Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-10-01068/USCOURTS-caDC-10-01068-0/pdf.json

Parties Involved:
Janet Gurley Katz
Petitioner
Securities and Exchange Commission
Respondent

Document Text:

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued January 14, 2011 Decided August 5, 2011

No. 10-1068

JANET GURLEY KATZ,

PETITIONER

v.

SECURITIES AND EXCHANGE COMMISSION,

RESPONDENT

On Petition for Review of an Order 

of the Securities & Exchange Commission

Richard C. Fooshee argued the cause and filed the briefs for

petitioner.

Benjamin L. Schiffrin, Senior Counsel, Securities and

Exchange Commission, argued the cause for respondent. With

him on the brief were David M. Becker, General Counsel,

Michael A. Conley, Deputy Solicitor, and John Avery, Senior

Litigation Counsel.

Before: GINSBURG and GARLAND, Circuit Judges, and

EDWARDS, Senior Circuit Judge.

USCA Case #10-1068 Document #1322685 Filed: 08/05/2011 Page 1 of 17
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Opinion for the Court filed by Circuit Judge GARLAND.

GARLAND, Circuit Judge: Janet Gurley Katz petitions for

review of an order of the Securities and Exchange Commission

(SEC) sustaining a disciplinary action against her by the New

York Stock Exchange (NYSE). Because we conclude that the

Commission’s decision was reasonable and supported by

substantial evidence, we deny the petition for review and affirm

the SEC order.

I

Katz was a registered representative associated with

Wachovia Securities, Inc., a member of the NYSE, at

Wachovia’s Morristown, New Jersey office. This case concerns

her handling of accounts belonging to seven Wachovia

customers: Paul Pinajian, Harry and Irene Ashbahian, Agnes

Voskian, May Kapakjian, Sandra Griffin, and Mary Ann Smith. 

With the exception of Mary Ann Smith, Katz’s relationship with

each of these customers commenced through a referral. The

Ashbahians met Katz through their son, Gregory Ashbahian,

who also introduced Katz to his mother-in-law, Agnes Voskian,

her daughter, Sandra Griffin, and her sister, May Kapakjian. 

Gregory Ashbahian was referred to Katz by Charles Pinajian,

who also referred his son, Paul, to her. 

The first allegations of Katz’s misconduct surfaced in late

2002, when the Ashbahians met with Wachovia branch manager

Larry Ennis to complain about Katz’s handling of their accounts. 

The Ashbahians alleged that money had been removed from

their accounts without their authorization, and that signatures on

certain documents appeared to be forged. Ennis referred the

matter to Wachovia’s compliance department and subsequently

placed Katz on administrative leave. Katz resigned from

Wachovia in December 2002. 

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In August 2006, the NYSE initiated disciplinary

proceedings against Katz.1

 After a sixteen day hearing in which

Katz, Ennis, other Wachovia employees, and most of the

customers testified, the NYSE found that Katz engaged in

conduct that was “inconsistent with just and equitable principles

of trade by (i) causing customer funds to be transferred to other

customers’ accounts without authorization [misappropriation],

(ii) making misstatements to a customer, (iii) effecting

unsuitable transactions in customers’ accounts, and (iv)

engaging in unauthorized trading in customers’ accounts.” 

Janet Gurley Katz, Exchange Act Release No. 61449, 2010 WL

358737, at 2, 20 (Feb. 1, 2010) [hereinafter SEC Op.]

(summarizing NYSE findings).2

 It further found “that she

violated NYSE Rule 405 by causing Wachovia to fail to learn

essential facts about certain customers,” and that she “caused or

permitted violations of NYSE Rule 440 and Section 17(a) of the

Securities Exchange Act of 1934 and [SEC] Rules 17a-3 and

17a-4 . . . by entering (or causing to be entered) inaccurate

information on customers’ new account forms.” Id. at 2-3

1

The enforcement arm of the NYSE was subsequently

consolidated with the National Association of Securities Dealers

(NASD) to form the Financial Industry Regulatory Authority, Inc.

(FINRA). Because this proceeding was initiated by the NYSE’s

enforcement arm, we follow the SEC’s convention below and use the

designation “NYSE” in this opinion. See Janet Gurley Katz,

Exchange Act Release No. 61449, 2010 WL 358737, at 2 n.1 (Feb. 1,

2010).

2

NYSE Rule 476(a)(6) provides that members and their

employees may be disciplined for conduct that is “inconsistent with

just and equitable principles of trade.” A violation of another NYSE

or Commission rule or regulation also automatically constitutes a

violation of Rule 476(a)(6). SEC Op. at 2 n.2.

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(citing 15 U.S.C. § 78q(a); 17 C.F.R. §§ 240.17a-3, -4).3

 The

NYSE censured Katz and imposed a permanent bar from

membership, allied membership, and approved person status,

and from employment or association in any capacity with any

member or member organization. See In re Janet Gurley Katz,

at 26 (N.Y.S.E. June 12, 2008) [hereinafter NYSE Op.]. 

Katz appealed the NYSE’s decision to the SEC, see 15

U.S.C. § 78s(d), which sustained the majority of the Exchange’s

determinations, finding that Katz had engaged in securities

violations with respect to the accounts of all seven customers.4

The Commission also sustained the censure and bar imposed by

the NYSE. See SEC Op. at 20-37.

With respect to Paul Pinajian, the Commission sustained the

NYSE’s finding that Katz made oral misstatements regarding

the balance in his account. At the NYSE hearing, Pinajian

testified that his account statements reflected a marked decrease

in his balance through 2000, and that, in August of that year, he

3

NYSE Rule 405 requires every member organization to use due

diligence to learn the essential facts about every customer. See SEC

Op. at 3 n.3. NYSE Rule 440 requires brokers and dealers to make

and preserve books and records prescribed by the NYSE and by SEC

Rules 17a-3 and 17a-4. See id. at 3 n.4. And SEC Rules 17a-3 and

17a-4 require brokers and dealers to keep current books and records

regarding executed securities transactions and customer accounts. 17

C.F.R. §§ 240.17a-3, -4. 

4

The NYSE found Katz guilty of twenty-seven violations, of

which the SEC sustained sixteen. Katz petitions this court for review

of fourteen of those, Pet. Br. 9-10, which are the only violations

discussed in this opinion. 

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became aware that Katz was trading his account on margin.5

According to Pinajian, despite Katz’s assurance that she would

take his account off margin, in early 2001 his account was still

being traded on margin, and his February 2001 statement

showed an unexpected decline of almost $100,000. Pinajian

testified that he called Katz, who told him that a computer error

had caused a margin debit to be deducted twice. His actual

balance, she said, was approximately $75,000 higher than his

statement indicated. Pinajian testified that, in March, he

received another statement showing a steep decline. When he

called Katz again, she told him that the computer error had not

been corrected, and that he would receive a temporary statement

showing the actual balance in his account. For the next several

months, Pinajian did receive statements showing higher account

balances. But when Pinajian moved his account to another

brokerage following Katz’s departure from Wachovia, he

discovered that the account contained only $36,946.46. 

It turned out that the monthly statements showing higher

account balances were false. More precisely, they appeared to

be altered versions of real statements belonging to a different

Katz customer: a label with Pinajian’s name and address had

been applied to cover the original address. Both Wachovia’s

operations manager and Katz’s assistant testified that Katz had

asked the branch receptionist to type up address labels for

Pinajian’s account. 

Katz denied making false statements to Pinajian: in

particular, she denied telling him that a margin debit had been

deducted twice or that his account statements were incorrect. 

Although she conceded that the monthly statements sent to

Pinajian were false, and that they were altered copies of

5

When investors buy on margin, they borrow cash from the

broker, using their other securities as collateral.

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statements belonging to another customer, she claimed not to

know how they ended up at Pinajian’s residence. Katz also

disclaimed any knowledge of how Pinajian’s genuine statements

were diverted to another address, or of how one such statement

arrived at the home of a woman who occasionally cleaned her

house. In light of the witness testimony and documentary

evidence, the SEC concluded that Katz made oral misstatements

when she told Pinajian that the decline in his account was due to

a computer error. 

The SEC also affirmed the NYSE’s finding that Katz

misappropriated funds from Pinajian’s account by transferring

them to the account of another customer without authorization. 

There is no dispute that $8,300 was transferred from Pinajian’s

account to the account of his uncle, another Katz customer. 

Pinajian testified that he did not authorize the transfer, never

discussed the transfer with Katz, and had no reason to send

money to his uncle. 

With respect to Harry and Irene Ashbahian, the

Commission sustained the NYSE’s finding that Katz

misappropriated funds from their account by making

unauthorized transfers. From March 2001 through October

2002, roughly $30,000 was moved from the Ashbahians’

accounts to the accounts of their son and daughter-in-law. 

Although Katz claimed that she made some of the transfers

pursuant to letters of authorization, the Ashbahians denied

signing any such documents. Katz also disclaimed knowledge

of several of the transfers, noting that she was out of the office

for certain periods during 2001 and 2002 dealing with the

illnesses and deaths of her step-son and husband, including a

time in October 2002 when she traveled to Scotland with her

husband, who died during the trip. The SEC rejected Katz’s

claim that she could not have made the transfers, finding that she

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exercised control over her customers’ accounts even when she

was out of the office. 

The SEC also affirmed the finding that Katz engaged in

unauthorized trading in the Ashbahians’ accounts. The couple

testified before the NYSE hearing panel that they were often

unaware when Katz made transactions and were “confused or

alarmed to discover that Katz had been trading in their

accounts.” SEC Op. at 30. The Commission agreed with the

NYSE that Katz did not have authorization for all of the

purchases and sales she made in the Ashbahians’ accounts; it

made the same determination with respect to the accounts of

Agnes Voskian, Sandra Griffin, and Mary Ann Smith.

As for Voskian, the SEC confirmed that -- in addition to

making unauthorized trades -- Katz misappropriated funds from

her account, engaged in unsuitable trading, and caused booksand-records violations. Regarding the books-and-records

violations, the SEC sustained the NYSE’s finding that Katz

caused Wachovia to fail to learn essential facts about Voskian

by entering, or causing to be entered, inaccurate information on

Voskian’s new account forms. That information included her

investment objective, income, net worth, and financial

experience. 

The SEC also affirmed the NYSE’s conclusion that Katz

misappropriated funds from Voskian by transferring $13,000 to

her son-in-law, Gregory Ashbahian. Like Harry and Irene

Ashbahian, Voskian denied signing documents purporting to

authorize the transfers. Finally, the Commission agreed with the

NYSE that Katz engaged in unsuitable trades on Voskian’s

account; it made the same finding with respect to Voskian’s

sister, May Kapakjian. Because Voskian and Kapakjian were

both in their eighties, lived on modest retirement incomes, and

had invested much of their net worth with Katz, the Commission

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found that Katz should not have been trading below-investmentgrade securities in the sisters’ accounts. 

On this petition for review, Katz contests each of the

findings described above.6

II

A person aggrieved by a final order of the SEC may obtain

review by this court, 15 U.S.C. § 78y(a)(1), but our standard of

review is deferential. “The findings of the Commission as to the

facts, if supported by substantial evidence, are conclusive.” 

Id. § 78y(a)(4). And the Commission’s “other conclusions may

be set aside only if ‘arbitrary, capricious, an abuse of discretion,

or otherwise not in accordance with law.’” Graham v. SEC, 222

F.3d 994, 999-1000 (D.C. Cir. 2000) (quoting 5 U.S.C.

§ 706(2)(A)).

A

Katz first contends that we should reverse the finding that

she made misstatements to Pinajian because she did not have

fair notice of the conduct she would have to defend. Although

she concedes that the NYSE’s “Charge Memorandum put [her]

on notice that she [would have] to defend against the charge of

making two oral misrepresentations to Pinajian in the spring of

2001,” she argues that the Memorandum did not notify her that

she would have to defend against a charge of “creating false

monthly statements [or] diverting real monthly statements.” Pet.

Br. 39. Accordingly, she argues, it was unfair for the NYSE to

6

Katz does not dispute that the sanctions the NYSE imposed and

that the SEC upheld were appropriate in light of the violations found. 

See Oral Arg. Recording 4:45. 

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make, and the SEC to sustain, a finding that she was guilty of

the charge of creating false account statements.

But that is not what the NYSE found or the SEC affirmed. 

As the Commission explained, the “NYSE did not make

additional, uncharged findings of violations” regarding the false

account statements, but rather “made findings of fact about the

monthly account statements, which the NYSE used to support

its ultimate legal conclusion that Katz made oral misstatements”

to Pinajian “by telling [him] that his account balances were

incorrect.” SEC Op. at 24-25. In short, the NYSE used the

account statements -- which Katz concedes were false -- as

evidence to support the charge that Katz’s oral statements to

Pinajian about his account balances were also false.7

Moreover, Katz was fully on notice that the SEC would use

the account statements for that evidentiary purpose. The Charge

Memorandum referenced the false monthly statements that

Pinajian received, see NYSE Charge Memorandum at 6-7 (J.A.

342-43), and Katz filed a pretrial motion to strike those

references, see Mot. to Strike at 8 (J.A. 367). The NYSE

hearing officer denied Katz’s motion, holding that the “duplicate

statements may have created a situation in which the customer

was more likely to believe misrepresentations about whether

errors had occurred in his account balances.” Order on Resp’t’s

Mot. at 3 (J.A. 379). Indeed, Katz concedes that “[t]his ruling

7

On appeal, Katz does not contend that the finding that she

created false account statements was unsupported by substantial

evidence. See Pet. Br. 38-41. As both the NYSE and SEC pointed

out, “Katz offered no contrary evidence or plausible explanation for

how one of her customers, who happened to be losing large amounts

of money through her management of his account, happened to receive

statements of another of her customers with a greater amount . . . .” 

SEC Op. at 25.

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made it clear that the false monthly statements would or could

be entered into evidence at the hearing.” Reply Br. 6. 

Accordingly, there is nothing to her claim that she lacked notice

of the conduct she would have to defend. See Flying Food Grp.

Inc. v. NLRB, 471 F.3d 178, 183 (D.C. Cir. 2006) (holding that,

in administrative proceedings, notice “is sufficient if the

[petitioner] understood the issue and was afforded full

opportunity to justify its conduct during the course of the

litigation” (internal quotation marks omitted)).

B 

Katz also challenges the determination that she

misappropriated funds from the Pinajian, Ashbahian, and

Voskian accounts by transferring them to other accounts without

authorization.

First, she contends that, because she was out of the office

for extended periods during 2001 and 2002 dealing with the

illnesses and deaths of her step-son and husband, she could not

have exerted the control necessary to effectuate the transfers. 

But the SEC reasonably rejected this argument based on the

testimony of Katz’s assistant that Katz had “‘total control over

the accounts’; . . . that, even when out of the office, Katz would

call in ‘[a]t least once a day’”; and that “‘nothing was happening

without [Katz’s] knowledge’ with respect to her customers’

accounts.” SEC Op. at 22 (quoting Hr’g Tr. 1046-51, 1297,

1300-01 (Testimony of Doreen Steup)). Katz maintains that the

SEC’s affirmation that she had “total control over the accounts”

was unsupported by substantial evidence. Although she

acknowledges that her assistant testified that she did have such

control, she insists that a review of the assistant’s testimony

indicates that what she meant “was that Katz exercised control

over communications with her clients.” Pet. Br. 42 (emphasis

by petitioner). A review of that testimony, however, makes

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clear that the assistant’s meaning was not limited to client

communications. See, e.g., Hr’g Tr. 1301 (Steup’s testimony

that “nothing was happening [in Katz’s customer accounts]

without her knowledge”); see also Hr’g Tr. 1046.

Second, Katz argues that the SEC decision was

unreasonable because it did not explain exactly what she did to

effectuate the misappropriations. The SEC did not determine,

she complains, whether Katz herself moved the funds, directed

someone else to do so, or forged documents purporting to

authorize the transactions. But the only issue for the SEC was

whether Katz was guilty of misappropriation -- not whether she

forged authorization documents or violated other NYSE rules

relating to the transfer of funds. Accordingly, the SEC did not

have to determine how Katz moved the money, only that she did

so. And as the Commission rightly recognized, “testimony may

be circumstantial in the sense that a witness did not actually see

the respondent engaged in the violative conduct,” but “can still

be persuasive evidence that the respondent engaged in the

alleged conduct.” SEC Op. at 24 (internal quotation marks

omitted); see Lucas v. Duncan, 574 F.3d 772, 777 (D.C. Cir.

2009) (noting that “[w]e generally draw no distinction between

the probative value of direct and circumstantial evidence”

(quoting Doe v. U.S. Postal Serv., 317 F.3d 339, 343 (D.C. Cir.

2003)). In this case, circumstantial evidence of

misappropriation was provided by the fact that transfers were

made, by Katz’s admission that she effected certain transfers, by

the customers’ testimony that they did not authorize the

challenged transfers, and by the testimony of Katz’s assistant

that Katz had total control over the accounts. Although not

overwhelming, this evidence was sufficient to support the

inference that both the NYSE and SEC drew.

Third, Katz argues that the SEC decision was unreasonable

because the Commission did not explain why it failed to give

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weight to several signed letters purportedly providing authority

for transfers from the accounts of the Ashbahians and Voskian,

as well as other letters from the three customers purportedly

indicating that they approved all of the activity in their accounts. 

But the SEC did explain. As the Commission noted, the NYSE

had credited the testimony of Katz’s customers, all of whom

denied creating and signing the documents upon which Katz

relies. The Commission declined to overturn the NYSE’s

credibility finding, SEC Op. at 21-22, and “this court is least

inclined to second guess such [credibility] findings where, as

here, the Commission affirmed the [body that] heard the

testimony in question,” Zacharias v. SEC, 569 F.3d 458, 470

(D.C. Cir. 2009). 

Finally, Katz maintains that the findings of

misappropriation departed from SEC precedent without

explanation. According to Katz, the SEC had never before

upheld a finding of misappropriation where there was no finding

of benefit to the broker and no relationship between the broker

and either account. But here, the SEC found both: Katz, the

Commission explained, “had a relationship with all of the

account holders to and from whom funds were transferred: she

was their registered representative. She also derived a personal

benefit by keeping the clients who received the transfers happy

and retaining their business.” SEC Op. at 23. Katz insists that

“these are not the kinds of benefits or relationships that have

sufficed to sustain findings in the past.” Pet. Br. 51. She does

not, however, cite any prior case that limited the kinds of

benefits or relationships that are sufficient to prove

misappropriation. Moreover, as the SEC noted, it had

previously held, in Cathy Jean Krause Kirkpatrick, “that a

registered representative had misappropriated $34,000 of a

customers account ‘for her own purposes’ where $31,944 of

those funds were used ‘to cover losses in the brokerage account

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of another customer.’” SEC Op. at 23 & n.25 (quoting 53

S.E.C. 918, 921, 925 (1998)).

C

Katz next challenges the finding that she caused

Wachovia’s books and records to be inaccurate, and thereby

caused the firm to fail to learn essential facts about Voskian. 

NYSE Rule 405 requires all member organizations to “[u]se due

diligence to learn the essential facts relative to every customer,”

and a person associated with a member firm can violate that rule

by failing to learn specific facts about a customer or failing to

fill out a new account form accurately. See SEC Op. at 32

(citing Dan Adlai Druz, 52 S.E.C. 416, 422 (1995); Ivan M.

Kobey, 51 S.E.C. 204, 211 (1992)). NYSE Rule 440 and

Exchange Act Rules 17a-3 and 17a-4 require brokers and dealers

to make and preserve books and records, which includes the

requirement that those records be accurate. See NYSE Rule

440; 17 C.F.R. §§ 240.17a-3, -4; see also 15 U.S.C. § 78q(a). 

Katz violated those rules, the Commission said, by entering or

causing to be entered inaccurate information on Voskian’s new

account forms. 

Katz notes that, although the NYSE found she had entered

false information on new account forms for all seven customers,

the SEC reversed as to all customers other than Voskian. She

particularly notes that, although May Kapakjian -- like Voskian

-- had “Growth & Income (return emphasis)” listed as the

investment objective on her new account form, the SEC reversed

the finding of a violation with respect to Kapakjian. “The

Voskian findings of violation,” she insists, “should be dismissed

for the same reason that the Kapakjian charges were.” Pet. Br.

58.

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This argument simply does not come to grips with the full

force of the evidence regarding the Voskian forms. First,

although Voskian’s form listed “Growth & Income (return

emphasis)” as her investment objective, Voskian testified that

she told Katz she was not seeking growth and was instead

primarily concerned with preserving capital. SEC Op. at 33. 

She also wrote a note on her confirmation letter stating that

“security of principal is the most important part of my

investment plan and I do not want that at risk for any higher

yield.” Id. (quoting Voskian letter). By contrast, the testimony

regarding Kapakjian’s form was more vague, and the SEC found

it “insufficiently detailed to find that Kapakjian’s new account

form[] w[as] incorrect.” Id. at 35. 

Moreover, the customer’s investment objective was not the

only inaccuracy the SEC found on Voskian’s form. The form

also stated that Voskian had twenty years of investing

experience, an annual income of between $100,000 and

$499,999, and a net worth between $500,000 and $999,999. 

Voskian, however, testified that all of this information was

incorrect: her annual income consisted of only social security

and $300 per month in pension payments; her net worth at the

time she became Katz’s customer was only $175,000; and she

had only been managing her own finances for the three years

since her husband’s death. See id. at 33. The NYSE lacked

similar evidence regarding any other Katz client. It was

therefore not arbitrary for the Commission to dismiss the booksand-records charges regarding those clients’ forms while

affirming the finding of a violation with respect to the Voskian

form.

D

Katz also disputes the finding that she made unsuitable

investment recommendations by failing “to tailor her

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recommendations to Voskian’s and Kapakjian’s profiles.” SEC

Op. at 26. But the finding was well supported. Based on

substantial evidence, the Commission found that Voskian and

Kapakjian “were not savvy market people,” that they “lived on

modest retirement incomes,” and that their Wachovia “accounts

appeared to represent a significant portion of their net worth.” 

Id. Nonetheless, “Katz recommended that Voskian and

Kapakjian invest in individual securities, some of which were

below-investment-grade,” which “involved a much higher risk

of loss than more conservative, diversified investment choices,

such as high-yield or high-income mutual funds.” Id. 

Moreover, “Katz’s strategy for Voskian’s and Kapakjian’s

accounts generated the highest transaction costs of any of the

accounts at issue” due to “short holding periods,” and those

extra expenses “increased the amount by which their

investments had to appreciate before they would realize a net

gain.” Id. at 26-27. In light of these facts, the Commission’s

conclusion -- that Katz’s recommendations “represented risky

and costly investment choices given Voskian’s and Kapakjian’s

investment profiles,” id. at 27 -- was reasonable and supported

by substantial evidence.

Katz protests that her testimony, and that of branch manager

Larry Ennis, established that Voskian and Kapakjian said they

were willing to “tolerate a slight risk of fluctuation in market

value in return for a higher level of income.” Pet. Br. 61-62. 

But the SEC did not regard the risk to which Katz exposed them

as “slight.” And in any event, the Commission correctly noted

that, under NYSE rules, a “client’s awareness of -- or even

desire for -- risk does not relieve a registered representative of

the obligation to tailor recommendations to each customer’s

financial profile.” SEC Op. at 28.

Katz argues that “in the past, the SEC has refused to opine

on the speculative nature of securities . . . in the absence of

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specific information about a security,” and suggests that the

record in this case “does not include evidence of the

characteristics of the individual stocks traded in the accounts.” 

Pet. Br. 63 (internal quotation marks omitted). But it does. The

NYSE’s expert testified that Katz purchased below-investmentgrade securities for both Voskian and Kapakjian and that those

securities exposed them to more risk than was suitable. See

Hr’g Tr. at 1702, 1720 (Testimony of NYSE Expert Mary

Calhoun). 

E

Finally, Katz challenges the findings that she engaged in

unauthorized trading in the accounts of Voskian, Griffin, Smith,

and the Ashbahians. Those customers “all testified that Katz

executed trades in their accounts without their prior

authorization and that they were, at times, confused or alarmed

to discover that Katz had been trading in their accounts.” SEC

Op. at 30. The Ashbahians and Smith “also noted that, when

they called to complain, Katz would be dismissive, telling them

‘not to worry about it.’” Id. Katz testified that she had the

authority to effect the trades she made, but the NYSE hearing

panel “refused to credit Katz’s testimony,” and the SEC

accepted the NYSE’s credibility determination. Id.

On this appeal, Katz’s only claim is that the NYSE did not

give her notice of which specific trades were allegedly

unauthorized. As the Commission noted, however, “the NYSE

specified that Katz had engaged in unauthorized trades ‘in most

cases’ or ‘regularly,’” at least with respect to the Voskian,

Griffin, and Ashbahian accounts. Id. at 31. Accordingly, it was

reasonable for the Commission to conclude that she “was thus

aware that the NYSE would challenge most of the trades in her

customers’ accounts.” Id. Given the NYSE’s specification, as

well as the fact that “she had a full opportunity to defend against

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this allegation and to cross-examine the witnesses who testified

that Katz had effected transactions in their accounts without

proper authorization,” id., we perceive no error in the

proceedings or findings.

III

For the foregoing reasons, the order of the Commission is

Affirmed.

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