 42-43. In the period June 1986 through December 1988, NAV-AIR securities were not listed on any securities ---------FOOTNOTES---------- -[5]- In a less formal sense, penny stocks are issues of smaller companies that do not have an established record of performance, which trade for less than $5.00 per unit, where the unit price is volatile, and the expectations for profit are high. One text describes penny stocks as low priced securities that are not marketed through a national exchange or the NASD national market system. Thomas Lee Hazen, The Law of Securities Regulation 428 (1990). Mr. Sprecher participated in transactions involving stocks of smaller issuers which appear to fit these criteria. 783 F.Supp 133. ==========================================START OF PAGE 10====== exchange, but the stock was listed in the inter-dealer quotation service, pink sheets, published by the National Quotation Bureau. Tr. 21-22. During this time frame, NAV-AIR shares were publicly traded in the United States by 15 brokers. Trading occurred in about 377 transactions at prices between $0.1205 and $3.50. Tr. 20-22. NAV-AIR securities were never registered with the Commission. Tr. 22. PUBLIC INTEREST Section 15(b)(6)(A) of the Exchange Act provides that the Commission shall sanction Mr. Sprecher, if it is in the public interest to do, because at the time of the alleged misconduct he was a person participating in an offering of penny stock who: (1) was convicted, within 10 years of when this administrative proceeding was begun, of a crime involving a conspiracy involving the purchase or sale of a security, taking of a false oath, making of a false report, perjury, forgery, or fraudulent concealment, and (2) has willfully violated the Securities Act of 1933. Sections 15(b)(4)(B) and 15(b)(4)(D). The starting point for assessing what sanction is appropriate in the public interest is a review of the factors specified in Steadman v. SEC, 603 F.2d 1126, 1140 (5th Cir. 1979), aff'd on other grounds, 450 U.S. 91 (1981): [T]he egregiousness of the defendant's actions, the isolated or recurrent nature of the infraction, the degree of scienter involved, the sincerity of the defendant's assurances against future violations, the defendant's recognition of the wrongful nature of his conduct, and the likelihood that his occupation will present opportunities for future violations .... ==========================================START OF PAGE 11====== Another consideration is that sanctions are remedial and should demonstrate to the particular respondent, the industry, and the public generally that egregious conduct will merit a harsh response. Arthur Lipper Corp. v. SEC, 547 F.2d 171, 184 (2d Cir. 1976), cert. denied, 434 U.S. 1009 (1978). Mr. Sprecher's egregious criminal behavior - conspiring to sell unregistered securities involving fraud was international in scope, of several years duration, and considerable legal complexity - and the actions he took to prevent disclosure - perjury, false documents submitted to government agencies and obstruction of justice - demonstrate beyond a reasonable doubt that he cannot be trusted to abide by applicable laws and regulations. Mr. Sprecher is scholarly and experienced. He represents that he is an ordained rabbi and holds a Doctor's degree in economics. Tr. 55-56. As an attorney, Mr. Sprecher knew that his willful criminal actions were blatantly illegal. In one taped conversation that evidenced the conspiracy to sell unregistered securities, Mr. Sprecher dominated the conversation and alluded to his superior expertise in such matters. 783 F. Supp. at 143. Mr. Sprecher has given no assurance against future criminal conduct, rather he has denied any wrongdoing despite his conviction. Based on Mr. Sprecher's criminal activities, the United States Court for the District of Columbia permanently enjoined him from violating any federal statute regulating ==========================================START OF PAGE 12====== securities and from serving as an officer or director of any corporation whose securities are publicly traded, and has ordered him to disgorge illegal profits in the amount of $55,869.75, and prejudgment interest. SEC v. Sprecher, No. 92-2860, 1993 U.S. Dist. LEXIS 18116 (December 15, 1993). In its opinion granting summary judgment, the court stated: In this case, defendant was convicted of knowingly and repeatedly violating the securities laws. He remains capable of violating the securities laws, and his convictions for making false statements and perjury cast serious doubt on his trustworthiness in the future.-[6]- The testimony of Mr. Melvin Shestack and Mr. Arthur Seidenfeld is persuasive that Mr. Sprecher can be expected to continue to violate the laws and regulations if allowed to participate in the securities industry. In 1988, Mr. Shestack became entangled in the affairs of an individual, Howard Ray, whom he later learned "was running a boiler room -[7]- in ---------FOOTNOTES---------- -[6]- The court cited Local 167, Int'l Brotherhood of Teamsters v. United States, 291 U.S. 293, 298-99 (1934) for the proposition that generally a criminal conviction collaterally estops relitigation in a subsequent civil action of the factual issues essential to the disposition of the criminal case, and Pan American Petroleum & Transport Co. v. United States, 273 U.S. 456, 506-07 (1927), and United States v. Second National Bank, 502 F.2d 535, 548 (5th Cir. 1974), cert. denied, 421 U.S. 912 (1975) for holding that Mr. Sprecher's charges of prosecutorial misconduct against the Division do not lie in a civil enforcement action brought by a federal agency, as distinguished from a private plaintiff. -[7]- A boiler room is usually a "temporary operation established to sell a specific speculative security. Solicitation is by telephone to new customers, the salesmen conveying favorable earnings projections, predictions of price rises and other optimistic prospects without a factual basis." Hanly v. SEC, 415 F.2d 589, 597 n.14 (2d Cir. 1969). ==========================================START OF PAGE 13====== [the] south of France ... selling phony stock to Arabs." Tr. 31- 33. Mr. Shestack agreed to write a brochure for Columbia Electronics, a small manufacturing company located in Sydney, New York. Tr. 26. He believed that Mr. Ray was going to raise money for the company.-[8]- Tr. 34-35. Mr. Shestack received $500 for the use of his name as a director, but he did not attend meetings or participate in the affairs of the firm. Tr. 28-30. Mr. Shestack dealt with Mr. Sprecher who was Mr. Ray's attorney. Tr. 27-30. The Wall Street Journal later informed Mr. Shestack that he was listed as the firm's treasurer on stock certificates found in Saudi Arabia. Tr. 31. The United States District Court for the Southern District of New York issued a Default Judgment and Permanent Injunction against Mr. Ray on May 2, 1995, enjoining him against violations of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Exchange Act, and Rule 10b-5 thereunder. Div. Ex. 11, SEC v. Howard Ray and Allan J. Simon, 94 CV 3016 RPP.-[9]- After Mr. Shestack was listed as a Division witness in this proceeding, ---------FOOTNOTES---------- -[8]- The company's original owner was trying hard to make a small operation that employed handicapped people a success. Tr. 34. Mr. Shestack found out that Mr. Ray and Mr. Sprecher intended to "bump the company up" meaning they would arrange for the price of the stock to increase from $.025 or $.06 and then sell off the shares that they held at a profit. Tr. 29, 35-36. -[9]- The Commission's complaint accused Mr. Ray of engaging in schemes to manipulate the price of shares in order to defraud the investing public. More specifically, he arranged for the merger of companies into public shells, manipulated and directed trades to artificially increase share prices and disseminated false information about NAV-AIR, Golden Glory USA, Inc., Columbia Electronic Systems, Inc. and Creative Telecom, Inc. Div. Ex. 11, Complaint for Injunction and Equitable Relief at 1-2. ==========================================START OF PAGE 14====== Mr. Sprecher threatened to sue Mr. Shestack for defamation and warned him to "watch out from now on." Tr. 33-34. Mr. Shestack responded to my inquiry: Q One of the issues that I have to decide is based on the violations of the securities statutes whether ... the Securities and Exchange Commission should bar Mr. Sprecher from dealing in penny stocks. That's whether the public interest - A The public interest would not be helped if he was left to do anything that had to do with stocks or bonds. Out of all the people I have met and I have met with criminals in jail. I've been a reporter for a lot of years and I met with people and I have gone fishing with George Wallace and I interviewed George Lincoln Rockwell, the founder of the American Nazi party and all those kind of people. They're angels in comparison. I wouldn't trust Doc Sprecher to -- it's all the things. It's not the things he did to me, that's bad enough, but I -- even Howard [Ray] didn't trust him. Tr. 38. Mr. Sprecher represented Mr. Seidenfeld, president of several companies with securities registered with the Commission, as legal counsel for six or seven years. In 1985-86, Mr. Seidenfeld was an officer of Modern Technology Corp. (Modern) which was considering acquiring NAV-AIR, a small machining operation on Long Island. Tr. 42-43. Mr. Sprecher convinced Mr. Seidenfeld to have Modern enter a consulting agreement with MTM Investment Corp. (MTM), a company he controlled. The agreement provided that MTM would acquire NAV-AIR, and would raise one million dollars from sales of NAV-AIR in Europe. Mr. Seidenfeld was paid a consulting fee of $35,000. Tr. 44; Div. Ex. 1. Mr. Seidenfeld prepared promotional material about NAV-AIR which Mr. Sprecher and Mr. Ray circulated to the public after modifying it ==========================================START OF PAGE 15====== so that it was false and misleading. Tr. 48-49. When Mr. Seidenfeld complained to Mr. Sprecher that the information was false and misleading, Mr. Sprecher told him to mind his own business.-[10]- Id. MTM acquired NAV-AIR and the surviving corporation went by the latter name. Tr. 46. Mr. Ray and Mr. Sprecher were equal partners in this venture. Tr. 45. Mr. Sprecher used the term "box job" to describe his activities for NAV-AIR and other stock related matters. Tr. 46, 51-52. A "box job" is: a device whereby a small group of individuals controls virtually all of the stock of a corporation and artificially manipulates purchases and sales of the stock in order to manipulate the price of, or market for, the stock. Control of the corporation and its stock is concealed by the use of "nominee" or "straw" officers, directors and shareholders, who hold their stock in their own (or fictitious) names, but are controlled by the individuals manipulating the stock. Originally, the term referred to the controlling persons actually having the stock certificates "in a box." U.S. v. Sneed, 34 F.3d 1570, 1574 n.1 (10th Cir. 1994). Mr. Seidenfeld has found Mr. Sprecher to be dishonest. Tr. 52. Yes, Dr. Sprecher is one of the most brilliant [men] that I've ever come across in my life but his brilliance is for [his] own evil and his own greed. ... He had a bad habit of boasting and of trying to tell everyone of all his qualities and all his talents and abilities and mentioned on many, many occasions ... how he was able to acquire all these shell companies in Europe, in Salt Lake City and was able to acquire the ---------FOOTNOTES---------- -[10]- Mr. Sprecher thought it amusing "for us as Jews to fleece" Arab investors in NAV-AIR. Tr. 49-50. He bragged about taking a suitcase of money and securities to Europe and Israel. Id. ==========================================START OF PAGE 16====== shares and when he sold these shells to promoters in order to merge in companies, would make it his business not to disclose to them that he had shares. As soon as they would put a deal together and a project would be done, he would start selling his shares privately and seemed to get a big charge out of doing things without disclosing -- without telling people, working both sides. One of my problems with him was that he manipulated people on both sides and I think that -- in my opinion I don't think the man has any ethics. I think it's a great danger for the public to let him be involved in anything in the securities business. I think for him it's the idea of selling dreams and it's printing money and I don't think it's a very good idea. I think he ruins it for everybody -- all promoters like myself who try to do something and when you have underwriters that are crooked and principals that are crooked, it destroys the market for all of us. The whole idea of C capital is [to] try to take an idea in venture capital and bring it forward and I've done many of them. I have had those that failed, I have had those that have succeeded but with people like that, especially attorneys like that, they destroy the system for everybody .... This man [Mr. Sprecher] twisted and manipulated and did anything for money without any regard to the ethics of the situation ... in my opinion and experience, he had literally no ethics. I never met anybody like that before in my life. Tr. 52-54. It is essential that the highest ethical standards prevail in every facet of the securities industry. SEC v. Capital Gains Research Bureau, Inc., 375 U.S. 180, 186-87 (1963). The securities industry is one in which opportunities for dishonesty recur constantly. Richard C. Spangler, 46 S.E.C. 238, 252-53 (1976). There is no mitigating evidence in this record. ==========================================START OF PAGE 17====== For all these reasons, I find that Mr. Sprecher should be barred from participating in any offering of penny stock.-[11]- ORDER Based on the findings and conclusions set forth above, I ORDER that pursuant to Section 15(b) of the Securities Exchange Act of 1934, Benjamin G. Sprecher is barred from participating in any offering of penny stock. This order shall become effective in accordance with and subject to the provisions of Rule 17(f) of the Commission's Rules of Practice. 17 C.F.R  201.17(f). Pursuant to that rule, this initial decision shall become the final decision of the Commission as to each party who has not filed a petition for review pursuant Rule 17(b) within 15 days after service of the initial decision upon him or her, unless the Commission, pursuant to Rule 17(c), determines on its own initiative to review this initial decision as to a party. If a party timely files a petition for review, or the Commission acts to review as to a party, the initial decision shall not become final as to that party. ---------FOOTNOTES---------- -[11]- Finally, the Division requests that I find Mr. Sprecher in default for failing to appear and participate in these proceedings. Initial Brief at 6. On October 17, 1995, the Commission found Mr. Sprecher in default for failing to appear at the hearing held on November 1, 1994, however, it set the default aside provided Mr. Sprecher appeared at all future hearings. I deny the Division's request because Mr. Sprecher appeared at the hearing as required by the order and Rule 6(e) of the Commission's Rules of Practice. 17 C.F.R.  201.6(e). ==========================================START OF PAGE 18====== Brenda P. Murray Chief Administrative Law Judge Washington, D.C. March 11, 1996